Since 1932, the Gilberts have submitted shareholder resolutions on topics like executive compensation and the location of the annual meeting. Before the Gilberts became involved, companies did not have to put shareholder proposals to a shareholder vote. Management did not even have to allow shareholders to speak at the annual meeting. It was corporate gadflies who made the whole system possible. The proposals must be put to a shareholder vote.
Shareholders can even speak at the annual meetings.
Even a majority vote is not binding. The SEC frequently requires shareholders to redraft proposals to make them explicitly precatory, if it has not been made sufficiently clear in their original form. The SEC has permitted shareholder proposals on issues like the company's dealings with South Africa or loans to Chile or SDI, but not proposals to assess a percentage of a company's criminal fine among the responsible executives, to establish an ethics committee of the board chaired by an outside director and to establish a board committee to develop and promulgate a code of corporate conduct, to permit shareholders with substantial holdings to use the proxy statement to present one or more nominees for election to the board and to disclose of negative votes by directors on matters considered by the board. Until very recently, it has not permitted resolutions on executive compensation. Its recent reversal opens up one of the most significant new subjects in corporate governance since the shareholder proposal rules were first promulgated.