Corporate Governance Shareholder Rights & Activism

Question 1

What is 'say on pay' as established by the Dodd-Frank Act?

Accepted Answer

A mandatory shareholder vote to approve executive compensation packages

Answer

A rule allowing employees to set CEO salaries

Answer

A disclosure requirement for all employee wages

Answer

An SEC rule capping executive bonuses

Question 2

What is proxy access in corporate governance?

Accepted Answer

A shareholder's right to include director nominees in the company's proxy materials

Answer

Management's right to cast votes on behalf of retail shareholders

Answer

The SEC's authority to override shareholder votes

Answer

An institutional investor's right to attend all board meetings

Question 3

Which type of shareholder resolution is binding on the board if approved?

Accepted Answer

Bylaw amendment

Answer

Precatory resolution

Answer

Advisory resolution

Answer

Mandatory resolution

Question 4

What is an 'activist investor' in corporate governance?

Accepted Answer

A shareholder who acquires a significant stake and advocates for governance or strategic changes

Answer

An investor who files quarterly 13-F reports with the SEC

Answer

A pension fund that votes against all management proposals

Answer

An institutional investor that supports all ESG initiatives

Question 5

Under SEC Rule 13D, a shareholder must file a Schedule 13D within how many days of acquiring beneficial ownership exceeding 5%?

Accepted Answer

10 calendar days

Answer

5 calendar days

Answer

20 business days

Answer

30 calendar days

Question 6

What is a 'no-action letter' in the context of shareholder proposals?

Accepted Answer

A letter from the SEC confirming it will not take enforcement action if a company omits a shareholder proposal from its proxy

Answer

A letter from the board rejecting an activist investor's demands

Answer

A notice from proxy advisors recommending abstention

Answer

A consent solicitation waiving a shareholder vote