COVID-19 Annual Meeting and SEC Disclosure Checklist and Best Practices Reference Guide
The situation for corporate and securities lawyers has evolved rapidly in just the past few weeks. For most of corporate America, the realization that the COVID-19 pandemic would impact proxy season did not come until the season was in full swing. As compensation committees met in February, there were no inklings of an impending economic collapse that would make the stock option strike prices and performance goals they were approving completely meaningless. As proxy statements went to print in early March, few realized that within the next two weeks, all companies would be scrambling to see what their alternatives were to holding their annual meetings in person as most had since inception.
During this time, corporate governance and securities experts and practitioners, including many of you, have received questions about changes being contemplated to annual shareholders meetings and SEC disclosures specifically related to COVID-19. In response, Proxy Analytics LLC and Soundboard Governance have published a COVID-19 Annual Meeting and SEC Disclosure Checklist and Best Practices Reference Guide to (1) walk companies through key decision points, logistical concerns, and shareholder communications for 2020 annual meetings, and (2) provide guidance for SEC disclosures companies may wish to consider.
We designed the Reference Guide to work both as an annual meeting and SEC disclosure checklist and a content guide. The document is divided into sections based on the questions we have most frequently been asked and types of disclosures related to COVID-19 that we have seen in recent proxy filings. The first section of report relates to logistical considerations for annual meetings, including options for disclosure depending on the format of the meeting (in-person, virtual-only, hybrid), and how best to incorporate COVID-19 into proxy materials. Thereafter, we provide commentary on what we believe are emerging best practices around COVID-19 and how disclosures may be best incorporated into other sections of the proxy statement.
As fellow professionals, we know that the situation is stressful and fluid, many demands are being made of you, both at work and on the home front, and the unknowns are infinite. As former practitioners, we know that no matter what the crisis around you may be, your annual meetings are not optional and your SEC disclosures must be carefully considered. This year, all of us are facing a situation for which there are no precedents. Our directors, executives and clients are relying on us to get it done, even if it means we have to be creative, but still get it done right. We hope our Reference Guidewill serve as a useful resource as you carry out your duties in the face of these challenges.
There are many other important COVID-19-related disclosure considerations for SEC filings under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Our Reference Guide mainly addresses practices and disclosures that relate to shareholders meetings and related proxy materials. For guidance on types of SEC disclosures not addressed in this document, we encourage you to review guidance from the SEC and the Division of Corporation Finance, as well as the many other excellent resources that are being provided by law firms, industry organizations, and other service providers.
We hope to update our Reference Guide as proxy season progresses and we see new developments in annual meeting practices and SEC disclosures related to the COVID-19 pandemic.