Capital One Financial has allowed shareholders to nominate candidates to the company's board of directors, joining a spate of large U.S. companies moving to open access to proxy ballots.
The $311 billion-asset company in McLean, Va., will allow shareholders who own at least 3% of its outstanding common stock to nominate up to two individuals as directors, pending additional requirements. A maximum of 20 stockholders will be able to nominate candidates.
Capital One notified investors of the move in a Tuesday regulatory filing. Capital One said it approved the changes after members of its senior management team met with stockholders. It didn't identify the shareholders. Capital One spokeswoman Julie Rakes declined to comment.
Capital One and Bank of America are two U.S. banks that have adopted a so-called proxy-access measure. Additionally, Citigroup and the $20 billion-asset TCF Financial in Wayzata, Minn., have both held shareholder votes on proxy access.
In the face of shareholder pressure, several companies in recent months have made similar moves, including General Electric, Microsoft and Chevron. More than 80 proxy-access measures came to a vote between Jan. 1 and June 30 this year, according to Broadridge Financial Solutions and PricewaterhouseCoopers.
Some large institutional investors, including New York City Comptroller Scott Stringer, have supported the trend for proxy access. Many bank executives, however, oppose it.
"I am completely opposed to it," Ron Paul, chairman and chief executive of the $5.8 billion-asset EagleBank in Bethesda, Md., said in November. "Shareholders, if they don't like the way [a bank] is being run, they can sell their stock."
It's probably a good idea to communicate with shareholders about the issue, said Charles Elson, an expert in corporate governance at the University of Delaware in Newark.
"A lot of institutional shareholders have made it a goal this year to make proxy access adopted in companies throughout the United States," Elson said. "It's better at this point to reach out to your shareholders … before the shareholders create a plan for you."