U.S. District Courts in New York and Boston have rejected attempts by Omnicom to block requests that stockholder voting totals be kept confidential until the annual meeting.
OMC, headed by John Wren and Randall Weisenburger, who had combined pay packages totaling $84.5 million in 2012, had bypassed a free SEC process to sue stockholder John Chevedden in four federal courts in an effort to retain exclusive access to stockholder voting in advance of the annual meeting.
Chevedden had claimed that the OMC lawsuits exerted “a chilling effect” on stockholder democracy.
Judge Louis Stanton of U.S. District Court for the Southern District of New York yesterday denied OMC’s motion for summary judgment on the matter and granted Chevedden’s motion to dismiss.
He noted that Chevedden had promised not to sue OMC if the SEC upheld OMC’s request for exclusive access to voting by stockholders in advance of the meeting.
“The threat of injury from corporate misjudgment is too remote and speculative to present a justiciable controversy under Article III of the U.S. Constitution,” he wrote.
Chevedden Also Wins in Boston
Judge Mark Wolf of U.S. District Court in Boston yesterday dismissed OMC suits vs. Chevedden and James Ritchie, a small stockholder who also sought a measure in favor of confidential voting (i.e., not letting management have an exclusive view on how stockholder votes are going).
EMC Corp. had lodged suits similar to those of OMC.
Chevedden told Reuters yesterday that the rulings were “overwhelmingly positive.” With the suits, companies are dodging precedents giving shareholders their say, he added.
Reuters was unable to obtain a comment from OMC.
The O’Dwyer Co. has also sought unsuccessfully to obtain a comment from OMC’s spokesperson Joanne Trout.
Dave Farmer, spokesperson for EMC, told Reuters that Wolf’s decision “did not reach the issue of whether the proposal satisfies SEC rules” and that EMC “is exploring all its options.
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