FAQs

What is the Universal Proxy Card (UPC)?

UPC unifies the ballot, or proxy card, that companies and activist investors use in board of director elections. Essentially, companies and activist investors will each include identical content about director candidates in proxy cards. Previously, companies and activist investors produced individual ballots, so the company ballot listed only company candidates, and the activist ballot listed only activist investor candidates.

Who must use UPC?

All US public companies of any size must use a UPC when an activist investor nominates one or more competing board of director candidates. It does not apply to board of director elections at investment companies such as mutual funds.

When does it begin?

Companies must use a UPC for any contested board of directors election at a shareholder meeting (regular or special) that occurs beginning September 1, 2022.

Why does the SEC require the UPC?

Currently, voting for directors by proxy does not easily provide for the same rights and opportunities as voting in person at a shareholder meeting. A shareholder that votes by proxy can easily vote for either the activist investor or company candidates. A shareholder that wishes to vote for candidates from both slates cannot do so easily. The SEC seeks to make the two as equivalent as possible. The new UPC rule essentially achieves this.

What does it cost to use UPC?

The SEC estimates an activist investor can undertake a proxy contest for as little as $5,000-10,000 using UPC. Depending on how, how much, and how well an activist investor wishes to reach other shareholders, it might spend more on proxy solicitation and public relations efforts.