On June 5, 2012, shareholders of Nabors Industries Ltd. approved a proxy access proposal, marking the first time a proposal of this type has passed.

The Nabors proposal, which is non-binding, requests the board to adopt a proxy access by-law. This by-law provision would allow shareholders owning at least 3% of Nabors stock for at least three years to nominate competing candidates for up to a quarter of the board's seats for inclusion on the company's proxy card. This proposal includes the same ownership threshold and holding period that was in the SEC proxy access rule struck down by the US Court of Appeals for the District of Columbia in July, 2011 (see Legal Update, DC Circuit Strikes Down SEC Proxy Access Rule 14a-11). The proposal was submitted by several large New York City pension funds and co-sponsored by a group of pension funds from other states.

For more information on shareholder proposals, see Practice Note, How to Handle Shareholder Proposals and Rule 14a-8 Shareholder Proposal Process Flowchart.