Supernus Pharmaceuticals, Inc. | Majority vote support at Supernus Pharmaceuticals, Inc.

Status
Omitted
AGM date
Resolution details
Company ticker
SUPN
Lead filer
The North Atlantic States Carpenters Pension Fund
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company HQ country
United States
Resolved clause
The shareholders of Supernus (the “Company”) request that the Board adopt a new Director Election Resignation Guideline (“Resignation Guideline” or “Guideline”) provision to address those situations when one or more incumbent Board nominees fail to receive the required majority vote for re-election. The Resignation Guideline shall provide that each director upon joining the Board tender an irrevocable conditional resignation conditioned on the director’s failure to receive the required majority vote support in an uncontested election. The Guideline shall provide that an unelected director’s tendered resignation will be effective no later than ninety days following the certification of the election vote and he or she will leave the board within that time period.
Supporting statement
Delaware corporate law states that each director shall hold office until such director’s successor is elected and qualified or until such director’s earlier resignation or removal. An incumbent director who fails to receive the required vote for election continues to serve as “holdover” director. Delaware corporate law was amended in 2006 to provide for director resignations conditioned on an incumbent director’s failure to be re-elected under the majority vote standard that was broadly adopted in the market. The law provided that the resignation could be conditional and irrevocable and was designed to effectuate the majority vote election standard as incumbent directors in uncontested director elections could now be unelected but continue to serve. The Company has in place a director resignation policy that requires incumbent directors to tender a resignation following their failure to be re-elected in an annual election. Rather than providing for the resignation to be effective on a date certain following the vote certification, the policy sets a process and timeline for the Board’s Governance and Nominating Committee to recommend to the Board whether to accept or reject the tendered resignation. This process affords the Board the opportunity to override the shareholder vote. The proposed Resignation Guideline would establish a straightforward process for effectuating the election outcome determined by shareholders. Shareholder voting rights to elect the corporate board of directors established under Delaware corporate law are foundational rights in the governance of corporations. The majority vote director election standard adopted by the Company gives shareholders voting rights that have legal effect. It is important that corporate director resignation guidelines and bylaws not undermine shareholder voting rights. The proposed Resignation Guideline strikes a lawful balance between board discretion and shareholder legal voting rights and establishes shareholder voting in director elections as a more consequential governance right.

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