Whole Foods proxy ruling draws flak

New York

EXECUTIVES at most companies, of course, generally oppose the idea of shareholders nominating their own directors. But now the US Securities and Exchange Commission, generally seen as the defender of shareholder interests, is siding with companies keen to keep investors out of the nomination process.

The skirmish unfolding at Whole Foods Market highlights an issue that is likely to play a prominent role in the 2015 proxy season. After the SEC ruled in favour of the company last month, allowing it to exclude from its proxy a shareholder proposal on director nominations, 10 other companies followed suit, asking the commission to rule the same way for them.

Currently, investors can withhold their support only for directors they consider objectionable; they can rarely n…