By Joseph White
(Reuters) - General Motors Co (NYSE:GM) disclosed Tuesday that shareholders or shareholder groups will be allowed to nominate directors for the board in the company's annual proxy statement, but they will need to hold at least 3 percent of the automakers' shares for at least three years.
GM's new proxy access rules, which it disclosed in an SEC filing, are similar to those adopted at a growing list of large U.S. companies, including Time Warner Inc (N:TWX), Microsoft Corp (O:MSFT) and General Electric Co (N:GE).
The ownership requirements, had they been in place in February 2015, would have been a barrier to proxy access for a group of hedge funds that pushed GM to put former U.S. auto task force member Harry Wilson on the company's board and accelerate returns of cash to shareholders. That group held about 1.9 percent of GM shares at the time.
Some corporate governance watchdogs, such as the Council of Institutional Investors, have advocated giving long-term shareholder groups the ability to offer director nominees in the company's proxy statement, bypassing the expense of soliciting votes for nominees on their own. The Securities and Exchange Commission proposed proxy access rules several years ago, but those were challenged by business groups and blocked by a U.S. appeals court.
The new GM rules state that shareholder groups that meet the share ownership standard may nominate "up to two individuals, or 20 percent of the board, whichever is greater."
GM directors adopted the new procedure on March 4 as a new article to the company's bylaws, the company stated in a filing with the Securities and Exchange Commission that was released Tuesday evening.
GM did not have an immediate comment elaborating on the new rules.