HSE Securities and Capital Markets Newsletter | Winter 2024


Editor’s Message

Happy New Year and 2024 everyone!  I hope you all enjoyed the holiday season with your friends and family. 2023 was a year of uncertain and mixed results.  There were brief windows during 2023 when the capital markets were active but overall, 2023 was a challenging year to raise capital, particularly for small- and micro-cap public companies.  With interest rates posed to fall during 2024 and the threat of a recession diminished, 2024 may be a better year for companies seeking to raise capital. Elsewhere, the SEC remains active in adopting new rules and aggressively bringing enforcement actions.  This is not expected to change in 2024, so companies should be prepared and monitor changes in SEC rules.

As public companies prepare for the 2024 proxy season, below are a few pointers to consider this proxy season:

  • Check the details of your equity incentive plans.  Many plans have limits on the size of awards to directors or executive officers.  Confirm before you file your proxy statement that your company complied with any limitations under the stockholder approved equity incentive plan during the year.  There has been a rise in plaintiff firms bringing claims alleging companies have not complied with the terms of stockholder approved equity incentive plans.
  • Know your voting standards.  Know the stockholder approval requirements for each proposal in your proxy statement.  There has been a rise in plaintiff firms bringing claims that the vote standards in a company’s proxy statement are inaccurate.  Make sure to the check your bylaws, certificate of incorporation and, if necessary, the corporate law of your state of incorporation to ensure the disclosure in the proxy statement of your vote standards is accurate.
  • Review Delaware law for charter amendments. If you are amending your certificate of incorporation, be aware of how recent changes in Delaware law may impact the vote standard required to approve an amendment to your certificate of incorporation.  In some instances, the vote standard is now lower.
    Mind your stockholder meeting quorum. Many micro-cap companies have had challenges obtaining a quorum for their annual meeting of stockholders, particularly if the company does not have a large percentage of institutional investors.  Micro-cap companies should check the law of their state of incorporation to see if it permits reducing the quorum requirement to as low as one-third.  
  • Consider what your stockholders expect from the annual meeting.  With many companies increasing their communications to stockholders throughout the year, many stockholders do not find value in the annual meeting of stockholders unless there are significant non-routine items on the agenda.  If you have historically had in person stockholder meetings with a lot of bells and whistles, consider switching to a virtual meeting.  In many instances, the company could switch to a virtual meeting and most stockholders would understand the change.

In conclusion, I recommend reading the “Preparing for 2024 Proxy and Annual Reporting Season” article below that details changes in law that will impact your proxy season this year.  The time to understand upcoming changes to the Form 10-K and proxy statement disclosures is now and I urge all fiscal-year end companies to carefully review the article.

I hope you enjoy our Winter newsletter and stay warm this winter.

Alex McClean
Practice Group Leader
Securities and Capital Markets Group

Legal Insights

We regularly provide insight on a range of important securities and regulatory developments through our LEGALcurrents. Below are links to some of our recent articles and some additional content that may be of interest:

GWBush2NobleCon19 | Boca Raton, FL | December 3-5

HSE was proud to sponsor Noble Capital Markets’ 19th Annual Emerging Growth Equity Conference at Florida Atlantic University. NobleCon is considered to be the preeminent showcase of emerging growth companies. Alex McClean and Maggie Rhoda represented HSE and enjoyed networking with investors and company representatives.

In The News

Murillo_Chris_10-2022_Roc_WebReadyC. Christopher Murillo Named Partner-in-Charge of NYC Office

Recently, Chris Murillo was appointed as Partner-in-Charge of HSE’s New York City Office. The Firm’s NYC office was opened in 2014 to accommodate the needs of our NYC-based clients and HSE attorneys who are regularly there meeting with and hosting clients.



The Team in Actionugly sweater

In preparation for “National Ugly Christmas Sweater Day”, the team got together to hone in on their artistic talents.  Let’s just say it’s a work in progress and no one has plans to quit their day jobs!

Executive Compensation

Checklist 200x1502023 Employee Benefits Year in Review—Planning Ahead for 2024

It’s a good time for employers and benefit plan fiduciaries to take stock of their ongoing employee benefits compliance obligations and applicable changes in laws and regulations. It’s also important to make sure benefit plan deadlines didn’t get overlooked in the rush of year-end projects and holiday commitments. Click here to read the Employee Benefits and Executive Compensation group’s annual Year-End Newsletter and Checklist for information about important dates and new developments.

HSE Views

Bahl_SiddharthLast month, Sid Bahl had the opportunity to attend the American Bar Association’s Federal Regulation of Securities Committee in Washington, D.C.. Sid was in good company— including SEC Chair Gary Gensler.

Click here to read an article in which Sid outlines his key takeaways from the Winter Meeting.

Attorney Advertising. Prior results do not guarantee a similar outcome. This publication is provided as a service to clients and friends of Harter Secrest & Emery LLP. It is intended for general information purposes only and should not be considered as legal advice. The contents are neither an exhaustive discussion nor do they purport to cover all developments in the area. The reader should consult with legal counsel to determine how applicable laws relate to specific situations. ©2024 Harter Secrest & Emery LLP