The 2010 annual meeting season is shaping up to be an active onefor shareholder proxy measures, particularly those dealing withexecutive compensation issues. But if Congress and the Securitiesand Exchange Commission act on pending measures that make it easierfor competing candidates to run for director and give shareholdersmore say over compensation, this year could end up looking like thecalm before the storm.

“I doubt that Congress or the SEC would change the rules in themiddle of this meeting year,” says Patrick McGurn, general counselat RiskMetrics Group, which monitors shareholder actions. “But bothreforms look to be on track for 2011.”

Meanwhile, McGurn predicts that there will be some “eye-poppingdisclosures” of executive bonuses issued last year, and says thesewill fuel more push-back measures on compensation by shareholdersthis year and next.

So far, RiskMetrics has tallied 29 proxy proposals that wouldgive shareholders an advisory vote on compensation, three measuresto establish anti-gross-up policies, nine requiring compensationcommittee independence and seven that would establish a retentionperiod before the awarding of any executive stock bonuses.RiskMetrics also reports that 25 pending measures requireindependent board chairs and 27 to establish the right to call aspecial shareholders' meeting.

The big changes in the proxy landscape from last year, saysMcGurn, are measures to allow the calling of special meetings andto require more diversity on boards of directors (currently 11proposals). New this year are proxy measures that would bar CEOsfrom sitting on compensation committees.

“So-called 'say-on-pay' measures are passing pretty frequently,”says Stephen Bainbridge, a law professor at the University ofCalifornia at Los Angeles who researches shareholder activism. Onereason, he says, is that large institutional investors, includinglabor union and public employee pension funds, are taking a moreactivist stance on governance issues.

Bainbridge predicts that as early as next year, these groupscould begin focusing on another area: demanding shareholder sayover corporate political contributions. In January, the U.S.Supreme Court overturned 60 years of precedent and restrictionsimposed by the McCain-Feingold campaign finance law, and declaredthat corporations (and labor unions) have a First Amendment rightto spend unlimited amounts of money on political campaigns.

“I suspect that many of the large institutional investors couldstart demanding that they have a say over how that money is spent,”says Bainbridge, adding that such measures are not likely to showup until next year.