Qualcomm requires Three-Year stake holding before nominating for proxy
Qualcomm Inc. altered its proxy process requiring shareholders to have their stake in the company for at least three years before nominating people for the board.
According to Bloomberg News, this move aims to make it more difficult for short-term investors to influence the chipmaker's management and business strategies.
Under the new rule, the 20 shareholders must have at least 3 percent stake in the company and has held its shares for at least three straight years to nominate candidates for the board. These shareholders can chose as many as one-fifth of Qualcomm's board slots.
Qualcomm has faced a series of challenges lately.Forbes reported that the European Commission filed antitrust charges against the giant CMDA technology developer this week for pricing issues in the region.
This comes after the company has been slapped with the same allegation in South Korea in the previous month. The company's licensing practices in Taiwan is being investigated by the Taiwan Fair Trade Commission. The company is also facing similar charges in China and the United States.
In a report by Market Realist, the latest antitrust charges from Europe has caused the company's shares to drop by 5.6 percent to close at $49.48 Tuesday. EU charged Qualcomm for predatory pricing and exclusive payments. The commission gave the company only until April 2016 to respond.
Meanwhile, despite the 36 percent drop of the company's stock in 2015, the company has attracted a lot of activist investors. In July Jana Partners LLC, an activist investor, inked an agreement with the mobile chips maker to not create a proxy fight until 2017. In return Jana Partners will revamp the board and company strategies.
The latest changes in Qualcomm's proxy rules can prevent any further problems that activist investors may bring to the company. The new proxy rules will start taking effect on the 2017 annual meeting of Qualcomm.