Impact of Shareholder Proposal on Executive Compensation Rights

Acme Corp. is a publicly traded company that has recently experienced a series of governance challenges, including allegations of management misrepresentation and failure to act in the best interest of shareholders. In light of these issues, a group of shareholders is considering implementing a shareholder proposal aimed at increasing transparency and accountability in the executive compensation practices of the company.

The proposal specifically calls for the company to: (1) disclose the specific metrics used to determine executive bonuses, (2) establish a cap on executive pay in proportion to median employee wages, and (3) allow shareholders a direct vote on the compensation policy during annual meetings. Given these circumstances, which of the following outcomes regarding shareholder rights is most likely if the proposal is approved?