The SEC has voted to allow shareholders more power to elect corporate board members.

The SEC’s rule would allow shareholders who own 3 percent of a company’s voting stock to nominate board members. To prevent short-term investors from swooping in to shake up a company, shareholders must own their stock for three years before proposing candidates. Shareholders must own their stock outright and cannot use borrowed shares to count toward the 3 percent threshold.

This is amazing the SEC vote was 3-2, considering who owns 3% of one company stock? There is a nonbinding vote on executive pay:

Also under the new law, shareholders will be able to weigh in on pay packages for top executives. Nonbinding votes on executive pay will be held at least once every three years.

The Wall Street Journal:

The "proxy access" rule, which passed the commission on a 3-2 vote, would require companies to print the names of shareholder board nominees directly on corporate ballots if certain conditions are met.

Currently, shareholders who want to oust board members must foot the bill for mailing separate ballots, a hurdle that is too costly and time-consuming for most. Smaller companies will be exempt from complying with the rule for three years. Qualified shareholders will be able to submit their first proxy access candidates during the 2011 annual meeting season.