The SEC adopted amendments to the procedural requirements and resubmission thresholds of SEA Rule 14a-8 ("Shareholder proposals"). The rule requires companies to include shareholder proposals in their proxy statements, subject to certain requirements.
As previously covered, the amendments will:
- replace the $2,000 threshold for shareholder-proponent eligibility with a three-tiered threshold (i.e., require continuous ownership of a company's securities of at least (i) $2,000 for three years, (ii) $15,000 for two years or (iii) $25,000 for one year);
- require a shareholder-proponent who uses a representative to provide documentation that affirms the representative is authorized to submit the proposal;
- require every shareholder-proponent to confirm that the shareholder is able to meet (either in person or via teleconference) with the company between 10 and 30 calendar days after the submission of the shareholder proposal;
- amend the one-proposal restriction to "each person" rather than "each shareholder" for each shareholders' meeting; and
- increase the resubmission thresholds for matters voted on in the last five years to 5 percent if previously voted on once, 15 percent if previously voted on twice, and 25 percent if previously voted on three or more times (the current thresholds are 3%, 6% and 10%, respectively).
The amendments go into effect 60 days after their publication in the Federal Register.
Primary Sources
- SEC Press Release: SEC Adopts Amendments to Modernize Shareholder Proposal Rule
- SEC Final Rule: Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8
- SEC Statement, Jay Clayton: Modernizing the Shareholder Proposal Framework for the Benefit of All Shareholders
- SEC Statement, Caroline Crenshaw: Statement on Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8
- SEC Statement, Allison Herren Lee: Statement on the Amendments to Rule 14a-8
- SEC Statement, Hester M. Peirce: Statement at Open Meeting on Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8
- SEC Statement, Elad Roisman: Statement on Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8
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