Back in March 2020, before we could even imagine that we would still be struggling with COVID-19 in 2022, the SEC announced Corp Fin staff guidance regarding annual meetings. Because of limitations on the ability to hold in-person annual meetings as a result of health and travel concerns, the staff guidance provided “regulatory flexibility to companies seeking to change the date and location of the meetings and use new technologies, such as ‘virtual’ shareholder meetings that avoid the need for in-person shareholder attendance, while at the same time ensuring that shareholders and other market participants are informed of any changes.” (See this PubCo post.) That guidance was then updated in April 2020 and April 2021. (See this PubCo post and this PubCo post.) Now, the Corp Fin staff has once again updated that guidance for this year, tweaking the advice related to presentation of shareholder proposals to extend its application to the 2022 proxy season.
Under Rule 14a-8(h), shareholder proponents, or their representatives, are required to appear at the meeting to present their proposals. The new guidance provides that,
“[i]n light of the possible difficulties for shareholder proponents to attend annual meetings in person to present their proposals, the staff encourages issuers, to the extent feasible under state law, to provide shareholder proponents or their representatives with the ability to present their proposals through alternative means, such as by phone, during the 2020, 2021, and 2022 proxy seasons.
“Furthermore, to the extent a shareholder proponent or representative is not able to attend the annual meeting and present the proposal due to the inability to travel or other hardships related to COVID-19, the staff would consider this to be “good cause” under Rule 14a-8(h) should issuers assert Rule 14a-8(h)(3) as a basis to exclude a proposal submitted by the shareholder proponent for any meetings held in the following two calendar years.”
