The SEC has posted its Spring 2022 Reg-Flex agenda and it’s crammed with pending and new rulemakings—and they’re all going to be proposed or adopted in October! (Ok, admittedly, that’s an exaggeration, but not much of one.) Here is the short-term agenda and here is the long-term agenda. According to SEC Chair Gary Gensler, the “U.S. is blessed with the largest, most sophisticated, and most innovative capital markets in the world….But we cannot take that for granted. As SEC alum Robert Birnbaum and his team said decades ago, ‘no regulation can be static in a dynamic society.’ That core idea still rings true today.” Gensler’s public policy goals for the agenda are “continuing to drive efficiency in our capital markets and modernizing our rules for today’s economy and technologies.” As with recent prior agendas, SEC Commissioner Hester Peirce has almost no kind words for the agency’s plans—“flawed goals and a flawed method for achieving them.” In fact, she went so far as to characterize the agenda as “dangerous”: in her view, the agenda represents “the regulatory version of a rip current—fast-moving currents flowing away from shore that can be fatal to swimmers. Just as certain wave and wind conditions can create dangerous rip currents, the pace and character of the rulemakings on this agenda make for dangerous conditions in our capital markets.” There’s no dispute that the agenda is laden with major proposals—human capital, SPACs, board diversity. What’s more, many of these proposals—climate disclosure, cybersecurity, Rule 10b5-1—are apparently at the final rule stage. Whether or not we’ll see a load of public companies submerged by the rip tide of rulemakings remains to be seen, but there’s not much question that implementing them all would certainly be a challenge in any case.
On the Short-Term Agenda:
Final Rule Stage
Mandated Electronic Filings—This item, identified as at the “final rule stage,” has already been adopted. The new amendments require electronic submission of several forms, including glossy annual reports, that could previously be submitted on paper (see this PubCo post).
Listing Standards for Recovery of Erroneously Awarded Compensation— Section 954 of Dodd-Frank required the SEC to direct the national securities exchanges to adopt listing standards requiring each listed company to develop and implement a policy for recouping executive compensation that was paid on the basis of erroneous financial information, the theory being that it is compensation to which the executives were never really entitled in the first place. Under Dodd-Frank, the policy would apply in the event the company had to prepare an accounting restatement due to the company’s material noncompliance with any financial reporting requirement under the securities laws. The rules to implement these clawback provisions were proposed in 2015 and then relegated to the long-term agenda. So much for legislative mandates. With the change in the majority at the Commission, the SEC is now planning to re-propose those rules and, to that end, reopened the public comment period in October 2021. In reopening the comment period, one possible change suggested by the questions was a potential expansion of the concept of “restatement” to include not only “reissuance” or “Big R” restatements (which involve a material error and an 8-K), but also “revision” or “little r” restatements (or some version thereof), which have become increasingly popular. (See this PubCo post and this PubCo post.) But just a couple of weeks ago, the SEC again reopened the comment period to allow further public comment in light of a new, just released DERA staff memorandum containing “additional analysis and data on compensation recovery policies and accounting restatements.” The new DERA memo estimates “that ‘little r’ restatements may account for roughly three times as many restatements as ‘Big R’ restatements in 2021, after excluding restatements by SPACs.” However, DERA also found that “little r” restatements “may be less likely than ‘Big R’ restatements to trigger a potential recovery of compensation. For example, ‘little r’ restatements may be less likely to be associated with a decline in previously reported net income, and on average they are associated with smaller stock price reactions.” Could the potential expansion of the definition of “restatement” now be in question? (See this PubCo post.) The target date identified for final action is 10/22.
Pay Versus Performance—Another oldie but goodie, these rules were also proposed in 2015 to implement Section 953(a) of Dodd-Frank, which required companies to disclose executive pay for performance. The proposal would amend Reg S-K Section 402 to add Section (v), which would require tabular disclosure of compensation “actually paid” to the principal executive officer and an average of the compensation actually paid to the other named executive officers for a phased-in five-year period. The new section would also require companies to describe, in narrative or graphic form or both, the relationship of the compensation actually paid to the company’s financial performance as reflected in its TSR and to describe the relationship of the company’s TSR to the TSR of a peer group. (See this PubCo post.) In January, the SEC reopened the comment period. One of the key questions asked in the reopening release was whether additional performance metrics—not just TSR—would better reflect Congress’s intention in Dodd-Frank. The agenda provides a target date for final action of 10/22.
Rule 10b5-1 and Insider Trading—A number of studies have identified problems with Rule 10b5-1 plans, and concerns have long been expressed that 10b5-1 plans provide a vehicle that allows insiders to opportunistically trade on the basis of material non-public information. In June 2021, Gensler announced plans to address problems with the affirmative defense provisions of Rule 10b5-1. Rule 10b5-1 plans, he said, “have led to real cracks in our insider trading regime” and called for a proposal to “freshen up” these rules. (See this PubCo post.) In December 2021, the SEC issued its proposal. (See this PubCo post.) In addition to enhanced disclosure by companies, the proposed amendments would add several new conditions to the availability of the Rule 10b5-1(c)(1) affirmative defense, including a 120-day cooling-off period for officers and directors after adoption or modification of a plan, a 30-day cooling-off period for companies, certifications by officers and directors that they are adopting the plan in good faith and that they are not aware of MNPI, prohibition on multiple overlapping Rule 10b5-1 trading plans, limitation of only one 10b5-1 plan to execute a single trade in any 12-month period, and a requirement that Rule 10b5-1 trading arrangements be entered into and operated in good faith. The agenda targets 4/23 as the date for final action.
Climate Change Disclosure—After many months of hyperventilating in anticipation of the SEC’s new climate disclosure rule, we finally got a chance to see it in March. The WSJ called it “the biggest potential expansion in corporate disclosure since the creation of the Depression-era rules over financial disclosures that underpin modern corporate statements,” and Fortune said it “could be the biggest change to corporate disclosures in the U.S. in decades.” The proposal was designed to require disclosure of “consistent, comparable, and reliable—and therefore decision-useful—information to investors to enable them to make informed judgments about the impact of climate-related risks on current and potential investments.” The proposal is certainly thoughtful, comprehensive and stunningly detailed—some might say overwhelmingly so. At over 500 pages, the proposal would add an entire new subpart to Reg S-K and a new article to Reg S-X. Based on the Task Force on Climate-Related Financial Disclosures and the Greenhouse Gas Protocol, the proposed new rules would require public companies to disclose information about any material climate-related impacts on strategy, business model, and outlook; governance of climate-related risks; climate-related risk management; greenhouse gas metrics in financial statements; and climate-related targets and goals, if any. The proposal would also mandate disclosure of a company’s Scopes 1 and 2 GHG emissions, and, for larger companies, Scope 3 GHG emissions if material (or included in the company’s emissions reduction target), with a phased-in attestation requirement for Scopes 1 and 2 for large accelerated filers and accelerated filers. The disclosures would be required under a separate caption, “Climate-Related Disclosure,” in registration statements and Exchange Act annual reports (with material updates in Forms 10-Q) Compliance would be phased in, with reporting for large accelerated filers due in 2024 (assuming an—optimistic—effective date at the end of this year). (See this PubCo post, this PubCo post and this PubCo post.) Opponents of the proposal have long been plotting their litigation strategies, and there is really no question that rules will be challenged in court. Among other things, some contend that the proposal is beyond the SEC’s authority. After an extension, the comment period has just concluded. The agenda targets 10/22 as the date for final action. Hmmm.
Cybersecurity Risk Governance—In 2018, the SEC adopted guidance on cybersecurity disclosure. (See this PubCo post.) But not all of the commissioners were entirely satisfied that the guidance was adequate under the circumstances. Given the recent consternation over hacks and ransomware, it should come as no surprise that, in March, the SEC proposed rule amendments to enhance issuer disclosures regarding cybersecurity risk governance. According to Corp Fin Director Renee Jones, the SEC approached the rulemaking from two perspectives: first, incident reporting and second, periodic disclosure regarding cybersecurity risk management, strategy and governance. Under the proposal, companies would be required to disclose material cybersecurity incidents on Form 8-K within four business days after they have determined that they have experienced a material cybersecurity incident. In addition, the proposal would require disclosure in periodic reports of policies and procedures to identify and manage cybersecurity risk, including the impact of cybersecurity risks on strategy; management’s role and expertise in implementing the company’s cybersecurity policies, procedures and strategies; and the board’s oversight role and cybersecurity expertise, if any. (See this PubCo post.) The agenda identifies 4/23 as the target date for final action on the proposal.
Proxy Voting Advice—Whether and how to regulate proxy advisory firms, such as ISS and Glass Lewis, has long been a contentious issue, with some arguing that their vote recommendations are plagued by conflicts of interest and often erroneous, while others see no reason for regulation given that the clients of these firms are satisfied with their services. In July 2020, the SEC adopted new amendments to the proxy rules regarding proxy advisory firms, codifying the SEC’s earlier interpretation that proxy voting advice is subject to the proxy solicitation rules. The intent was not, however, to cause ISS and other proxy voting advice businesses to file a slew of proxy statements. To address the real issue that the SEC was targeting, the 2020 rules added to the exemptions from those solicitation rules two significant new conditions for proxy advisory firms—one requiring disclosure of conflicts of interest and the second calling for proxy advisory firms to engage with the companies that are the subjects of their advice. The proposed 2021 amendments would rescind that second central condition—which some might characterize as a core element, if not the core element, of the 2020 amendments. The proposal would also rescind a note to Rule 14a-9, adopted as part of the 2020 rules, that provided examples of situations in which the failure to disclose certain information in proxy voting advice may be considered misleading. (See this PubCo post.) The agenda identifies 10/22 as the target date for final action on the proposal.
Modernization of Beneficial Ownership Reporting—In February, the SEC proposed to amend the complex beneficial ownership reporting rules. Gensler described the amendments as an update designed to modernize reporting requirements for today’s markets, including reducing “information asymmetries,” and addressing “the timeliness of Schedule 13D and 13G filings.” The proposal would accelerate the filing deadlines for Schedule 13D beneficial ownership reports from 10 days to five days and require amendments to be filed within one business day (as opposed to “promptly”). For Schedules 13G, the filing deadline would be accelerated to five business days after the end of the month for qualified institutional investors and exempt investors, and would allow five days for passive investors to file. The proposal would also expand the application of Reg 13D-G to certain derivative securities and clarify the definition of “group.” (See this PubCo post.) The agenda identifies 4/23 as the target date for final action on the proposal.
Share Repurchase Disclosure Modernization—In December 2021, the SEC proposed new amendments to modernize share repurchase disclosure. The proposal would require daily repurchase disclosure on a new Form SR before the end of the first business day following the day on which the company executes a share repurchase. The proposal would also amend Reg S-K Item 703 to require additional detail regarding a company’s repurchase programs, including disclosure of the company’s objective or rationale for its share repurchases, the process or criteria used to determine the amount of repurchases, any policies and procedures relating to purchases and sales by officers and directors during a repurchase program, and whether the repurchases were made under a Rule 10b5-1 plan or in reliance on Rule 10b-18. (See this PubCo post.) The agenda identifies 10/22 as the target date for final action on the proposal.
Amendments to the Commission’s Whistleblower Program Rules—In September 2020, the SEC adopted changes to the rules governing its whistleblower program, enabling the SEC to adjust, within certain limitations, the amounts payable as awards under the program. The amendments also modified the requirements for anti-retaliation protection to conform to SCOTUS’s recent decision in Digital Realty v. Somers (discussed in this PubCo post). The changes were intended to increase efficiencies and provide more tools and more flexibility to the SEC, but not all the Commissioners saw it that way. One of the amendments “clarified”—a term that, in the view of some of the commissioners, might be doing a lot of work—the SEC’s “broad discretion” when applying the award factors set forth in the whistleblower rules. Commissioner Allison Herren Lee dissented principally because of the treatment in the new rules regarding SEC use of discretion if the dollar amount of an award is too high. (See this PubCo post.) In August last year, Gensler issued a statement indicating that he had directed the SEC staff to revisit the whistleblower rules, in particular, two of the amendments that had been adopted in 2020. (See this PubCo post.) Gensler observed that concerns had been raised, including by whistleblowers as well as by Lee and Commissioner Caroline Crenshaw, that those amendments “could discourage whistleblowers from coming forward.” In February, the SEC proposed two amendments to the whistleblower program relating to “award claims for related actions that would be otherwise covered by an alternative whistleblower program,” and affirming the SEC’s “authority to consider the dollar amount of a potential award for the limited purpose of increasing an award but not to lower an award.” According to Gensler, the “first proposed rule change is designed to ensure that a whistleblower is not disadvantaged by another whistleblower program that would not give them as high an award as the SEC would offer. Under the second proposed rule change, the SEC could consider the dollar amounts of potential awards only to increase the whistleblower’s award.” (See this PubCo post.) The agenda identifies 10/22 as the target date for final action.
Proposed Rule Stage
Corporate Board Diversity—Corp Fin may recommend amendments to the proxy rules to enhance company disclosures about the diversity of board members and nominees. This idea was championed by former SEC Chair Mary Jo White, who announced in 2016 that the Corp Fin staff was preparing a proposal to require “more meaningful” disclosure in proxy statements about board members and nominees where the directors elect to report that information. The current rule, she believed, just did not cut it: “[o]ur lens of board diversity disclosure needs to be re-focused in order to better serve and inform investors.” (See this PubCo post.) The proposal seems to have never materialized—at least not in public. In 2019, the staff issued a CDI calling for some enhanced board diversity disclosure. (See this PubCo post.) But with all the recent focus on diversity and racial equity, this topic was moved up to the short-term agenda last year with a target date for a proposal of 4/22. That obviously didn’t happen. (See this PubCo post for a discussion of a study examining the representation of women and racial/ethnic communities (including Black, Asian/Pacific Islander and Hispanic persons) on public company boards among the Fortune 100 and Fortune 500 companies.) The new target date for the proposal is 4/23.
Disclosure of Payments by Resource Extraction Issuers—In December 2020, the SEC adopted final Rule 13q-1 and an amendment to Form SD to implement Section 1504 of Dodd-Frank, which relates to disclosure of payments by resource extraction issuers. As adopted, the rule requires public reporting companies that engage in the commercial development of oil, natural gas or minerals to disclose company-specific, project-level payments made (by the company, its subs or controlled entities) to a foreign government or the U.S. federal government. You might recall that the resource extraction rules, mandated under Dodd-Frank, have had a long and troubled history. Originally adopted in 2012 at the same time as the conflict minerals rules, the resource extraction rules faced an immediate court challenge and, in a fairly scathing opinion, were vacated by the U.S. District Court. New rules were again adopted, but were subsequently tossed out under the Congressional Review Act. When rules were adopted for the third time in December 2020, Lee dissented because the final rules permitted “payment information to be aggregated to such a degree that the resulting disclosures will obscure information crucial to anti-corruption efforts and material to investment analysis. As a result, today’s rule, by the Commission’s own determination, will severely restrict the transparency and anti-corruption benefits that the disclosures might provide, and thus fails to advance the statute’s goals.” (See this PubCo post.) But is the third time the charm? Apparently not. Given the new majority on the Commission, Corp Fin is considering whether to recommend that the SEC review the rules to determine if additional amendments might be appropriate. The agenda identifies 4/23 as the target date for issuance of a proposal.
Rule 144 Holding Period—In December 2020, the SEC proposed amendments to Rule 144 to revise the method for determining the holding period—essentially eliminating tacking—for securities “acquired upon the conversion or exchange of certain ‘market-adjustable securities.’” The proposed amendments “would not affect the use of Rule 144 for most convertible or variable-rate securities transactions.” Essentially, the amendment was intended to apply to “floating priced” or “floating rate” convertibles, often referred to as “death-spiral” converts, issued by companies that do not have securities listed, or approved for listing, on a national securities exchange. The proposed amendments would have mandated electronic filing of Form 144 notices related to the resale of securities of Exchange Act reporting companies; eliminated the Form 144 filing requirement for non-reporting companies; changed the filing deadline for Form 144 to coincide with the filing deadline for Form 4; and amended Forms 4 and 5 to add a check box to permit filers to indicate that a sale or purchase reported on the form was made pursuant to a transaction that satisfied Rule 10b5-1(c). (See this PubCo post.) In June, the SEC separately adopted amendments mandating electronic submission of a number of forms, including Forms 144, but indicated that it was not taking any action concerning the remaining aspects of the proposal in the Rule 144 proposing release, and, in particular, it was not adopting the proposal to eliminate the Form 144 filing requirement for the sale of securities of companies that are not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. (See this PubCo post.) Now, Corp Fin is considering recommending that the SEC repropose amendments to Rule 144. The agenda provides a target date of 10/22 for a proposal.
Human Capital Management Disclosure—When, in August 2020, the SEC adopted a new requirement to discuss human capital as part of an overhaul of Reg S-K, the debate centered largely on whether the rule should be principles-based or prescriptive. In that instance, notwithstanding a rulemaking petition and clamor from numerous institutional and other investors for transparency regarding workforce composition, health and safety, living wages and other specifics, the “principles-based” team carried the day; the SEC limited the requirement to a “description of the registrant’s human capital resources, including the number of persons employed by the registrant, and any human capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant’s business and workforce, measures or objectives that address the development, attraction and retention of personnel).” (See this PubCo post.) Subsequent reporting has suggested that companies “capitalized on the fact that the new rule does not call for specific metrics,” as “[r]elatively few issuers provided meaningful numbers about their human capital, even when they had those numbers at hand,” such as workforce diversity data submitted to the EEOC. (See this PubCo post.) And just this month, a new rulemaking petition was submitted by a group of academics requesting that the SEC require more qualitative and quantitative disclosure of financial information about human capital. (See this PubCo post.) Corp Fin is now considering recommending a proposal to enhance company disclosures regarding human capital management. The agenda identifies 10/22 as the target date for issuance of a proposal.
Special Purpose Acquisition Companies—In remarks last year before the Healthy Markets Association, SEC Chair Gary Gensler emphasized the need to treat like cases alike, contending that a de-SPAC transaction is functionally “akin to a traditional IPO.” He pointed to the need to level out information asymmetries, guard against misleading information and fraud and mitigate conflicts among parties that may have different incentives. If we are going to treat like cases alike, he said, then “investors deserve the protections they receive from traditional IPOs.” (See this PubCo post.) In March, the SEC proposed new rules and amendments regarding SPACs, shell companies, the use of projections in SEC filings and a rule addressing the status of SPACs under the Investment Company Act of 1940. The proposal would add new Subpart 1600 of Reg S-K setting forth specialized disclosure requirements for SPAC IPOs and de-SPAC transactions. In particular, the proposal would impose additional disclosure requirements regarding SPAC sponsors, conflicts of interest, dilution and financial statements, among other things; standards around marketing practices, such as the use of financial projections; and gatekeeper and issuer obligations, including expanded potential underwriter liability and potential liability by the target company and its signing persons for a de-SPAC registration statement. Under the proposal, the safe harbor for forward-looking statements under the PSLRA would not be available to SPACs. The proposal also includes a new safe harbor from the obligation to register under the Investment Company Act of 1940 for SPACs that meet the safe harbor’s requirements. (See this PubCo post.) The agenda does not identify any target date for further action.
Rule 14a-8 Amendments—In October 2020, the SEC adopted amendments to Rule 14a-8 to modify the eligibility criteria for submission of shareholder proposals, as well as the resubmission thresholds; provide that a person may submit only one proposal per meeting, whether as a shareholder or acting as a representative; prohibit aggregation of holdings for purposes of satisfying the ownership thresholds; facilitate engagement with the proponent; and update other procedural requirements. The rulemaking generated an energetic—some might say heated—discussion among the commissioners in the course of the long meeting, as well as substantial pushback through the public comment process, discussed in more detail in this PubCo post and this PubCo post. Then-SEC Chair Jay Clayton observed that a “system in which five individuals accounted for 78% of all the proposals submitted by individual shareholders” needed some work, and former Commissioner Jackson characterized the proposal as swatting “a gadfly with a sledgehammer.” (See this PubCo post.) With a new majority in place, in November 2021, Corp Fin issued new SLB 14L, which outlined Corp Fin’s most recent interpretations of the ordinary business and the economic relevance exceptions under Rule 14a-8, and rescinded three earlier SLBs—SLBs 14I, 14J and 14K. Generally, new SLB 14L presented its approach as a return to the perspective that historically prevailed prior to the issuance of the three rescinded SLBs. (See this PubCo post.) The effect of SLB 14L was to make exclusion of shareholder proposals—particularly proposals related to environmental and social issues—more of a challenge for companies, smoothing the glide path for inclusion of proposals submitted by climate and other activists. Now, the agenda indicates, the SEC may propose new amendments regarding shareholder proposals under Rule 14a-8. Although the substance of the potential amendments is unclear, this article in Law 360 quotes Jones as advising a conference that Corp Fin is “considering ways to add clarity and to reduce ambiguity surrounding the application of certain provisions in the rule….Thus, we are considering recommending amendments that would make the process more efficient and more predictable for all parties involved.” The agenda identifies 10/22 as the target date for issuance of a proposal.
Reg D and Form D Improvements—Corp Fin is considering recommending that the SEC propose amendments to Reg D, including updates to the accredited investor definition, and to Form D. The target date for a proposal is 10/22.
Revisions to the Definition of Securities Held of Record—Corp Fin is considering recommending that the SEC propose amendments to the definition of “held of record” for purposes of section 12(g) of the Exchange Act. Lee has previously raised concerns about the “explosive growth of private markets.” Currently, under the Exchange Act, a company that reaches either 2,000 holders of record or 500 holders of record that are not accredited investors, whichever first occurs, is required to register under the Exchange Act. (And persons are also excluded from the definition of “held of record” if they hold only securities issued to them pursuant to an employee compensation plan in transactions exempted from the registration requirements of the Securities Act.) Today, Lee points out, most shares in U.S. markets are held in street name, with the result that “record ownership has plummeted and in most cases has no meaningful relationship to the number of actual investors.” According to Lee, “[e]ven some of the largest and most widely traded issuers do not have enough record owners (as that term is currently defined) to meet the requirements of Section 12(g). Under current guidance, in counting holders, companies look through record ownership only to banks and brokers, not to beneficial owners. Should that still be the case? Lee advocates that “we should consider whether to recalibrate the way issuers must count shareholders of record under Section 12(g) (and Rule 12g5-1) in order to hew more closely to the intent of Congress and the Commission in requiring issuers to count shareholders to begin with. In other words, it’s time for us to reassess what it means to be a holder of record under Section 12(g).” (See this PubCo post.) The target date for a proposal is 10/22.
On the long-term (maybe never) agenda:
Conflict Minerals Amendments—Way too long a saga to go through here. But know that the federal courts held that the statute and rules violated the First Amendment to the extent they required companies to report that any of their products “have not been found to be ‘DRC conflict free.’” (For background on the case, see this PubCo post.) Corp Fin guidance issued in 2014, and currently in effect, requires companies to make the mandated filing without including a statement as to the conflict-free status of the products that could be deemed to violate the First Amendment. (See this PubCo post.) In 2017, Corp Fin issued an Updated Statement on the Effect of the Court of Appeals Decision on the Conflict Minerals Rule that provided that Corp Fin would not recommend that companies face enforcement if they filed only a Form SD and did not prepare and file a conflict minerals report. (See this PubCo post.) Nevertheless, for a variety of reasons, companies have continued to file CMRs at about the same rate as prior to the Updated Statement. As a long-term item, Corp Fin is considering recommending rules that would address the effect of the court decision and recommendations for the SEC to update the Conflict Minerals rules. Note that, as indicated in this release, the conflict minerals rules are among the list of rules identified for review by the SEC under the Regulatory Flexibility Act. Will that make a difference?
Proxy Process Amendments—Corp Fin may recommend that the SEC propose amendments to the proxy rules to facilitate improvements in the proxy system with respect to the distribution of proxy materials, pre-voting reconcilement, processing of shareholder votes (including proxy vote confirmation) and shareholder communications, otherwise referred to as proxy plumbing issues. There has been substantial criticism of the current byzantine system of share ownership and intermediaries that has accreted over time. Shareholder voting is viewed as fundamental to keeping boards and managements accountable, and the current system of proxy plumbing has been criticized as inefficient, opaque and, all too often, inaccurate. Proxy plumbing was discussed at length at a 2018 meeting of the Investor Advisory Committee and then at the proxy process roundtable. (See this PubCo post and this PubCo post.) In this Bloomberg article, Gensler is quoted at a Society for Corporate Governance conference this week as advising companies that are “unhappy with the shareholder voting mechanics” to “suggest fixes to the SEC.” The SEC apparently hasn’t finished proposals related to proxy plumbing and “would benefit from hearing from companies about how to improve proxy plumbing, even if the agency isn’t ready to propose changes.” According to the article, Gensler urged companies not to “wait for the proposal,” but rather to “engage.” Whenever the SEC does get around to a proxy plumbing proposal, the question is whether it will undertake the comprehensive analysis and overhaul that appears to be required or settle for grabbing only the low-hanging fruit? My bet is on the low-hanging fruit—if anything. Next action “undetermined.”