Tag Archives: proxy access

SEC continues to grant no-action relief in connection with proxy access fix-it proposals

by Cydney Posner

The SEC has posted a number of additional Corp Fin responses to requests for no-action, as well as to requests for reconsideration of previous denials of relief, regarding shareholder proposals to amend proxy access bylaws, so-called “fix-it” proposals. In all cases, the companies argued that they should be permitted to exclude the fix-it proposals as “substantially implemented” under Rule 14a-8(i)(10). The requests were successful in obtaining no-action relief in all cases except one. As in the past, the staff has not identified the key determining factor, but companies now seem to have found a formula for successfully excluding these proposals. Continue reading

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Another theory on Corp Fin’s position on proxy access fix-it proposals

by Cydney Posner

Corp Fin has refined its position with regard to exclusion of proposals to amend existing proxy access bylaws.  However, the basis for the staff’s determination to grant or refuse no-action relief in that context remains a conundrum.
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Corp Fin refines its position on proxy access fix-it proposals (updated)

by Cydney Posner

Corp Fin has refined its position with regard to exclusion of proposals to amend existing proxy access bylaws.  As you may recall, the line drawn so far by Corp Fin has been that, where the shareholder proposal related to initial adoption of proxy access, Corp Fin has continued to grant no-action relief and permit exclusion of proxy access proposals as “substantially implemented” under Rule 14a-8(i)(10), so long as the bylaw provisions adopted by the companies contained the same eligibility percentage and duration of ownership thresholds (3%/3 years) as in the proposal, even though the bylaws also included  a number of “procedural limitations or restrictions that were inconsistent with or not contemplated by the proposals.”  However, with regard to shareholder proposals to amend a company’s existing proxy access bylaw — so-called “fix-it” proposals — the staff had refused to grant no-action relief on that same basis. Meanwhile, both proponents and companies have been exploring the contours of those staff positions, trying to determine how best to advance their opposing arguments. (See this PubCo postthis PubCo post and this PubCo post.) In a series of no-action letters recently posted, Corp Fin has permitted exclusion of some fix-it proposals under Rule 14a-8(a)(i)(10) on the basis that the proposals have been “substantially implemented,” but denied relief for others. Although the staff’s rationale is far from exquisitely clear, nevertheless, companies seeking to exclude fix-it proposals at least now have some successful models on which to base their requests. (For another theory, see this PubCo post.) Continue reading

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Update on proxy access proposals

by Cydney Posner

What’s the latest on proxy access proposals?  As you may recall, the line drawn so far by Corp Fin has been that, where the shareholder proposal related to initial adoption of proxy access, Corp Fin has continued to grant no-action relief and permit exclusion of proxy access proposals as “substantially implemented” under Rule 14a-8(i)(10), so long as the bylaw provisions adopted by the companies contained the same eligibility percentage and duration of ownership thresholds (3%/3 years) as in the proposal, even though the bylaws also included  a number of “procedural limitations or restrictions that were inconsistent with or not contemplated by the proposals.”  However, with regard to shareholder proposals to amend a company’s existing proxy access bylaw — so-called “fix-it” proposals — the staff has refused to grant no-action relief on that same basis. Meanwhile, both proponents and companies have been exploring the contours of those staff positions, trying to determine how best to advance their opposing arguments. (See this PubCo post and this PubCo post.)  Continue reading

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Environmental shareholder proposals increase in frequency and sophistication, but will they continue to be viable?

by Cydney Posner

In this article, the WSJ discusses the increased frequency and sophistication of shareholder proposals regarding the environment. In particular, the piece observes that shareholder proposals focusing on environmental issues have evolved “from requests for greenhouse gas emissions cuts to demands for disclosure of strategies to manage climate risks and for linking executive pay with sustainability performance.” But, with the imminent change to a new administration at the federal level, will these sustainability proposals continue to be viable?  Continue reading

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Will we see more activists using proxy access?

by Cydney Posner

You might recall that, on November 9, 2016, GAMCO Asset Management Inc. (an entity affiliated with activist investor Mario Gabelli) and certain affiliates used the proxy access bylaws recently adopted at National Fuel Gas Company, an NYSE-listed diversified natural gas company, to nominate a candidate for election to the company’s board at its 2017 annual meeting. It is the first known use of proxy access bylaws to make a nomination.  (Here is a link to the related Schedule 14N.) As I noted in this PubCo post, it was especially ironic that the first use of proxy access would be by an activist investor, given that the conventional wisdom has been that activists were unlikely to use proxy access and would opt instead for more traditional election contests. Some commentators still think that will be the case. Continue reading

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Proxy access gets a test drive

by Cydney Posner

There’s been a lot of sturm und drang about proxy access, but no one has ever used it to nominate a board candidate…. that is, until now.  CorpGov.net reports that, on November 9, 2016, GAMCO Asset Management Inc. (entity affiliated with activist investor Mario Gabelli) and certain affiliates used the proxy access bylaws recently adopted at National Fuel Gas Company, an NYSE-listed diversified natural gas company, to nominate an “independent highly-qualified nominee” for election to the company’s board at its 2017 annual meeting. In connection with the nomination, the proponent amended its  Schedule 13D to reflect submission of the nomination.  The 13D indicated that GAMCO believes its nominee’s “skill sets and highly relevant business and financial experience… will be extremely valuable” to the company and that it “is confident that its Nominee will have an immediate positive impact on the Board.” The 13D shows beneficial ownership of 7.81%  of the company’s shares. It’s particularly ironic that the first use of proxy access would be by an activist investor —  although Gabelli may reject that label —  given that the conventional (although not uniform) wisdom has been that activists were unlikely to use proxy access and would opt instead for more traditional election contests. (Update: Here is a link to the related Schedule 14N.) Continue reading

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