From here on out, I guess you can count on seeing your directors described as “lap dogs” in some shareholder proposals or, more accurately, nascent or possible lap dogs. (That helps, doesn’t it?) That’s because, in three separate shareholder proposals submitted to The Boeing Company by three beneficial owners (all working through John Chevedden), the SEC refused to allow the company to exclude portions of the supporting statements that suggested that some of the company’s directors might be “lap dogs.”
In remarks this week before the Chamber of Commerce, new SEC Chair Jay Clayton indicated that the SEC will be taking a hard look at the shareholder proposal rules. As reported in thedeal.com, Clayton advised that it is “very important to ask ourselves how much of a cost there is….how much costs should the quiet shareholder, the ordinary shareholder, bear for idiosyncratic interests of other [investors].” Clayton was certainly speaking to a receptive audience—the Chamber has also recently voiced criticism of the shareholder proposal process (see this PubCo post) and, on the same day as Clayton’s remarks, issued its own report proposing changes to staunch the flow of proposals (discussed below). As you may recall, in the Financial CHOICE Act of 2017, the House also proposed to raise the eligibility and resubmission thresholds for shareholder proposals to levels that would have effectively curtailed the process altogether for all but the very largest holders. Although that Act is currently foundering in the Senate, at the same Chamber presentation, Commissioner Michael Piwowar commented to reporters that the SEC could certainly act on its own without any impetus from Congress, observing that the “chairman sets the agenda, but I’m going to be meeting with folks at public companies to talk about their experiences with proxy season.” With both the House and the Chamber having weighed in, if the SEC now takes up the cause on its own, the question is: just how far will it push?
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 […]
Trinity Wall Street files cert petition: will SCOTUS delve into the “ordinary business operations” exclusion for shareholder proposals?
by Cydney Posner You might recall Trinity Wall Street v. Wal-Mart Stores Inc, a case involving a shareholder proposal requesting that Wal-Mart’s board of directors develop a policy regarding the sale of high-capacity firearms, such as the AR-15 assault rifle, and other dangerous products. Wal-Mart sought to exclude Trinity’s proposal from […]
Third Circuit renders opinion in Trinity Wall Street v. Wal-Mart (and admonishes SEC to issue new guidance)
by Cydney Posner Yesterday, the Third Circuit finally rendered its opinion in Trinity Wall Street v. Wal-Mart Stores Inc, a case involving a shareholder proposal submitted by Trinity Wall Street requesting that Wal-Mart’s board develop a policy regarding the sale of high-capacity firearms and other dangerous products. Wal-Mart sought to […]
by Cydney Posner At the PLI conference on February 10, Corp Fin Director Keith Higgins, while focusing primarily on the issue du jour of Rule 14a-8(i)(9), the rule that permits companies to exclude from their proxy statements shareholder proposals that directly conflict with management proposals, also spent a little time […]