Tag: shareholder proposals amendments

Resolution introduced in Senate to scrap SEC’s recent shareholder proposal amendments under the CRA

There has been a lot of speculation about the extent to which Congress would take advantage of the Congressional Review Act to dispense with some of the “midnight regulations” adopted during the prior administration. (See this PubCo post.) We may finally be getting some insight into that question.  Senator Sherrod Brown has now introduced a joint resolution providing for congressional disapproval of the SEC’s new(ish) shareholder proposal amendments, which were the subject of strong dissents from the Democratic SEC Commissioners when they were adopted in September 2020. The resolution simply provides that Congress disapproves the rule and, as a result, the rule will have no force or effect. As reported by Bloomberg, Brown stated that “[b]y raising eligibility and resubmission thresholds for shareholder proposals, the rules take away an important tool to push for better corporate governance, increase transparency, and address the gender pay gap….Congress must repeal the rule, and we need to find ways to increase shareholder participation and to make executives more accountable.” As reported by Reuters, the National Association of Manufacturers described the resolution as “heavy-handed” and stated that it “does not believe the CRA is the appropriate mechanism for review of the SEC’s rule to modernize the proxy process […] and looks forward to engaging with the SEC to defend the vital reforms included within it.” Will the resolution win the necessary support?