Tag: shareholder proposals

Will Corp Fin revisit (again) Rule 14a-8(i)(9), the exclusion for conflicting proposals?

The Council of Institutional Investors has sent a letter to William Hinman, director of Corp Fin, raising objections to the staff’s treatment of a recent shareholder proposal.  The staff permitted the company, the AES Corporation, to exclude a shareholder proposal submitted by John Chevedden that sought to reduce the threshold required for shareholders to call a special meeting from 25% to 10%. The basis for exclusion was Rule 14a-8(i)(9), which allows a shareholder proposal to be excluded if it directly conflicts with a management proposal to be submitted for a vote at the same shareholders meeting. In its letter, CII charged the company with “gaming the system to exclude a vote on a legitimate proposal that receives substantial shareholder support when it is voted on at other companies – to reduce the threshold for calling a special meeting,” and urged the SEC to revisit, once again, its approach to Rule 14a-8(i)(9). 

Shareholder proposal to exclude impact of share buybacks on executive compensation

In 2016, the AFL-CIO submitted several shareholder proposals designed to curb the impact of stock buybacks on executive compensation. (See this PubCo post.) The question at the time was whether we would see many more of these proposals. However, amid significant media and academic criticism, as well as relatively high stock valuations, the levels of stock buybacks declined, and the anticipated wave of proposals on buybacks did not materialize. However, the new tax act is expected to trigger a new spike in the levels of stock buybacks. (See this MarketWatch article.) Perhaps with that in mind, one of the most prolific proponents of shareholder proposals has submitted a proposal to eliminate the impact of stock buybacks in determining executive compensation.  Will these proposals now become a thing?

SEC-NYU Dialogue on Securities Markets focuses on shareholder engagement

While the topic of last week’s fourth SEC-NYU Dialogue on Securities Markets was shareholder engagement—focusing on the roles of institutional and activist investors—  the real hot topic was the recent letter to CEOs from BlackRock’s Laurence Fink, which was at least mentioned on every panel. (See this PubCo post.)

Get used to it— “lap dog” may now be a favored adjective in shareholder proposals

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.”

When theories collide: what happens when the shareholder preeminence theory meets the stakeholder theory?

Laurence Fink, the Chair and CEO of BlackRock, has issued his annual letter to public companies, entitled A Sense of Purpose.  As in prior years, Fink advocates enhanced shareholder engagement and a focus on long-term strategy development. (See this PubCo post and this PubCo post.) What’s new this year is that he is also advocating that companies recognize their responsibilities to stakeholders beyond just shareholders—to employees, customers and communities.  Holy smokes, Milton Friedman, what happened to maximizing shareholder value as the only valid responsibility of corporations?  

Corp Fin Senior Special Counsel discusses new SLB on shareholder proposals

On a webcast today, “Shareholder Proposals: Corp Fin Speaks,” presented by TheCorporateCounsel.net, Matt McNair, Senior Special Counsel in Corp Fin’s Office of Chief Counsel, provided some “soft” guidance regarding the implications of the recent SLB 14I on shareholder proposals, particularly the exclusions for “ordinary business” and “economic relevance.” (See this PubCo post.) 

Highlights of the 2017 PLI Securities Regulation Institute

Summarized below are some of the highlights of the 2017 PLI Securities Regulation Institute panel discussions with the SEC staff (Michele Anderson, Wesley Bricker, Karen Garnett, William Hinman, Mark Kronforst, Shelley Parratt, Ted Yu), as well as a number of  former staffers and other commentators. Topics included the Congressional and SEC agendas, fresh insights into the shareholder proposal guidance, as well as expectations regarding cybersecurity, conflict minerals, pay ratio disclosure, waivers and many other topics.