SEC Proposes to Modernize Shareholder Proposal Rule

The SEC has issued a proposed rule, Procedural Requirements and Resubmission Thresholds Under Exchange Act Rule 14a-8.

The proposal would:

• “[U]pdate the criteria, including the ownership requirements, that a shareholder must satisfy to be eligible to have a shareholder proposal included in a company’s proxy statement.”
• “[U]pdate the ‘one proposal’ rule to clarify that a single person may not submit multiple proposals at the same shareholder’s meeting, whether the person submits a proposal as a shareholder or as a representative of a shareholder.”
• “[M]odernize the levels of shareholder support a proposal must receive to be eligible for resubmission at the same company’s future shareholder meetings.”

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register. For more information, see the following on the SEC’s Web site:

• Press release.
• Proposed rule.
• Public statements by SEC Chairman Jay Clayton and Commissioners Allison Herren Lee, Elad L. Roisman, and Hester M. Peirce.