Yesterday, Corp Fin issued Staff Legal Bulletin No. 14K – which makes an even dozen SLBs devoted to shareholder proposals. It follows up on some of the topics addressed over the past two years in Staff Legal Bulletin 14I & Staff Legal Bulletin 14J. Among other things, the new SLB provides guidance on:
– Rule 14a-8(i)(7)’s “ordinary business” exclusion, the role that the board’s analyses of why the policy issues involved in a proposal are not significant plays in the Staff’s consideration of a no-action request, and the board analyses that the Staff has found – and not found – to be persuasive.
– The factors considered in determining whether a proposal may be excluded under Rule 14a-8(i)(7) on the basis that it would involve “micromanagement” of the company, including circumstances that may result in even precatory proposals being deemed to raise micromanagement issues.
In addition, the SLB sets forth the Staff’s view that companies should refrain from an “overly technical” reading of proof of ownership letters in a effort to avoid including a proposal. In particular, the SLB points out that the Staff has not required proponents to adhere strictly to the suggested format for those letters contained in Staff Legal Bulletin 14F in order to avoid having their proposals excluded under Rule 14a-8(b).
Hey, remember those whistleblower proposals I recently wrote about? The SEC also announced that it has scheduled an open meeting on October 23rd to consider adopting the proposed amendments. Based on the SEC’s recent track record when it comes to cancelling open meetings, I sure wouldn’t recommend buying non-refundable tickets if you’re planning to head in to DC to attend.
-John Jenkins, TheCorporateCounsel.net October 17, 2019
