Proposed Amendments of Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8

On November 5, 2019, the SEC proposed amendments to certain procedural requirements and resubmission thresholds under the shareholder proposal rule of Rule 14a-8.

Under the proposed amendments, a shareholder would be eligible to submit a Rule 14a-8 proposal for inclusion in a company’s proxy statement if the shareholder has continuously held at least:

  • $2,000 of the company’s securities entitled to vote on the proposal for at least three years;
  • $15,000 of the company’s securities entitled to vote on the proposal for at least two years; or
  • $25,000 of the company’s securities entitled to vote on the proposal for at least one year.

Additionally, the proposed rules would require the shareholder to provide a statement that he or she is able to meet with the company no less than 10 days, nor more than 30 days, after submission of the shareholder proposal and would apply the one proposal limit to “each person” rather than “each shareholder” who submits a proposal.

Finally, the SEC is proposing to increase the applicable resubmission thresholds, pursuant to which a company is required to resubmit shareholder proposals from previous years if the proposals received a certain percentage of the votes cast. As such, the resubmission thresholds of 3%, 6%, and 10% under Rule 14a-8(i)(12) would be increased to to 5%, 15%, and 25%, respectively.

The proposed amendments are currently subject to a 90-day comment period and can be found here.

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