The SEC’s Competing Proxy Proposals

The SEC’s proposals out for comment [both] address amendments to the existing federal proxy rules.

Release No. 34-56161—Shareholder Proposals Relating to the Election of Directors

Proposed amendments would confirm the SEC’s position: public companies can exclude shareholder proposals from proxy statements if the proposals:

• nominate or oppose particular candidates for election to the board of directors, or
• introduce a bylaw amendment to enable shareholders to directly nominate board members in the future.

Release No. 34-56160—Shareholder Proposals

Proposed amendments would require companies (under certain conditions) to include in their proxy statements proposed bylaw amendments to enable shareholders to nominate prospective board members in the future.  To take advantage of these amendments:

• The proposing shareholder or group of shareholders must have owned at least 5% of the company’s stock for at least one year, and cannot have acquired that stock with an intent to seek control of the company;
• The proposing shareholder or group of shareholders must meet certain disclosure requirements; and
• The proposal must comply with the law of the state of the company’s incorporation and the company’s charter and bylaws, and cannot be excludable under other federal proxy rules.

Prepared by Lois Yurow

Lois Yurow (lois@securitieseditor.com) practiced corporate and securities law for several years and now helps public companies satisfy the SEC’s plain English disclosure requirements.

Comments from Accountability-Central Users

Submit a Comment

Adding an entry to the guestbook

Firstname *

Surname *

Email: (Note: Not required, will be displayed on public page)

Website

Place

Please enter here the word as displayed in the picture. This is to prevent spamming. *
If you can't read the word, click here.  

Message *