On October 22, the SEC issued much-anticipated guidance for the upcoming 2016 proxy season on the scope and application of Rule 14a-8(i)(9), which permits a company to exclude a shareholder proposal that directly conflicts with the company’s own proposal. Under the guidance, the SEC Staff will grant no-action relief to a company in respect of Rule 14a-8(i)(9) only if “a reasonable shareholder could not logically vote in favor of both proposals, i.e., a vote for one proposal is tantamount to a vote against the other proposal.”

As a result, it will be challenging for companies to exclude a shareholder proxy access proposal under Rule 14a-8(i)(9) even if management intends to include its own competing proposal.

See the D&P Client Update at: http://www.debevoise.com/insights/ publications/2015/10/sec-issues-guidance-on-rule.