As reported by Bloomberg, director of Corp Fin Keith Higgins, speaking at the ABA meeting of the Business Law section in Chicago, provided Corp Fin’s tally of no-action requests and responses in connection with shareholder proposals for the 2014 proxy season. According to the article, Corp Fin received 285 no-action requests to exclude shareholder proposals from issuer proxy statements, down 12% from the previous proxy season. Of those, approximately 20% were withdrawn. With regard to the remainder of the requests, the staff issued “no-action” responses regarding one-third of the proposals on procedural grounds and about 19% of the proposals on the basis that they were vague or misleading. However, a substantial majority (58%) of the no-action requests arguing for exclusion on the basis that the proposals were vague or misleading were denied.
With regard to the subject matter of the shareholder proposals this past season, the article reported that Higgins said that “about 64 percent of the requests for no-action relief involved environmental, social and governance issues, while another 14 percent involved executive compensation.” When an audience member asked whether Corp Fin will recommend “piecemeal reform” of the SEC’s shareholder proposal rule (alluding in particular to the petition for rulemaking filed by the Chamber of Commerce and eight other business groups requesting a reexamination of the rule regarding resubmission of shareholder proposals that fail to elicit meaningful shareholder support in prior submissions), Higgins is reported to have responded that “[s]hareholder proposals are a ‘complex topic’ for which ‘cherry picking particular pieces’ for reform likely will not be a ‘winning strategy’….” I guess that means “no.”