Thank you to Soundboard Governance for highlighting recent no-action determinations by SEC staff denying requests to concur with exclusion of proposals (in reliance on Rule 14a-8(i)(7)) submitted by The Humane Society of the United States to Brinker International and the Campbell Soup Company seeking that all future annual and special shareholder meetings accommodate virtual attendance (either via hybrid or virtual-only).
The same proposal reportedly was also submitted to another company that did not request no-action relief. In its pitch to the SEC (page 3), the Humane Society raised health, safety, inclusion, accessibility, and sustainability concerns as bases for supporting inclusion of the proposal:
As Soundboard Governance President Doug Chia notes, meeting attendance in this context includes the opportunity to participate and vote (upon verification) through a virtual platform. Notably (as the post details), historically, staff has granted no-action relief on the basis of Rule 14a-8(i)(7)) for proposals seeking assurances that shareholders have the ability to attend shareholders meetings in person.
A subsequent Soundboard Governance post reported that SEC staff posted a letter to Brinker to support its denial of the no-action request. The key text supporting staff’s decision takes virtual access to shareholder meetings out of the ordinary business exclusion due to technological and COVID-related developments:
Given that “technological progress” did not appear to factor into the staff’s responses to no-action requests on meeting formats historically, the post surmises that staff is identifying the COVID-related public health concerns as a “significant policy issue,” and justifiably questions how future staff decision-making on this issue will play out once the pandemic restrictions subside.
Access additional resources on our Shareholder Proposals page.
This post first appeared in the weekly Society Alert!