In this memo: “Responding to Rule Changes When the Rule Has Not Actually Changed: How Companies Should Approach Shareholder Proposals This Proxy Season,” Kirkland & Ellis suggests companies not forgo consideration of requesting no-action relief for shareholder proposals submitted for the forthcoming proxy season simply based on the SEC’s proposed amendments to Rule 14a-8 (which the Society commented on and reported on here) or perceived futility of success prompted by the staff’s 2021 policy shift (see below). Rather, the firm recommends companies consider requesting no-action relief in appropriate circumstances that, absent codification of the proposed amendments and assuming a change in Commission composition, may be better received, i.e., more in line with the staff’s traditional approach, which displayed greater sensitivity to potential shareholder abuse of the rule.
Access additional resources on our Shareholder Proposals page.
This post first appeared in the weekly Society Alert!