SEC Adopts Long-Awaited Amendments to Modernize Shareholder Proposal Rule

SEC Adopts Long-Awaited Amendments to Modernize Shareholder Proposal Rule

Blog Focus on Audit Committees, Accounting and the Law
Yesterday, the Securities and Exchange Commission (SEC) adopted amendments to the shareholder proposal rule – Rule 14a-8 under the Securities Exchange Act of 1934. The amendments update the submission and resubmission thresholds for shareholder proposals and limit the ability of individual persons – whether a shareholder proponent or representative – to submit more than one proposal to an individual company for an annual meeting of shareholders. As the Commission noted in announcing the rule changes, Rule 14a-8 has not been substantively changed since 1998 in the case of the initial submission eligibility thresholds and 1954 in the case of the resubmission shareholder support thresholds, so the rule changes represent a significant development and welcome modernization of the shareholder proposal system. 

See our recent client alert for a discussion of these latest amendments.