Preparing for an Evolving Shareholder Proposal Landscape
This White Paper examines how recent commentary from U.S. Securities and Exchange Commission Chairman Paul Atkins signals a greater role for state law in defining shareholders' ability to place proposals on company proxy statements. Chairman Atkins has articulated his views about how state law and Rule 14a-8 under the Exchange Act intersect Rule 14a-8(i)(1), which permits a company to exclude a shareholder proposal if it is not a "proper subject" for shareholder action under state law.
We outline the potential implications for companies and boards, including a possible heightened use of advance notice bylaws and how private ordering might ultimately result in companies adopting objective procedural guardrails such as ownership thresholds.
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