February 9, 2005

Death Blow for Shareholder Access?

Maybe not, but on Monday – as reported by the NY Times in this article – Corp Fin allowed the exclusion of shareholder access proposals submitted by major shareholders of Verizon, Qwest and Halliburton. This decision is consistent with Corp Fin’s final decision on a similar shareholder proposal submitted to Disney at the end of the year.

As I blogged back on December 30th, the shareholders tried to rely on footnote 74 in the SEC’s proposing release, which said that while the SEC was deliberating on final rules, shareholders could submit shareholder proposals that mirror the framework of proposed Rule 14a-11.

In the identical no-action responses sent on Monday, Corp Fin Director Alan Beller implied that the footnote (and the shareholder access proposal itself perhaps?) had become stale with his statement, “Given the passage of time since the proposal, we will not recommend enforcement action to the commission” if the companies omitted the shareholder proposals from their proxy materials. So with these letters, Corp Fin has basically reverted to the Division’s historical approach to election proposals under 14a-8(i)(8).

How to Use Governance Ratings

Learn how to use governance ratings in this interview with Gavin Anderson of GMI International. I was surprised by Gavin’s comments regarding the appetite of retail investors for governance ratings.