February 17, 2011

Shareholder Proposals: Explanations for Corp Fin “Ordinary Business” Exclusions No Longer Rare

Last year, the Corp Fin Staff promised a bit more in the way of explanation when it issues no-action responses in the shareholder proposal area. So far this proxy season, it looks like the Staff is keeping its promise. Recent no-action letters granting exclusion on “ordinary business” grounds (ie. Rule 14a-8(i)(7)) bears this out. For example, in this response to Ford Motor, the Staff includes a sentence about how setting product pricing is “fundamental to management’s ability to run a company on a day-to-day basis.” Other examples include responses to Duke Energy, Verizon and Masco.

And in this response to AT&T, the Corp Fin Staff explains how net neutrality “has recently attracted increasing levels of public attention” but that it hasn’t emerged “as a consistent topic of widespread public debate such that it would be a significant policy issue.” I imagine one could debate whether the Staff’s statement foreshadows a possible change to the topic being deemed a significant policy issue – but my view is that the Staff is merely articulating a nuance on how to distinguish whether something is ordinary business.

None of the Staff positions is these no-action letters are new, but the one sentence explanations should help us read the tea leaves as to how the Staff feels about certain topics. Hat tip to Keir Gumbs of Covington & Burling for pointing these new responses out!

Note that I believe the AT&T resolution was filed with Mike Diamond – aka “Mike D” – of the Beastie Boys as a co-proponent.

Moxy Vote Update

In this podcast, Mark Schlegel of Moxy Vote LLC discusses the latest developments in proxy voting capabilities (here is last year’s podcast), including:

– What happened over the last year at Moxy Vote since the launch?
– What can issuers do with Moxy Vote?
– What are we doing for this proxy season?

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Facebook’s Raw Deal
– California: No Rescission Without Privity
– Interview: Delaware Chancellor Chandler on Key Director Issues
– Ninth Circuit: Guidance on Important Scienter Issues
– Does That Matter Really Need To Go To The Board?

– Broc Romanek