In the wake of Whole Foods’ successful no-action request to have Corp Fin agree that it can exclude a proxy access shareholder proposal because it will have its own access proposal on the ballot, 10 more companies have submitted no-action requests that also argue under Rule 14a-8(i)(9) that the shareholder proposals are counterproposals as noted in this blog by Davis Polk’s Ning Chiu. For example, in its incoming no-action request, Marathon Oil notes that it has its own 5%/5-years proposal – and Cabot Oil’s own proposal offers a 5%/3-year threshold as noted in its no-action request. Compare these to the New York City Comptroller’s proposal of 3%/3-years. Given that Whole Foods received Corp Fin’s blessing with a 9%/5-years threshold, it should be a slam dunk for these companies.

Proxy Access: Whole Foods Lowers Own Proposal to 5%/5-Years

One potential roadblock is that proponent Jim McRitchie filed an appeal to Corp Fin’s Whole Foods decision right before Christmas. The appeal was made to the full Commission – so there is some chance that the Whole Foods decision could be overturned. Yesterday’s column by the NY Times’ Gretchen Morgenson covers the appeal – and notes that Whole Foods recently filed a preliminary proxy statement with a proxy access proposal of 5%/5-years – not the 9%/5-years that the company had included in its no-action request.

Assuming the Commissioners side with Corp Fin, it will be interesting to see how many of the 75 companies that have received a proposal from the Comptroller are going to go this exclusion route. And even more interesting will be how shareholders react to companies that place their own proposals on the ballot in an effort to knock these shareholder proposals off the ballot…

Our January Eminders is Posted!

We have posted the January issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!

– Broc Romanek

Food for thought as we start another year. As noted in this Forbes article, a new study by Jonas Heese of Harvard Business School claims that the SEC’s Enforcement Division treats companies with higher “employment intensity” better than other companies – a form of regulatory capture. “Employment intensity” is the number of a firm’s employees relative to its size.

Having been a first row observer to the Enforcement process at the SEC, I find this hard to believe. If anything, higher profile companies would have bigger targets on their backs as the agency hopes to send messages to the market in general with its cases. And individual Staffers are hoping to make a name for themselves by catching big fish in the act…

Venture Capital: Delaware Court Interprets Non-Standard NVCA Agreement

Here’s the intro from this Morris Nichols memo: “For reasons of economy in an early-stage investment, venture capitalists and founders often will use forms made available by the National Venture Capital Association (NVCA) as a basis to negotiate the post-investment governance structure of a corporation. In Salamone v. Gorman, the Delaware Supreme Court interpreted the product of such a negotiation. As noted in the opinion, the NVCA form contemplates per share (and not per capita) voting, and the opinion is a reminder of the need for clarity if there is intent to depart from such a regime.”

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net 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:

– Transition Timeline for New COSO Framework
– Restatements Have Fallen Sharply Since SOX
– Survey: Benchmarking the Accounting & Finance Function
– Directors: Recognizing & Reacting to Red (or Yellow) Flags
– FASB Issues Going Concern Assessment & Disclosure Standard

– Broc Romanek