February 7, 2018

Shareholder Proposals: Investor Angst Over Corp Fin’s (i)(9) Position

As noted in this Reuters article, the Council of Institutional Investors has sent this letter to Corp Fin objecting to its recent no-action decision allowing AES Corp to exclude a shareholder proposal on the threshold required for investors to call a special meeting.

CII claims that AES is gaming the no-action process to exclude a shareholder proposal that typically receives substantial investor support — and urges the SEC to revisit its approach to Rule 14a-8(i)(9)(the “directly conflicts” exclusion basis) – so that it is more consistent with the language & intent of the underlying rule. CII says that AES’s reasoning is reminiscent of the argument that Whole Foods used in ’15 to exclude a shareholder proposal about proxy access. That ultimately prompted a Corp Fin review that led to Staff Legal Bulletin No. 14H as the appropriate guidance for determining the scope of Rule 14a-8(i)(9). Also see this Cooley blog

More on “Mandatory Arbitration: Will the SEC Give Corporate America a Gift?”

Last week, John blogged about that the SEC may be open to revisiting the permissibility of bylaws requiring investors to arbitrate their claims against public companies. As noted in this article, investors are expressing angst about this possibility. CII sent a letter to the SEC about this topic too…

Tomorrow’s Webcast: “Auctions – The Art of the Non-Price Bid Sweetener”

Tune in tomorrow for the webcast – “Auctions: The Art of the Non-Price Bid Sweetener” – to hear McDermott Will’s Diego Gómez-Cornejo, Alston & Bird’s Soren Lindstrom and Western Reserve Partners’ Chuck Aquino discuss how non-price bid sweeteners move the needle with private sellers in competitively bid deals.

Broc Romanek