November 4, 2021

Shareholder Proposals: Peirce & Roisman Ask “What Happens Now?”

I can’t recall ever seeing commissioners issue a dissenting statement from a Staff Legal Bulletin – well, at least until now. Commissioners Peirce and Roisman issued this statement on SLB 14, which, to say the least, they find perplexing:

The rationale for today’s action is a bit of a mystery. First while the bulletin lays out a case for repealing the last three bulletins, it does not fill the void left by their repeal. Specifically, it fails to address the problem those three bulletins were trying to solve, whether it still exists, and how it will be addressed going forward. For example, with respect to the significance analysis under Rule 14a-8(i)(7), the rescinded bulletins were designed to help issuers determine whether a proposal dealing with the company’s ordinary business operations is nevertheless not excludable because it raises a policy issue so significant that it transcends the day-to-day business matters of the company. With these bulletins now rescinded, how should these proposals be analyzed?

They also point out that the SLB doesn’t address the “criteria, timeframe or proof” necessary to support a finding that a topic is socially significant or has a broad societal impact, and suggest that the return to the prior standard will only exacerbate the massive burden on the Staff associated with the process of refereeing Rule 14a-8 proposals. It’s hard to argue with that last point.

John Jenkins