TheCorporateCounsel.net

According to a new report issued by the Shareholder Rights Group, the Staff is seeing a lot more no-action letter requests on shareholder proposals this year, and is permitting companies to exclude a significantly higher percentage of those proposals than they did last year:

Evaluation of SEC staff no action decisions on shareholder proposals from November 1, 2023 to May 1, 2024 demonstrates that the SEC has supported company requests for exclusion of proposals roughly 68% of the time. Companies sharply increased the number of requests filed with the SEC during the same period, with these two developments combining to produce a surge of exclusions.

At this time last year, the Staff permitted exclusion of 56% of the proposals for which no-action relief was sought. The report says that so far this year, the Staff has issued 259 decisions on no-action letters compared to 167 last year and has granted no-action requests for 139 proposals, compared to 76 last year.  The report says that numerous climate-related proposals have been excluded in situations where companies argued they involved micromanagement, and that social-related proposals have been bounced on similar grounds.

– John Jenkins