On February 3, 2020, Nasdaq submitted two comment letters supporting the U.S. Securities and Exchange Commission’s (SEC) efforts to improve the proxy process.
The first comment letter relates to an SEC proposal that will update the procedures and resubmission thresholds for shareholder proposals under Exchange Act Rule 14a-8. Nasdaq has long advocated for updating Rule 14a-8 and commends the SEC for its efforts to improve engagement between companies and the proponents of shareholder proposals, for the benefit of all other shareholders in the relevant company. Nasdaq also asked the SEC to reevaluate the use of representatives altogether in the shareholder proposal process to ensure that the proponent has a genuine and meaningful interest in the relevant proposal.
The second letter relates to an SEC proposal that will require transparency about the methodologies and conflicts of proxy advisory firms, as well as a mechanism for companies to address errors by these firms. Over the past decade, Nasdaq has called for reforms to increase transparency, accuracy and accountability in the proxy advisory industry and commends the SEC for its efforts to strengthen the integrity of proxy voting advice. In order to provide meaningful feedback to the SEC, Nasdaq spoke with public companies to understand their real-world problems and concerns and included their feedback in our comment letter.
Proposed Amendments to Modernize the Shareholder Proposal Rule
Proposed Amendments to Improve Accuracy and Transparency of Proxy Voting Advice