Proxy Access August 2015
Policy & Regulation

SEC Proposes Amendments to Rules Governing Proxy Solicitations and Shareholder Proposals

SEC Proposes Amendments to Rules Governing Proxy Solicitations and Shareholder Proposals

On November 5, 2019, the SEC held an open meeting and formally proposed amendments to improve the accuracy and transparency of proxy voting advice and modernize the shareholder proposal rule. The proposals are subject to a 60 day comment period following publication of the proposing release in the Federal Register. 

The proposed amendments to the proxy process include clarifying that proxy advisory firm recommendations are a proxy solicitation, requiring proxy advisory firms to disclose conflicts of interest, providing companies with an opportunity to review their report before it is published and regulating material misstatements in the recommendations of proxy advisory firms. 

The changes to the shareholder proposal process require a proponent to have held its shares for at least three years in order to take advantage of the current minimum threshold of $2,000—otherwise, a proponent holding stock for only one or two years must hold a minimum amount of $25,000 and $15,000, respectively.  The proposed amendments also increase the resubmission thresholds from 3%, 6% and 10% for matters voted on once, twice or three or more times in the last five years, respectively, to 5%, 15% and 25%, respectively, and permit a company to exclude a proposal if it was voted on three or more times in the last five years, received less than 50% support in the most recent vote, and had a decline in support from the prior vote. 

Each of these issues were identified in Nasdaq’s blueprint to revitalize the U.S. capital markets.

Proposed Amendments to Improve Accuracy and Transparency of Proxy Voting Advice

Proposed Amendments to Modernize Shareholder Proposal Rule

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.