H.R. 5756 (Rep. Sean Duffy [R-WI]), which would require the SEC to update the resubmission thresholds for shareholder proposals, passed the House Financial Services Committee today 34-22. As reported in last week's Society Alert, the bill calls for increases to the Rule 14a-8 shareholder proposal resubmission thresholds from the current 3%, 6%, and 10% thresholds to 6%, 15% and 30%, respectively - consistent with the SEC's 1997 Proposed Amendments to Rules on Shareholder Proposals.
Rule 14a-8(i)(12) provides:
Resubmissions: If the proposal deals with substantially the same subject matter as another proposal or proposals that has or have been previously included in the company's proxy materials within the preceding 5 calendar years, a company may exclude it from its proxy materials for any meeting held within 3 calendar years of the last time it was included if the proposal received:
- Less than 3% of the vote if proposed once within the preceding 5 calendar years;
- Less than 6% of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years; or
- Less than 10% of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years.
Next step: The bills go to the House floor, where they will be scheduled for consideration by the full House of Representatives.