"No-Action Letter Citation: Analyzing Excluded Shareholder Proxy Proposals" from Intelligize provides valuable insights on Rule 14a-8 no-action letter request and response trends based on the firm's analysis of no-action letters from 2016 through March 31, 2019 (Q1 2019).
Key takeaways include:
- More than half of all no-action requests granted by the SEC from 2016 through Q1 2019 were based on Rule 14a-8(i)(7) (ordinary business operations) or Rule 14a-8(i)(10) (substantially implemented).
- Requests based on multiple prongs have most commonly succeeded on the basis of these three exceptions: ordinary business, substantial implementation, proponent eligibility qualifications.
- Exclusions are almost never granted on the basis of Rule 14a-8(i)(3) - which permits the exclusion of a proposal or supporting statement that is contrary to the proxy rules, including Rule 14a-9 (prohibition on materially false or misleading statements).
- Requests to exclude human, animal or consumer rights-related proposals increased nearly 80% from 2016 - from 14 no-action requests in all of 2016 to 25 in Q1 2019 alone.
- Since 2016, more than 40% of environmental-related proposal no-action requests granted by the SEC were based on Rule 14a-8(i)(7).
- Companies increasingly use Rule 14a-8(i)(7) in connection with activist shareholder proposals based on E&S topics.
See also Intelligize's release, and additional information & resources on our Shareholder Proposals page. This post first appeared in the weekly Society Alert!