As previously noted, New York City Comptroller Scott M. Stringer, on behalf of the $160 billion New York City Pension Funds, has submitted proxy access shareowner proposals to 75 companies. The proposals request a bylaw to give shareowners who meet a threshold of owning three percent of a company for three or more years the right to list their director candidates, representing up to 25 percent of the board, on a given company’s ballot.
Marathon Oil was the recipient of one of those proposals. It has filed this no-action letter with the SEC, asking the SEC for permission to exclude the proposal because it directly conflicts with a proposal it plans to submit.
It’s likely the SEC will approve Marathon Oil’s request. The SEC recently gave Whole Foods similar no action relief on the same grounds. However, Whole Foods had a nine percent for five years threshold, while Marathon has five percent for five years. (5% for five years). The Marathon no-action letter states “The Company believes that the nature of the matters in conflict between the Proponent’s Proposal and the Company Proposal are identical to the matters in conflict in Whole Foods where no-action relief was granted to the company.”
What remains to be seen is if there is investor backlash from this technique. As Marathon Oil’s proposal is much more investor friendly than Whole Foods, perhaps the risk is minimal.
ABOUT STINSON LEONARD STREET
Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 75 largest firms in the U.S., Stinson Leonard Street has more than 520 attorneys and offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.
The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.