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James McRitchie was the shareholder proponent who submitted a  proxy access proposal to Whole Foods.  The SEC granted Whole Foods’ request to exclude the proposal.  Mr. McRitchie has now requested an appeal to the full Commission of the staff’s decision to grant Whole Foods a no-action letter permitting the omission of his proposal.

According to Mr. McRitchie, the staff’s position effectively denies shareholders the right to vote on competing proposals involving similar or related topics solely because the proposals contain different terms or thresholds. The interpretation effectively limits shareholders to consideration of proposals sponsored by the board of directors and eliminates any opportunity for shareholders to present alternative criteria.

Mr. McRitchie believes there is no conflict between the two proposals.   Mr. McRitchie’s proposal is precatory, merely “ask[ing]” the board to adopt an access proposal with 3%/3 year periods. Thus, he surmises, to the extent both the management bylaw and shareholder proposal are adopted, there will be no actual conflict.

We discussed yesterday that Marathon Oil had submitted a no-action letter to exclude the New York City Pension Funds’ proxy access proposal.  Marathon’s no-action letter was based on the same analysis as Whole Foods.

Now Cabot Oil has submitted a no-action letter to the SEC seeking to exclude the New York City Pension Funds’ proxy access proposal. Of course, it’s based on the Whole Foods precedent.  Cabot Oil’s board has determined to submit a proxy access proposal to its shareholders to permit any shareholder or group of shareholders collectively owning 5% or more of Cabot’s stock for three years to nominate candidates for election to the Board.

Yesterday, I predicted that it’s likely the SEC will approve Marathon Oil’s request. Today I am less sure because of Mr. McRitchie’s appeal.


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