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As Broc Romanek of recently noted, the SEC issued 18 no-action letters regarding the exclusion of shareholder proposals for proxy access under Rule 14a-8(i)(10) – the “substantially implemented” basis. Each of the issuers had already adopted a proxy access mechanic and sought to exclude the shareholder proposal as substantially implemented. The SEC provided relief to 15 issuers agreeing the proposals could be excluded and denied relief in three.  Where relief was denied it appeared to center on a 5% versus a 3% ownership threshold.

While good policy reasons exist for granting the no-action relief, it has the collateral effect of suppressing a shareholder vote on the issue and leaving the wishes of shareholders unknown.

However, based on the recent vote at Apple Inc., it appears many shareholders are happy with board designed proxy access. At Apple, 2,083,600,907 voted against a more stringent shareholder proxy access proposal, and 1,011,922,207 voted for.  This result occurred even though ISS recommended a vote for the shareholder proposal.  Of note is 18,560,227 shareholders abstained, with 1,559,945,580 broker non-votes.  The large number of abstentions makes it difficult to predict the outcome of future votes.

Jim McRitchie expresses his views in this blog.


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 100 largest firms in the U.S., Stinson Leonard Street has 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.