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Jan. 7 — Baxter International Inc. shareholders won't be voting on a resolution calling on the health-care company to reduce benefits and stock options to management after staff of the Securities and Exchange Commission issued its opinion on the matter Jan. 6.
The proposal, submitted Nov. 1 by stockholder Dennis Breuel, called on Baxter's board to reduce the benefits by 60 percent to correspond to the “same reduction” shareholders saw in dividend payments.
In a “no-action” letter, the SEC Division of Corporation Finance said that it concurred with Baxter's argument that the resolution treads on “ordinary business operations” and thus may be excluded from the company's proxy materials under 1934 Securities Exchange Act Rule 14a-8(i)(7).
In submitting his proposal to Baxter, Breuel said shareholders took the hit in dividends following Baxter's spin-off of its drug business last year. “The management did not provide any basis for the reduction,” he said in his letter to Baxter. “The management should not be enriched without a corresponding reduction in their benefits.”
In July 2015, Illinois-based Baxter spun off its biopharmaceutical operations to create a separate company—Baxalta Inc.
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The no-action letter is available at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/dennisbreuel010616-14a8.pdf.
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