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By Yin Wilczek
July 24 — The SEC staff has again agreed to let FedEx Corp. exclude from its proxy materials a shareholder proposal over Dan Snyder's controversially named Washington football franchise.
The company has its name on the stadium of the Washington Redskins, which has been criticized for using a moniker that disparages Native Americans.
The shareholder proposal called on FedEx's board to issue a report by January 2016 outlining the steps it has taken or can take to distance itself from the National Football League team's name.
In a July 21 no-action response, the staff from the Securities and Exchange Commission told FedEx that it may exclude the proposal under 1934 Securities Exchange Act Rule 14a-8(i)(7). The provision allows companies to omit resolutions that involve their day-to-day business operations.
“In this regard, we note that the proposal relates to the manner in which FedEx advertises its products and services,” states the SEC response, signed by Mark Vilardo, special counsel at the SEC's Division of Corporation Finance.
FedEx did not immediately respond to a request for comment.
The resolution was submitted by Trillium Asset Management on behalf of the Oneida Trust of Oneida Tribe of Indians of Wisconsin and other FedEx stockholders. This is the second year that the proponents have submitted a resolution to FedEx on the team's name.
Last year, the proponents submitted a similar resolution urging FedEx's board to prepare a report by Feb. 1, 2015 addressing how the company could better respond to the alleged reputational damage caused by the name scandal.
The SEC staff allowed FedEx to exclude that resolution as well.
In challenging FedEx's no-action request over the 2015 proposal, Trillium argued in a June 24 letter to the SEC that the name controversy has transcended the ordinary business of FedEx to become a significant social policy. During the last 12 months, the matter has been debated not only by the sports media but also at “the White House, Capitol Hill, mainstream media, academia, football stadium parking lots, the courts” and even at the United Nations, Trillium said.
Over the years, the SEC staff has reversed its stance on certain topics under Rule 14a-8(i)(7) that it once said could be excluded—such as net neutrality—deciding that those matters have attracted enough attention to become a subject of widespread public debate.
Jonas Kron, Trillium senior vice president and director of shareholder advocacy, told Bloomberg BNA July 24 that Corp. Fin. generally is reluctant to change its position on what has transcended the ordinary business exclusion to become a significant policy issue.
“They'd rather err on the side of waiting too long,” Kron said. “We may actually be” at the point where the name scandal is a significant social policy issue, but Corp. Fin. “would prefer to be more cautious.”
In the meantime, Kron said Trillium and its co-proponents will continue to press the issue. He said they have filed a floor proposal which will go to a vote at FedEx's annual meeting in September.
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