Stay current on changes and developments in corporate law with a wide variety of resources and tools.
By Yin Wilczek
March 6 — While many companies are pondering how to proceed with their shareholder-submitted proxy access resolutions, General Electric Co. March 3 obtained no-action relief on an access proposal.
In a letter, Securities and Exchange Commission staff told GE that there is “some basis” for it to exclude an access proposal submitted by Kevin Mahar under 1934 Securities Exchange Act Rule 14a-8(i)(10).
“We note your representation that the board has adopted a proxy access bylaw that addresses the proposal’s essential objective,” said the letter, signed by Corp. Fin. Chief Counsel David Fredrickson. “Accordingly, we will not recommend enforcement action to the Commission if GE omits the proposal from its proxy materials in reliance on rule 14a-8(i)(10).”
The provision allows companies to omit shareholder proposals if they have “substantially implemented” the proposal.
The SEC in mid-January suspended no-action relief under Rule 14a-8(i)(9), leaving more than 50 companies in the lurch who had applied for relief under the provision with respect to their shareholder proxy access and other proposals.
The suspension pending staff review was announced after investors raised concerns that some companies were using the provision to avoid putting shareholder access resolutions to a vote in lieu of management resolutions with more stringent eligibility thresholds.
GE's board Feb. 6 adopted amendments to its bylaws that the company told the SEC were consistent with Mahar's proposal. GE's new bylaw allows a shareholder or a group of up to 20 shareholders who own 3 percent or more of stock for at least three years to nominate and include in the company's proxy materials directors constituting up to 20 percent of the board.
GE previously asked the staff if it could exclude the proposal under Rule 14a-8(b) based on Mahar's eligibility to submit the proposal. Corp. Fin. told the company in December that it did not agree the proposal could be challenged on eligibility grounds.
To contact the reporter on this story: Yin Wilczek in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Kristyn Hyland at email@example.com
The staff response is available at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2015/kevinmaharrecon030315-14a8.pdf.
The staff's Dec. 24 response is available at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2014/kevinmahar122414-14a8.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)