Gibson Top in Navigating SEC No-Action Shareholder Process

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By Che Odom

May 10 — The trend of increasing shareholder activism means companies spend more time and resources engaging with investors.

It also presents a business opportunity—one that Los Angeles-based Gibson, Dunn & Crutcher LLP and a few other firms have been able to seize.

Bloomberg BNA's Corporate & Transactional editorial team looked at “no action” letters that received responses from the Securities and Exchange Commission staff between Jan. 1 and May 10. It found that Gibson Dunn had filed 38 of the letters—far more than any other law firm out of the 121 requests in which companies were represented by outside counsel.

Hogan Lovells US LLP submitted the second most no-action requests at nine, followed by eight from Davis Polk & Wardwell LLP, six from Skadden, Arps, Slate, Meagher & Flom LLP, and five each from Cravath, Swaine & Moore LLP and Morrison & Foerster LLP.

Gibson Dunn leads in the no-action process because the firm recognized years ago that shareholder proposals were becoming a significant tool used by a range of investors to raise governance issues, Ronald O. Mueller, a Washington-based corporate and securities law attorney and partner with the firm, told Bloomberg BNA.

“As an increasing number of public companies asked us to assist them in responding to proposals they received, we devoted a significant amount of research and analysis that helped us develop a good track record of being knowledgeable and helpful in this area,” he said.

Informal Mechanism

During the no-action process, companies ask the SEC staff whether they may omit a particular shareholder resolution from their proxy materials, preventing it from going to a stockholder vote. The staff concurrence is informal—only courts such as federal district courts can decide whether companies must include the proposal in their proxies.

Mueller and Elizabeth Ising, Gibson Dunn partner and co-chair of the firm's securities regulation and corporate governance practice, have advised companies on hundreds of shareholder proposals. Only a fraction of those result in no-action challenges, Ising told Bloomberg BNA.

Their practice also involves helping companies decide whether to implement a proposal, how to engage with proponents to try to reach a compromise and what argument to make when soliciting votes against shareholder resolutions, Ising said.

Top Questions

The most important questions for stakeholders of a company facing an activist are whether the issue raised is relevant to the business and whether the specific action proposed is the best way to address the issue, Mueller said.

“The increase in shareholder activism means that for both of us and our public company clients, more time and resources are being spent on engagement with company shareholders, addressing what the company is already doing on the issue or why a proposal may not be in the best interest of shareholders,” he said.


Meanwhile, Damien Zoubek, a partner in Cravath's corporate department, said his firm has become a leader in advising clients on shareholder proposals as a result of its successful mergers and acquisitions and corporate governance practices.

Though most big-name activists don't commonly use the shareholder proposal avenue to stir change, the firm looks at activism “as a broad canvas,” requiring it to be skilled in the no-action process, Zoubek said.

Representatives from other law firms handling no-action letters didn't respond to requests for comment.

To contact the reporter on this story: Che Odom in Washington at

To contact the editor responsible for this story: Yin Wilczek at

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