SEC Seeing Fewer Shareholder Proposal `No Action'Requests

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By Che Odom

Feb. 19 — The number of requests from companies seeking to exclude shareholder proposals from their proxy materials is down significantly from last year, an SEC official said.

“This season is a lot calmer than last season,” which was an exciting year for “no action” letters, David Fredrickson, general counsel and associate director of the Securities and Exchange Commission's Division of Corporation Finance, said Feb. 19.

Fredrickson, speaking at the Practising Law Institute's “SEC Speaks” conference in Washington, said that contributing to the relatively slower proxy season, the division is not seeing any “new, significant issues.”

One of the most common requests for no-action relief so far this year comes from companies claiming their proposals or bylaw provisions on proxy access substantially implement shareholder proposals seeking the mechanism, thus allowing those companies to omit the stockholder's resolution, he said.

“So we have granted a number of exclusions of shareholder proposals where the company has a provision that has similar thresholds—3 percent ownership for three years, allowing nominations for up to 20 percent of the board,” Fredrickson said, adding that the division is less concerned with other provisions that impact how a candidate may be nominated or how the nomination process will work.

Those other provisions include how many investors may join together to meet the ownership threshold and nominating board candidates multiple times, he said.

Relief Granted to 15 in One Day

Among other recent action, Corp Fin Feb. 12 granted no-action relief to 15 companies on shareholder proxy access proposals. The staff found the companies could exclude the resolutions on the basis that they had been substantially implemented.

According to Bloomberg BNA's review of the data, 12 of the 15 resolutions were submitted by shareholder activist John Chevedden.

The staff denied relief to three companies that implemented proxy access with a 5 percent ownership threshold when the shareholder proposed 3 percent.

“Our focus is on ‘substantially,'” Fredrickson said. “What we are looking for is whether the shareholder is getting pretty much what they were requesting.”

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

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

‘No Action' Relief Granted on Proxy Access Proposals Feb. 12
Company Seeking Relief Shareholder Proponent
Alaska Air Group John Chevedden
Baxter International Inc. John Chevedden
Capital One Financial Corp. John Chevedden
Cognizant Technology Solutions Corp. John Chevedden
Dun & Bradstreet Corp. John Chevedden
General Dynamics Corp. John Chevedden
Huntingon Ingalls Industries Inc. John Chevedden
Illinois Tool Works Inc. William Strine
Northrop Grumman Corp. John Chevedden
PPG Industries Inc. John Chevedden
Sciences Applications International Corp. Kenneth Steiner
Target Corp. John Chevedden
Time Warner Inc. Kenneth Steiner
UnitedHealth Group John Chevedden
Western Union Co. John Chevedden
Source: Securities and Exchange Commission  

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