Sanford Lewis is Director of the Shareholder Rights Group. This post is based on his Shareholder Rights Group memorandum.
Evaluation of SEC staff no action decisions on shareholder proposals from November 1, 2023 to May 1, 2024 demonstrates that the SEC has supported company requests for exclusion of proposals roughly 68% of the time. Companies sharply increased the number of requests filed with the SEC during the same period, with these two developments combining to produce a surge of exclusions.
The no action process is an informal review process through which the SEC Staff advises companies and their investors on whether the SEC Staff would likely recommend enforcement action if a company fails to include a submitted shareholder proposal on its annual proxy statement. The Staff “grants” the company’s request if it finds some basis to agree with the company’s arguments that the proposal is excludable under one of the elements of SEC Rule 14a-8, the shareholder proposal rule. It “denies” the request if it is unable to concur with the company’s arguments.