SEC Adopts Amendments to Modernize Shareholder Proposal Rule

The Securities and Exchange Commission today voted to adopt amendments to modernize its shareholder proposal rule, which governs the process for a shareholder to have its proposal included in a company’s proxy statement for consideration by all of the company’s shareholders. The principal requirements for: (1) initial inclusion in the proxy statement — the amount and length of ownership of the proposing shareholder — and (2) for subsequent resubmission if the proposal is not approved — the amount of support from other shareholders — have not been substantively amended since 1998 and 1954, respectively. The amendments will facilitate engagement among shareholder-proponents, companies and other shareholders, including preserving the ability of smaller shareholders to access the proxy statements of the companies in which they have demonstrated a continuing interest.