SEC Modernizes The Shareholder Proposal Rule

On September 23, 2020, the SEC adopted final amendments to modernize the process for shareholder proposals under Exchange Act Rule 14a-8 (the "Amendments"). As with the rules affecting proxy advisory firms, the Amendments were adopted on a 3-2 vote, with Chairman Clayton and Republican Commissioners Peirce and Roisman forming the majority and Democratic Commissioners Lee and Crenshaw dissenting. The Amendments, which will not apply to any shareholder proposals submitted during the 2021 proxy season, update the initial ownership threshold for eligibility, increase the resubmission thresholds and make several procedural changes. This Alert summarizes key aspects of the Amendments.

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