SEC Proposes Changes To Shareholder Proposal Rule

The SEC proposed amendments to the procedural requirements and resubmission thresholds of the shareholder proposal rule ("SEA Rule 14a-8") to reflect decades of market changes. (See also SEC Attempts to Enhance Accuracy and Transparency of Proxy Voting Advice.)

SEA Rule 14a-8 requires companies to include shareholder proposals in their proxy statements, subject to certain requirements. The SEC proposal would amend the eligibility requirements, the one-proposal limit and the resubmission thresholds under SEA Rule 14a-8. Specifically, the proposal would:

• replace the $2,000 threshold for shareholder-proponent eligibility with three-tiered thresholds (i.e., requiring continuous ownership of a company's securities of at least (i) $2,000 for three years, (ii) $15,000 for two years or (iii) $25,000 for one year);