SEC Updates Rule 14a-8 Shareholder Proposal Rules

The U.S. Securities and Exchange Commission on September 23 adopted final rules amending the shareholder proposal rules in Rule 14a-8 of the Securities Exchange Act of 1934.

The final rules:

• Require that a shareholder submitting a proposal must have held $2,000 of company stock for at least three years (or higher amounts for shorter periods of time)
• Revise the one-proposal rule from applying to "each shareholder" to now applying to "each person" and
• Increase the levels of support required for a proposal to be eligible for resubmission at future shareholder meetings

The final rules will apply to proposals submitted for an annual or special meeting to be held on or after January 1, 2022.