News & Events

Corporate Partners A.J. Kess and Karen Hsu Kelley and Corporate Associate Yafit Cohn published an article in Law360, “SEC Clarifies ‘Substantial Implementation’ In Proxy Access.” The article discusses the SEC staff’s issuance of 18 no-action responses clarifying the applicability of Rule 14a-8’s “substantial implementation” exclusion to proxy access shareholder proposals. Specifically, the staff’s no-action responses suggest that a difference between the proposal and the company’s bylaws with regard to the minimum share ownership required for proxy access will generally be fatal to a finding of substantial implementation, while discrepancies with regard to other provisions will not necessarily preclude the availability of the substantial implementation exclusion. The article suggests that, in light of the staff’s no-action letters, those issuers that have not yet adopted proxy access at the three-percent/ three-year thresholds but ultimately decided to do so should be comfortable adopting the proxy access bylaw provisions (within generally accepted market practice) that, upon engagement with their large shareholders, they determine to be in the best interests of the company and its shareholders.
 

To read the article in full, please click here.