SEC Staff Permits Exclusion of Proxy Access “Revision” Proposal Due to “Substantial Implementation”
In recent months, the staff of the Securities and Exchange Commission (“SEC”) declined to grant no-action relief to at least three companies – H&R Block, Microsoft, and Apple – with regard to a shareholder proposal that requested several specific revisions to the company’s existing proxy access bylaw. In each of these cases, the Staff rejected arguments that the company “substantially implemented” the shareholder proposal by virtue of its previous adoption of proxy access at the three-percent/three-year thresholds. On November 4, 2016, the Staff determined, for the first time, that a shareholder proposal seeking to amend a company’s existing proxy access bylaw may be excluded as “substantially implemented” under Rule 14a-8(i)(10).