Last month, a U.S. federal appeals court struck down the Securities and Exchange Commission’s Rule 14a-11, more commonly known as the Proxy Access Rule, citing the regulator’s failure to provide a fair and consistent cost and benefit analysis on the rule implementation. The rule would have required companies to include shareholders’ director nominees in companies’ proxy materials. However, without Rule 14a-11, the issues ahead are in the implementation of Rule 14a-8 by the SEC, says Stanley Keller, partner at law firm Edwards Angell Palmer & Dodge.
According to Keller, the snubbed Rule 14a-11 would have put in place some limitation on eligibility of shareholders who can nominate their choice candidates in the proxy materials. Under the eligibility guidelines of 14a-11, qualified shareholders must meet some stringent requirements which include:
