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SEC Rethinks Proxy Exclusions, Takes Pro-Shareholder Approach

Joe Mont | October 23, 2015

Whether it eases confusion or creates more of it remains to be seen, but the Securities and Exchange Commission’s Division of Corporation Finance issued a staff legal bulletin on Thursday to clarify its application of Rule 14a-8(i)(9), which permits the exclusion of shareholder proposals that directly conflict with the company’s own proposals, in order to provide clarity for the 2016 proxy season. In large part, the changes are viewed as more favorable to shareholders.

The rule, adopted back in 1967 and revised several times since, permits a company to exclude a proposal “if the proposal directly conflicts with one of the company’s own proposals to be submitted to shareholders at the same meeting.” During the most recent proxy season, questions arose about the Division’s interpretation of...

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