This week, the SEC adoped final rules on proxy access which will require companies to provide certain shareholders or shareholder groups the opportunity to nominate candidates for boards of directors and to include information in the company's proxy materials about, and the ability to vote for, these shareholder nominees.
The final rules contain various eligibility requirements for nominating shareholders or groups, including that they have held 3% of the company's securities for at least three years but that this is without the purpose or effect of changing control of the company. There are also eligibility requirements for shareholder nominees, such as meeting the objective independence standards of any applicable national securities exchange. There is also a cap on the number of shareholder nominees that must be included (the greater of 1 or 25% of the entire board), with preference given to the nominating shareholder holding the greatest number of company securities.
Nominations will be submitted on a new Schedule 14N which requires certain disclosures and certifications and which must be filed with the SEC and submitted the company. The final rules also establish a process by which a company may seek to exclude a nominee or statement in support of a nominee if not all eligibility, procedural and substantive requirements are met.
The final rules also limit companies’ ability to exclude shareholder proposals relating to (1) the nomination or election of directors or (2) any procedures or disclosures related to such nomination or election, including those required by the company’s governing documents.
For more information on the final rules and please see our recently published Advisory on this topic.
- Partner
Mark Reuter advocates for business clients in transactions, proceedings and conflicts regulated by federal and state securities laws and stock exchange rules. A partner in the firm’s Business Representation & Transaction ...
Topics/Tags
Select- Securities Law
- SEC
- Securities Regulation
- IRS
- Tax Planning
- Corporate Transparency Act
- Corporate Law
- Taxation
- Nasdaq
- Coronavirus
- Clawback Rules
- SEC Enforcement
- Cybersecurity and Privacy Law
- Dodd-Frank
- Mergers & Acquisitions
- Paycheck Protection Program
- Economic Sanctions
- Ohio LLC Act
- Corporate Tax
- JOBS Act
- FAST Act
- Corporate Governance
- Consumer Protection Act
- Proxy Access Rules
- Securities Litigation
- Crowdfunding
- Cybersecurity Regulation
- Cryptocurrency
- Conflict Minerals
- Hedging
- Real Estate Law
- Emerging Growth Companies
- Investors
- Pay Ratio Disclosure
- Private Offerings
- Whistleblower
- Intellectual Property
- Technology
- LIBOR
- Opportunity Zone
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Executive Compensation
- Health Care Act
- Online Trading Platforms
- IPO
- Registration Statement
- Wall Street Reform
- Annual Reports
- Family-Controlled Entities
- Gift and Estate Transfers
- Ohio Foreclosure Reform
- Director Compensation
- Board of Directors
- Director Independence
- Total Shareholder Return
- Cyber Insurance
- Data Breach
- Lenders
- Receivership Statute
- Regulation A
- Regulation D
- Compensation Committee Certification
- CDEs
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- Government Shutdown
- New Markets Tax Credit
- NMTC
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Marketing
- Benefits
- Healthcare Reform
- Litigation
- Public Company Transition Rules
- Tax Credit
- Employment Incentives
- HIRE Act
- Social Security Tax
Recent Posts
- SEC Wins ‘Shadow Insider Trading’ Trial
- SEC Voluntarily Stays Climate Rules
- New SEC Climate Disclosure Rules – Temporarily Stayed
- Corporate Transparency Act Ruled Unconstitutional
- SEC Climate Rule Vote Scheduled for March 6, 2024
- Limited Partners’ Tax Savings from Self-Employment Taxes are under Scrutiny
- FinCEN Extends the Corporate Transparency Act Reporting Deadline for Newly Created Entities
- SEC Postpones Share Repurchase Modernization Disclosure Rules
- Effective Date of SEC Clawback Rule Finally In Sight
- SEC Sued Over Newly Adopted Share Repurchase Rules