Hoping to put an end to the efforts by certain executives to frustrate the ability of shareowners to submit proposals, I joined with John Chevedden and Glyn Holton in providing written advice to Meredith Cross, Director Division of Corporation Finance at the SEC, on a proposed staff legal bulletin interpreting Rule 14a-8(b)(2).
Our letter explains the confused decision in the Apache vs. Chevedden lawsuit and discusses how that should be addressed in any template providing instructions on how to document ownership when filing shareowner resolutions. We also discuss increasingly common efforts to frustrate shareowner proposals based on the timing with which brokers or banks must document their eligibility.
Although an increasing number of proposals have been omitted on the grounds that investors failed to provide sufficient evidence of eligibility, in the vast majority of these cases there is little question that proponents actually did own qualifying shares. Their proposals were thrown out on technicalities. We hope that an SEC Bulletin will clarify the requirements, both for shareowners and issuers, so that we can all spend less time on procedural items that were never intended to present a barrier.