The SEC granted Textron (TXT) no-action relief on March 7, allowing them to drop Ken Steiner’s proxy access proposal based on their decision that paragraphs 1-5 and 7 of the USPX proxy access template deal with “the inclusion of shareholder nominations for director in Textron’s proxy materials” and that paragraph 6 contains “a proposal relating to events that would not be considered a change in control.” So, no-action relief is granted based on staff’s interpretation of Rule 14a-8(c).
Of course, this was always a possibility. We hoped staff of the SEC would see the section limiting the definition of “change in control” as an integral part of the proxy access proposal. See Glyn Holton’s arguments in Companies Lawyer Up Over Proxy Access – Part 1: Multiple Proposals.
Although this doesn’t mean all the USPX proposals will be knocked out this season (much depends on if and how issuers raised this concern), it does look like we will need to revise the template for next season.
Score one for an entrenched board at Textron. Last year, 5 out of 12 directors received a negative vote of at least 17%, two of them more than 30%. Will it be higher this year? I can’t imagine shareowners being happy about not being able to vote on proxy access but, I suppose, most will never know they almost had that chance.