So far this year NLPC has submitted a few shareholder proposals that seek to preserve basic stock ownership thresholds that have been embedded in a Securities and Exchange Commission rule, in order for a proponent to be eligible to submit a proposal at a company for consideration at its annual meeting.
Earlier this month the SEC formally proposed to eliminate that standard, known as Rule 14a-8, adopted under the Securities Exchange Act. Chairman Paul Atkins had signaled his intent to rescind the rule for almost a year.
Understanding that that’s where shareholder proposal regulation was headed, NLPC submitted proposals asking companies to establish a policy that would continue to allow proposals that meet minimal stock ownership standards of $2,000 for three years, $15,000 for two years, or $25,000 for one year. The first such proposal that will reach a shareholder vote is one NLPC has on the proxy statement at Procter & Gamble, whose meeting is scheduled for October 13.
Another company that received our proposal was Microsoft. However, after negotiations over the summer, NLPC withdrew the proposal in an agreement first reported by Reuters. From the article:
Microsoft will consider shareholder proposals at its annual meetings through next year, at the request of an activist looking to preserve investor rights as they come under pressure from a contentious U.S. Securities and Exchange Commission rule change proposed last week.
Under an agreement with conservative activist Paul Chesser, seen by Reuters, Microsoft will continue to apply existing thresholds for investors to submit resolutions for a vote, even as the SEC considers changes that critics say would sideline individual investors, religious groups, unions and others who have had a say through the shareholder proposal process for decades.
The arrangement runs through Microsoft’s next annual meeting in 2027. Chesser told Reuters he hopes other companies follow the same approach, so that small investors keep a voice.
“Microsoft put in writing that the smallest long-term owners of the company will still have a way to be heard next year, no matter what the SEC does,” said Chesser, director [of the Corporate Integrity Project] at the National Legal and Policy Center. “Every other company that claims to value its shareholders should be asked why it won’t do the same,” he said.
Read the full story at Reuters or where its wire service subscribers have published it.
