Glass Lewis recently posted its comprehensive 2020 voting guidelines, which are summarized on the first page of the 2020 voting guidelines as well as on the Glass Lewis blog. Among other things, the 2020 voting guidelines update Glass Lewis’ voting guidance regarding excluded shareholder proposals. The updates are in response to the September 2019 guidance by the Staff of the Division of Corporation Finance (the Staff) regarding potential oral rather than written responses to 14a-8 no-action letter requests, as further outlined in recent our blog post.
As a general matter, Glass Lewis believes companies should only exclude a shareholder proposal when the Staff has explicitly concurred with a company’s argument for the exclusion of such shareholder proposal.
Staff Declines to Articulate a View on the Exclusion of a Shareholder Proposal
In instances where the Staff has declined to provide a view on whether the shareholder proposal is ripe for exclusion, Glass Lewis believes such a shareholder proposal should be included in the company’s proxy statement. In the event a company excludes such a shareholder proposal from its proxy statement, Glass Lewis will likely recommend that shareholders vote against the members of the company’s governance committee.
Staff Provides Affirmative Verbal Response Regarding the Exclusion of a Shareholder Proposal
In instances where the Staff elects to provide a verbal response permitting the exclusion of a shareholder proposal, Glass Lewis expects the company to provide some form of disclosure concerning the no-action relief provided by the Staff. In situations where a company excludes a proposal but fails to provide disclosure regarding the basis for the exclusion (i.e., receipt of verbal concurrence from the Staff), Glass Lewis will generally recommend shareholders vote against the members of the company’s governance committee.
Stay tuned for more developments in this area heading into the 2020 proxy season.
If you have any questions about this or other issues related to the no-action process, please contact any member of our Corporate & Securities Practice for more information.
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