ANALYSIS: Proxy Access Bylaws Leads List of Requests for SEC No-Action Letter Relief

As companies gear up for the 2017 proxy season, let’s take a look back at the no-action requests the SEC received this year from companies seeking to exclude shareholder resolutions from their proxies.

The SEC has received 231 of these no-action requests, according to Bloomberg Law data. Of these, the top five proposal topics broke down like this:

—Proxy Access Bylaws (54)

—Environmental Issues (36)

—Human Rights/Social Issues (32)

—Executive Compensation (18)

—Risk Management (18)

It’s no surprise, of course, that proxy access led the pack this past season. Will that trend continue this year? It seems likely.

The SEC staff granted relief for a majority of the 54 proxy access no-action requests based on 1934 Securities Exchange Act Rule 14a-8(i)(10), which allows companies to omit shareholder proposals that have been substantially implemented. However, in July, the staff didn’t agree that H&R Block Inc. could use the rule to exclude a proxy access proposal from James McRitchie and Myra Young.

Bolstered by the H&R Block development, this season shareholder proponents likely will focus on eliminating company requirements that cap the number of shareholders that can be aggregated to use proxy access as well as limits on the percentage of the board that can be replaced via proxy access.