ANALYSIS: Shutdown & New Legal Bulletin Shape 2019 Proxy Season

The 2019 proxy season is well underway, and it will be a memorable one for many reasons. Initially, the government shutdown stalled the staff’s review process by closing the Division of Corporation Finance for most of January, thereby putting some issuers at risk of acting on proxy matters without definitive guidance. Issuers must also deal with a new staff legal bulletin that adds complexity, requiring board input on two common exclusionary bases. Staff Legal Bulletin 14J, concerns the Rule 14a-8(i)(5) “economic relevance” and the Rule 14a-8(i)(7) “ordinary business” exceptions. The staff will expect issuers with a year’s experience with ...