The SEC has proposed to rescind in its entirety Rule 14a-8 — the long-standing federal rule that requires public companies to include eligible shareholder proposals in their proxy materials. The SEC contends that Rule 14a-8 exceeds the Commission’s statutory authority and that the rescission of the rule would leave determinations about the role of shareholder proposals to state law and company governing documents.
In addition, the SEC proposes to amend Rule 14a-4(c), which would expand companies’ discretionary voting authority over shareholder proposals submitted outside the Rule 14a-8 process, subject to certain disclosure and opt-out requirements. Comments are due 60 days after publication in the Federal Register.