No-Action Letter Tracking Update 2/10/14

March 14, 2014

Practical Law logo newA recent stampede of DEF-14As signals the start of annual meeting season and the end of shareholder proposal wrangling. But, before the 2013-2014 proxy season heads for the last round-up the team behind the new Business Law Center on WestlawNext presents this fourth in a series of posts examining the ragged edge of shareholder proposal-land:  no-action letter requests to the SEC.

See more at: http://blog.legalsolutions.thomsonreuters.com/large-law/action-letter-requests-sec/#sthash.svzQYVd9.dpuf

No-Action Letter Tracker: February 10, 2014:

2013-2014 Season (as of 2/10/14) 2012-2013 Season (as of 2/10/13) 2011-2012 Season (as of 2/10/12)
1. Registrants Submitting the Most No-Action Requests
Dominion Resources 10 General Electric 11 General Electric 10
JPMorgan Chase 10 Dominion Resources 8 ExxonMobil 8
Verizon 9 First Energy / Verizon 7 AT&T / Deere / JPMorgan 6
General Electric 8 AT&T / B of A / Comcast 6
2. Proponents Most Frequently Cited in No-Action Letters
J. Chevedden & collaborators 87 J. Chevedden & collaborators 61 J Chevedden 40
Qube Inv. Mgmt 19 Unified Bro. of Carpenters 12 W & K Steiner 26
National Ctr. for Public Policy Research 10 AFL-CIO 9 United Bro. Carpenters 14
Investor Voice 9 AFSCME / NY Retirement 9 NYS Ret. / NYC Ret. / AFL-CIO 10
3. Number of Letters by Proponent Type
Individuals 143 Individuals 134 Individuals 142
Activist Funds 48 Labor & Pension Funds 75 Labor & Pension Funds 72
Labor & Pension Funds 34 Activist Funds 27 Activist Funds 30
Public Policy Orgs 21 Religious Organizations 23 Religious Organizations 19
4. Most Common Proposal Subjects
Executive Compensation 41 Executive Compensation 60 Environmental Matters 35
Environmental Matters 31 Environmental Matters 41 Executive Compensation 34
Independent Board Chair 22 Political Contributions 31 Political Contributions 31
Political Contributions 20 Independent Chair 23 Special Meeting Power 26
5. Totals
No-Action Requests 266 No-Action Requests 282 No-Action Requests 283
Number of Registrants 149 Number of Registrants 160 Number of Registrants 185
Number of Proponents 104 Number of Proponents 132 Number of Proponents 117

Resolved Letters

149 letters resolved: 37 withdrawn, 112 received an SEC ruling.

Ruling breakdown:

SEC concurred with registrant (proposal is OUT): 78 – 70%

SEC was unable to concur with registrant (proposal is IN): 34 – 30%

Most-cited grounds for excluding proposals:

Proponent failed to prove share ownership: 24 – 21%

Proposal applies to ordinary business operations: 14 – 13%

Proposal is vague or misleading: 9 – 8%

Proposal conflicts with a management proposal: 8 – 7%

Guest No-Action Letter Analysis from Practical Law

This month we’re delighted to supplement our no-action letter tracker with the following related material from Practical Law:

  • An analysis of the recent decision of the US District Court for the Eastern District of Missouri in Express Scripts v. Chevedden, excluding a stockholder proposal on the basis of material misstatements, and
  • Rule 14a-8 Shareholder Proposal Process Flowchartprepared by Jeffrey L. Kochian, Jeffrey B. Werbitt and William K. Wetmore of Akin Gump Strauss Hauer & Feld LLP.

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