Amendments to SEC Rule 14a-8 Allowing Shareholder Proposals for Proxy Access Regimes to Come into Effect

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On September 6, 2011, the Securities and Exchange Commission confirmed that it would not seek rehearing or Supreme Court review of the decision by the U.S. Court of Appeals in Washington, D.C. partially vacating the SEC’s proxy access rules. (Click here for our blog reporting on the D.C. Circuit’s decision.) Chairman Mary L. Schapiro issued a statement indicating her continuing interest in “finding a way to make it easier for shareholders to nominate candidates to corporate boards” but suggesting no immediate SEC plans to propose new proxy access rules.

Incumbent boards, management teams and their lawyers should not celebrate too soon. While the SEC will not challenge the Court’s decision vacating SEC rules that would have given shareholders access to nominating directors, the SEC did not take action to modify the amendments to Rule 14a-8 that will, upon final certification of the D.C. Circuit’s opinion, go into effect and permit shareholder proposals relating to proxy access regimes. Accordingly, public companies may face shareholder proposals relating to proxy access regimes beginning with the 2012 proxy season.

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