Shareholder pitch is a form of shareholder operations where shareholders request a big change in a company’s corporate by-law or packages. These proposals can address a wide range of issues, which includes management settlement, shareholder voting rights, social or environmental issues, and non-profit contributions.

Commonly, companies receive a large amount of shareholder proposal requests by different advocates each web proxy season and sometimes exclude plans that do not meet specific eligibility or procedural requirements. These criteria involve whether a shareholder proposal is based on an “ordinary business” basis (Rule 14a-8(i)(7)), a “economic relevance” basis (Rule 14a-8(i)(5)), or maybe a “micromanagement” basis (Rule 14a-8(i)(7)).

The number of shareholder proposals ruled out from a provider’s proxy terms varies significantly from one proxy season to the next, and the benefits of the Staff’s no-action words can vary too. The Staff’s recent changes to its meaning of the angles for exemption under Guideline 14a-8, mainly because outlined in SLB 14L, create further uncertainty which will have to be taken into consideration in business no-action tactics and diamond with shareholder proponents. The SEC’s suggested amendments might largely go back to the primary standard for identifying whether a pitch is excludable under Rules 14a-8(i)(7) and Rule 14a-8(i)(5), allowing firms to rule out proposals by using an “ordinary business” basis only if all of the important elements of a proposal are generally implemented. This amendment would have a practical influence on the number of proposals that are posted and built into companies’ proxy statements. It also could have a fiscal effect on the expenses associated with eliminating shareholder proposals.