Last week, the Center joined with other business groups in submitting a rulemaking petition to the SEC urging the agency to rethink the levels of support shareholder proponents must receive to resubmit shareholder proposals to companies. According to the Center's shareholder proposal data for S&P 500 companies, nearly 44% of the 358 shareholder proposals offered at S&P 500 companies in 2017 were repeat proposals also offered at the same company in 2016, and not a single of those proposals achieved majority support. The letter notes "Instead of highlighting urgent matters that could further shareholder interests, many proposals are dominated by subject matters most investors deem immaterial to their decision-making, including issues that are focused on advancing a social or political agenda." Further, the inclusion of proposals which are rejected by a supermajority of shareholders costs companies and shareholders time and money and add to already lengthy proxy statements. Current SEC rules permit shareholder proponents to resubmit the same proposal so long as the proposal achieves certain measures of shareholder support. Below are the current measures, followed by our proposed changes:
- If voted on once in the last five years - 3% - Proposed to change to 6%;
- If voted on twice in the last five years - 6% - Proposed to change to 15%; and
- If voted on three or more times in the last five years - 10% - Proposed to change to 30%;.