On November 13, Inherent Group joined with other investors representing nearly $570 billion of assets under management in signing an open letter to Mr. Jay Clayton, Chairman of the Securities and Exchange Commission, urging the SEC to maintain Rule 14a-8 as is. Under Rule 14a-8, a company is required to include shareholder proposals from eligible shareholders in its proxy materials unless the proposals do not meet the requirements of the rule or are subject to exclusion for other reasons set forth in the rule.
The SEC is considering whether to amend the rule to make it more difficult to submit shareholder proposals. The letter lays out a number of reasons why the rule does not require amendment at this time, including that it provides a valuable channel for shareholders of all sizes to submit proposals, that the rule already limits proposals from being resubmitted too easily, and that, contrary to the claims of some of the rule’s critics, it is not the cause of the reduction in the number of publicly traded companies.