UPDATE: Investors Overwhelmingly Oppose SEC’s Move to Restrict Shareholder Rights (read more)
IEN calls for investors to submit a comment letter to oppose two proposals issued by the Securities and Exchange Commission (SEC) that would limit shareholders’ ability to file resolutions at the annual meetings of publicly traded companies. Under the existing rule, the minimum stock ownership necessary to file a resolution at a corporation’s annual meeting is $2,000, which must be held for at least one year. The SEC is proposing instead that shareholders would have to own $25,000 of the target company’s stock for at least one year or $15,000 for at least two years. Smaller shareholders who own at least $2,000 but less than $15,000 worth of the company’s stock would have to wait three years to file a resolution.
The SEC also proposes to change how much support a resolution must win—measured by the percentage of the shares voted—in order to be resubmitted in subsequent years. The proposal changes these thresholds from 3 percent (first year), 6 percent (second year) and 10 percent (third and subsequent years) to 5 percent, 15 percent and 25 percent Moreover, proposals that win more than 25 percent (but less than 50 percent) support may be excluded in a subsequent year if the support drops by 10 percent from the previous year’s level.
Please act now to protect your shareholder rights as investors. The SEC is currently accepting comments on the proposed rules. Anyone can submit a comment. Submitted comments are public and posted on the SEC website under the rulemaking comment file.
For more information, please read through USSIF's Shareholder Rights Rulemaking Toolkit.
Submit a letter
1. Get your institutional stakeholders on board to submit comments to SEC and learn more about the proposed changes
Read through the talking points on the the proposed rule changes put together by USSIF
USSIF, the Interfaith Center on Corporate Responsibility (ICCR) and The Shareholder Rights Group launched the Investor Rights Forum (www.InvestorRightsForum.com), a website to share data and research supporting the shareholder process. You can read more about the SEC proposed changes and find more talking points for your comment letter on their website.
Skim the resources available on ICCR's page
2. Use a template to draft a letter
3. Send comment letters to:
- Write to: Vanessa A. Countryman, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090, with reference to File No. S7-23-19
- OR Email: [email protected], subject line copying the five Commissioners.
- OR File a Comment Online: Use the Commission’s Internet comment form
** All submissions should refer to File Number S7-23-19 for the Shareholder Proposal rule. For the Proxy Advisor rule use File Number S7-22-19. This file number should be included on the subject line if email is used. You only need to file with one method.
Members of Congress
Take the same letter and send it to your Congressional representatives. If you happen to have someone who represents you on the Senate Banking Committee or the House Financial Services, please make sure to share the letter with them.
Sign on to existing letters
- IEN (if you are a network member and would like to sign on, contact [email protected])
Spread the #NoGoodReason
SEC hasn’t really provided a good reason for why the prior rule hasn’t been working and they've only done limited cost/benefit analysis to justify the new proposed changes
- For students - Check out IEN's Student Coalition for Corporate Responsibility where students from around the country coordinate shareholder engagement initiatives.
- SEC Proposed Rule on Rule 14a-8
- SEC Press Release and Fact Sheet
- Commissioner Rob Jackson Statement
- Commissioner Jackson Voting Data Research
- Commissioner Allison Lee Statement
- US SIF Website and their Shareholder Rights Rulemaking Toolkit
- Investors Rights Forum (and their Frequently Asked Questions page)
- Myths/Reality Fact Sheet (Shareholder Rights Group & ICCR)
- CII Fact Sheet on Proxy Advisory Firms and Shareholder Proposals
- US SIF's Op-Ed on Proposed Changes