Simpson Thacher Discusses SEC Clarifications of Shareholder Proposal Issues

On October 23, 2018, the Division of Corporation Finance of the Securities and Exchange Commission (the SEC) issued new Staff Legal Bulletin 14J[1], following up on previous bulletins clarifying issues arising under Exchange Act Rule 14a-8. The new bulletin addresses the Division’s views on:

  • Board of directors analyses provided in no-action requests that seek to rely on the “economic relevance” exception or the “ordinary business” exception as a basis to exclude shareholder proposals from a company’s proxy materials;
  • the scope and application of micromanagement as a basis to exclude a proposal under the “ordinary business” exception; and
  • the

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