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SEC Commissioner Crenshaw on Shareholder Proposals under Exchange Act Rule 14a-8

Today [September 23] the majority of the Commission is approving amendments to the procedures governing shareholder proposals. The amendments are described as a “modernization,”[1] designed to reduce costs for corporations. Even if I agreed that was necessary, I cannot agree with the method.

Before today, a shareholder needed to hold only $2,000 worth of a company’s securities for one year in order to submit a proposal for voting. This threshold allowed a broad array of investors to “speak” with a company and its shareholders. After today’s change, shareholders must own $25,000 worth of securities to have that same say.

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