Heightened Eligibility Thresholds for Shareholder Proposals: Modernization or Voter Suppression?

In September 2020, the Securities and Exchange Commission amended Rule 14a-8 of the Securities Exchange Act to increase the eligibility requirements for a shareholder to submit proposals.[1] Rule 14a-8, also called the shareholder proposal rule, governs when a company must include a shareholder proposal in its proxy statement.[2] Passed by a 3-2 vote, the amendments have led to contentious debates about their potential impact on corporate governance.

Recent Amendments

Among other things,[3] the September 2020 amendments make the following significant changes to the shareholder proposal process:

First, the SEC increases the ownership threshold for initial inclusion of … Read more