On October 22, 2015, the staff of the US Securities and Exchange Commission’s Division of Corporation Finance issued Staff Legal Bulletin No. 14H addressing the scope and application of the grounds for exclusion of shareholder proposals from company proxy statements pursuant to Rule 14a-8 under the Securities Exchange Act of 1934. This Staff Legal Bulletin provides guidance on when a shareholder proposal directly conflicts with one of the company's own proposals under Rule 14a-8(i)(9). It also affirms the Staff’s existing position on the issue of when the significant policy exception to the ordinary business exclusion under Rule 14a-8(i)(7) applies.
We review the two interpretations and offer practical considerations for companies that receive shareholder proposals.