No. of Recommendations: 1
https://www.reuters.com/legal/government/trumps-se...A new federal approach giving U.S. companies more say over which proposals shareholders can vote on at their annual meetings is creating regulatory uncertainty and leading to litigation, activists said.
The U.S. Securities and Exchange Commission in November changed its traditional process of having staff sign off before a company rejected votes on shareholder proposals. Instead it gave executives more discretion to pick which resolutions would appear on their proxy statements, the mandated document issued before shareholder meetings.
The change has prompted at least three investor lawsuits - against AT&T (T.N), opens new tab, Axon Enterprises (AXON.O), opens new tab and PepsiCo (PEP.O), opens new tab - and potentially more to follow. By stepping back, the SEC injected uncertainty into the engagement process, said Giovanna Eichner, shareholder advocate at Green Century Capital Management, a climate-focused Boston asset manager.
"More than anything, this lack of structure and rules is actually just leaving everyone unsure about the best way to move forward," Eichner said.
An SEC spokesman declined to comment. A person familiar with the agency's thinking said in November the change was driven partly to save staff time.
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