Contesting Proposals at the SEC
All resolutions must conform to the Shareholder Proposal Rule of the Securities and Exchange Act of 1934, which sets procedural as well as substantive standards for admissibility. When a company believes a proposal does not meet these standards, it informs the SEC of its intention to omit the proposal and cites specific provisions of the rule. SEC staff attorneys in the Division of Corporation Finance consider company arguments and any countervailing responses from the proponents before issuing a “no-action” letter. These letters indicate the SEC will take no action if the company leaves the proposal out of the proxy statement, or say the staff does not agree with the company’s arguments and thinks the proposal must be included. Decisions can be appealed to the full commission and also challenged in the courts, but generally the staff decision is not contested. Both challenges and decisions since 2007 are available on the SEC website; earlier correspondence is not available online.