45052 Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 

38See 15 U.S.C. 57a(i)(2)(A); 16 CFR 1.18(c). 

XVI. Communications by Outside 

Parties to the Commissioners or Their 

Advisors 

Pursuant to FTC Rule 1.18(c)(1), the 

Commission has determined that 

communications with respect to the 

merits of this proceeding from any 

outside party to any Commissioner or 

Commissioner’s advisor shall be subject 

to the following treatment. Written 

communications and summaries or 

transcripts of oral communications shall 

be placed on the rulemaking record if 

the communication is received before 

the end of the comment period. They 

shall be placed on the public record if 

the communication is received later. 

Unless the outside party making an oral 

communication is a member of 

Congress, such communications are 

permitted only if advance notice is 

published in the Weekly Calendar and 

Notice of ‘‘Sunshine’’ Meetings.38

List of Subjects in 16 CFR Part 432 

Amplifiers, Home entertainment 

products, Trade practices. 

For the reasons stated above, the 

Commission proposes to amend part 

432 of title 16 of the Code of Federal 

Regulations as follows: 

PART 432—POWER OUTPUT CLAIMS 

FOR AMPLIFIERS UTILIZED IN HOME 

ENTERTAINMENT PRODUCTS 

■ 1. The authority citation for part 432 

continues to read: 

Authority: 38 Stat. 717, as amended; (15 

U.S.C. 41–58). 

■ 2. Revise § 432.2 to read as follows: 

§ 432.2 Required disclosures. 

Whenever any direct or indirect 

representation is made of the power 

output, power band or power frequency 

response, or distortion characteristics of 

sound power amplification equipment, 

the following disclosure shall be made 

clearly, conspicuously, and more 

prominently than any other 

representations or disclosures permitted 

under this part: The manufacturer’s 

rated minimum sine wave continuous 

average power output, in watts, per 

channel (if the equipment is designed to 

amplify two or more channels 

simultaneously) at an impedance of 8 

ohms, measured with all associated 

channels fully driven to rated per 

channel power. Provided, however, 

when measuring maximum per channel 

output of self-powered combination 

speaker systems that employ two or 

more amplifiers dedicated to different 

portions of the audio frequency 

spectrum, such as those incorporated 

into combination subwoofer-satellite 

speaker systems, only those channels 

dedicated to the same audio frequency 

spectrum should be considered 

associated channels that need be fully 

driven simultaneously to rated per 

channel power. 

■ 3. Revise § 432.3(e) to read as follows: 

§ 432.3 Standard test conditions. 

* * * * * 

(e) Rated power shall be obtainable at 

all frequencies within the rated power 

band of 20 Hz to 20 kHz without 

exceeding 0.1% of total harmonic 

distortion after input signals at said 

frequencies have been continuously 

applied at full rated power for not less 

than five (5) minutes at the amplifier’s 

auxiliary input, or if not provided, at the 

phono input. Provided, however, that 

for amplifiers utilized as a component 

in a self-powered subwoofer in a selfpowered subwoofer-satellite speaker 

system that employs two or more 

amplifiers dedicated to different 

portions of the audio frequency 

spectrum, the rated power shall be 

obtainable at all frequencies within the 

subwoofer amplifier’s intended 

operating bandwidth without exceeding 

0.1% of total harmonic distortion after 

input signals at said frequencies have 

been continuously applied at full rated 

power for not less than five (5) minutes 

at the amplifier’s auxiliary input, or if 

not provided, at the phono input. 

* * * * * 

By direction of the Commission. 

April J. Tabor, 

Secretary. 

[FR Doc. 2022–16071 Filed 7–26–22; 8:45 am] 

BILLING CODE 6750–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 240 

[Release No. 34–95267; IC–34647; File No. 

S7–20–22] 

RIN 3235–AM91 

Substantial Implementation, 

Duplication, and Resubmission of 

Shareholder Proposals Under 

Exchange Act Rule 14a–8 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule. 

SUMMARY: The Securities and Exchange 

Commission (‘‘Commission’’) is 

proposing to update certain substantive 

bases for exclusion of shareholder 

proposals under the Commission’s 

shareholder proposal rule. The 

proposed amendments would amend 

the substantial implementation 

exclusion to specify that a proposal may 

be excluded if the company has already 

implemented the essential elements of 

the proposal. We also propose to specify 

when a proposal substantially 

duplicates another proposal for 

purposes of the duplication exclusion. 

In addition, we propose to amend the 

resubmission exclusion to provide that 

a proposal constitutes a resubmission if 

it substantially duplicates another 

proposal. Under the proposed 

amendments, for purposes of both the 

duplication exclusion and the 

resubmission exclusion, a proposal 

would substantially duplicate another 

proposal if it addresses the same subject 

matter and seeks the same objective by 

the same means. 

DATES: Comments should be received on 

or before September 12, 2022. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/submitcomments.htm); or 

• Send an email to rule-comments@

sec.gov. Please include File Number S7– 

20–22 on the subject line. 

Paper Comments 

• Send paper comments to Vanessa 

A. Countryman, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number S7–20–22. This file number 

should be included on the subject line 

if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method of submission. The 

Commission will post all comments on 

the Commission’s website (https://

www.sec.gov/rules/proposed.shtml). 

Comments are also available for website 

viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street NE, Washington, DC 20549 

on official business days between the 

hours of 10 a.m. and 3 p.m. Operating 

conditions may limit access to the 

Commission’s Public Reference Room. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. 


jspears on DSK121TN23PROD with PROPOSALS
Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 45053 

1This generally includes issuers with a class of 

securities registered under Section 12 of the 

Exchange Act and issuers that are registered under 

the Investment Company Act of 1940 (‘‘Investment 

Company Act’’). Foreign private issuers are exempt 

from the federal proxy rules. See 17 CFR 240.3a12– 

3(b). In addition, debt securities registered under 

Section 12(b) are exempt from the federal proxy 

rules, with some exceptions. See 17 CFR 240.3a12– 

11(b). 

2 17 CFR 240.14a–8. Unless otherwise noted, 

references to ‘‘shareholder proposal,’’ ‘‘shareholder 

proposals,’’ ‘‘proposal,’’ or ‘‘proposals’’ refer to 

submissions made in reliance on Rule 14a–8. 

3See, e.g., Procedural Requirements and 

Resubmission Thresholds Under Exchange Act Rule 

14a–8, Release No. 34–87458 (Nov. 5, 2019) [84 FR 

66458 (Dec. 4, 2019)] (‘‘2019 Proposing Release’’) 

(‘‘The rule . . . facilitates shareholders’ traditional 

ability under state law to present their own 

proposals for consideration at a company’s annual 

or special meeting, and it facilitates the ability of 

all shareholders to consider and vote on such 

proposals.’’); Alan Palmiter & Frank Partnoy, 

Corporations: A Contemporary Approach 482 (1st 

ed. 2010) (‘‘The shareholder proposal rule is a 

federal mechanism to facilitate state-created 

shareholder voting rights’’). 

4 17 CFR 240.14a–8(j)(1). 

5See Statement of Informal Procedures for the 

Rendering of Staff Advice With Respect to 

Shareholder Proposals, Release No. 34–12599 (July 

7, 1976) [41 FR 29989 (July 20, 1976)] (‘‘Statement 

of Informal Procedures’’). 

6See id. No-action letters issued under Rule 14a– 

8 by the Divisions of Corporation Finance and 

Investment Management are available at https://

www.sec.gov/corpfin/shareholder-proposals-noaction and https://www.sec.gov/investment/ 

investment-management-no-action-letters, 

respectively. 

7See infra note 8. 

8See, e.g., Emiliano M. Catan & Marcel Kahan, 

The Never-Ending Quest for Shareholder Rights: 

Special Meetings and Written Consent, 99 B.U. L. 

Rev. 743 (2019), available at https://www.bu.edu/ 

bulawreview/files/2019/06/CATAN-KAHAN.pdf 

(discussing the impact of shareholder activists on 

the elimination of staggered boards and other 

governance matters); Yaron Nili & Kobi Kastiel, The 

Giant Shadow of Corporate Gadflies, 94 S. Cal. L. 

Rev. 569, 571–76 (2021), available at https://

www.sec.gov/comments/s7-23-19/s72319-6733874- 

207512.pdf (discussing the influence of corporate 

‘‘gadflies’’ over corporate governance practices); 

Kosmas Papadopoulos, ISS Analytics, The Long 

View: The Role of Shareholder Proposals in 

Shaping U.S. Corporate Governance (2000–2018), 

Harvard Law School Forum on Corporate 

Governance (Feb. 6, 2019), https://

corpgov.law.harvard.edu/2019/02/06/the-long-viewthe-role-of-shareholder-proposals-in-shaping-u-scorporate-governance-2000-2018/ (discussing the 

impact of shareholder proposals on corporate 

governance). 

Studies, memoranda, or other 

substantive items may be added by the 

Commission or staff to the comment file 

during this rulemaking. A notification of 

the inclusion in the comment file of any 

such materials will be made available 

on our website. To ensure direct 

electronic receipt of such notifications, 

sign up through the ‘‘Stay Connected’’ 

option at www.sec.gov to receive 

notifications by email. 

FOR FURTHER INFORMATION CONTACT: 

Kasey Robinson, Special Counsel, Office 

of Chief Counsel, at (202) 551–3500, 

Division of Corporation Finance, U.S. 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 20549. 

SUPPLEMENTARY INFORMATION: The 

Commission is proposing for public 

comment amendments to 17 CFR 

240.14a–8 (‘‘Rule 14a–8’’) under the 

Securities Exchange Act of 1934 [15 

U.S.C. 78a et seq.] (‘‘Exchange Act’’). 

Table of Contents 

I. Introduction 

II. Discussion of the Proposed Amendments 

A. Rule 14a–8(i)(10)—Substantial 

Implementation 

1. Background 

2. Proposed Amendment 

B. Rule 14a–8(i)(11)—Duplication 

1. Background 

2. Proposed Amendment 

C. Rule 14a–8(i)(12)—Resubmissions 

1. Background 

2. Proposed Amendment 

III. Economic Analysis 

A. Affected Parties 

B. Baseline 

1. Regulatory Framework 

2. Practices Related to Proposal 

Submissions 

C. Potential Costs and Benefits 

1. General Economic Considerations 

Relevant to Shareholder Proposals 

2. Rule 14a–8(i)(10)—Substantial 

Implementation 

3. Rule 14a–8(i)(11)—Duplication 

4. Rule 14a–8(i)(12)—Resubmissions 

D. Anticipated Effects on Efficiency, 

Competition, and Capital Formation 

E. Reasonable Alternatives 

1. Rule 14a–8(i)(10)—Substantial 

Implementation 

2. Rule 14a–8(i)(11)—Duplication 

3. Rule 14a–8(i)(12)—Resubmissions 

F. Request for Comment 

IV. Paperwork Reduction Act 

A. Summary of the Collection of 

Information 

B. Summary of the Proposed Amendments’ 

Effects on the Collection of Information 

C. Incremental and Aggregate Burden and 

Cost Estimates for the Proposed 

Amendments 

V. Small Business Regulatory Enforcement 

Fairness Act 

VI. Initial Regulatory Flexibility Act Analysis 

A. Reasons for, and Objectives of, the 

Proposed Action 

B. Legal Basis 

C. Small Entities Subject to the Proposed 

Rules 

D. Projected Reporting, Recordkeeping, and 

Other Compliance Requirements 

E. Duplicative, Overlapping, or Conflicting 

Federal Rules 

F. Significant Alternatives 

G. Request for Comment 

Statutory Authority and Text of Proposed 

Rule Amendments 

I. Introduction 

Exchange Act Rule 14a–8 requires 

companies that are subject to the federal 

proxy rules 1 to include shareholder 

proposals in their proxy statements to 

shareholders, subject to certain 

procedural and substantive 

requirements.2 The rule is intended to 

facilitate shareholders’ right under state 

law to present their own proposals at a 

company’s meeting of shareholders and 

the ability of all shareholders to 

consider and vote on such proposals.3

Under Rule 14a–8, a company must 

include a shareholder’s proposal in the 

company’s proxy materials unless the 

proposal fails to satisfy any of several 

specified substantive requirements or 

the proposal or shareholder-proponent 

does not satisfy certain eligibility or 

procedural requirements. Companies 

and shareholder-proponents do not 

always agree on the application of these 

requirements. If a company intends to 

exclude a shareholder proposal from its 

proxy materials, it is required under 

Rule 14a–8(j)(1) to ‘‘file its reasons’’ for 

doing so with the Commission.4 These 

notifications are generally submitted in 

the form of no-action requests, with 

companies seeking the staff’s 

concurrence that they may exclude a 

shareholder proposal under one or more 

of the procedural or substantive bases 

under Rule 14a–8. For many years the 

staffs of the Division of Corporation 

Finance and the Division of Investment 

Management, as applicable, have 

engaged through the no-action letter 

process in the informal practice of 

expressing whether they would 

recommend enforcement action to the 

Commission if a company excludes a 

proposal from its proxy materials.5 The 

staff offers its views in this manner to 

assist companies and shareholderproponents in complying with the 

federal proxy rules.6

The shareholder proposal process has 

become a cornerstone of engagement 

between shareholders and company 

management.7 Shareholder proposals 

provide an important mechanism for 

investors to express their views, provide 

feedback to companies, exercise 

oversight of management, and raise 

important issues for the consideration of 

their fellow shareholders in the 

company’s proxy statement. Moreover, 

investor support for shareholder 

proposal campaigns over the years has 

helped to shape many current corporate 

practices and policies, such as annual 

director elections, majority vote 

standards for director elections, and 

proxy access rights for shareholders.8


jspears on DSK121TN23PROD with PROPOSALS
45054 Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 

9Release No. 34–3347 (Dec. 18, 1942) [7 FR 10655 

(Dec. 22, 1942)]. At the time, the rule did not set 

forth substantive bases for exclusion. It provided as 

follows: ‘‘In the event that a qualified security 

holder of the issuer has given the management 

reasonable notice that such security holder intends 

to present for action at a meeting of security holders 

of the issuer a proposal which is a proper subject 

for action by the security holders, the management 

shall set forth the proposal. . . .’’ 

10See Amendments To Rules On Shareholder 

Proposals, Release No. 34–40018 (May 21, 1998) [63 

FR 29106 (May 28, 1998)] (‘‘1998 Adopting 

Release’’) (noting that the Commission would 

‘‘continue to explore ways to improve the 

[shareholder proposal] process as opportunities 

present themselves’’). 

11Procedural Requirements and Resubmission 

Thresholds Under Exchange Act Rule 14a–8, 

Release No. 34–89964 (Sept. 23, 2020) [85 FR 70240 

(Nov. 4, 2020)] (‘‘2020 Adopting Release’’). 

12See Statement of Informal Procedures, supra 

note 5. 

13 17 CFR 240.14a–8(i)(7). 

14 In the 1998 Adopting Release, supra note 10, 

the Commission stated: ‘‘The policy underlying the 

ordinary business exclusion rests on two central 

considerations. The first relates to the subject 

matter of the proposal. . . . [P]roposals relating to 

[ordinary business] matters but focusing on 

sufficiently significant social policy issues . . . 

generally would not be considered to be excludable, 

because the proposals would transcend the day-today business matters and raise policy issues so 

significant that it would be appropriate for a 

shareholder vote. . . . The second consideration 

relates to the degree to which the proposal seeks to 

‘micro-manage’ the company by probing too deeply 

into matters of a complex nature upon which 

shareholders, as a group, would not be in a position 

to make an informed judgment.’’ The Commission 

also clarified that specific methods, time-frames, or 

detail do not necessarily amount to 

micromanagement and are not dispositive of 

excludability. 

15Table 1 shows requests received by the 

Division of Corporation Finance and the Division of 

Investment Management from October 1 through 

June 30 of each time period shown. The percentages 

in parentheses in each column of the table represent 

percentages of the total number of no-action 

requests that assert Rule 14a–8(i)(10), Rule 14a– 

8(i)(11), and Rule 14a–8(i)(12), respectively (as 

noted in each respective ‘‘Number of Requests’’ 

row). 

Since Rule 14a–8 was adopted in 

1942,9 the Commission has amended 

the rule on numerous occasions, as 

necessary to improve the operation of 

the shareholder proposal process and to 

provide its views on the application of 

the rule’s procedural and substantive 

requirements.10 The most recent 

amendments to Rule 14a–8, adopted on 

September 23, 2020, relate to certain 

procedural requirements as well as the 

resubmission exclusion under Rule 14a– 

8(i)(12), as discussed below in Section 

II.C.1.11

The proposed amendments are 

intended to improve the shareholder 

proposal process based on modern 

developments and the staff’s 

observations. The amendments we 

propose to each of Rule 14a–8(i)(10), 

14a–8(i)(11), and 14a–8(i)(12) would 

facilitate shareholder suffrage and 

communication between shareholders 

and the companies they own, as well as 

among a company’s shareholders, on 

important issues. In this regard, the 

proposed amendments are intended to 

‘‘insure that public investors receive full 

and accurate information about all 

security holder proposals that are to, or 

should, be submitted to them for their 

action . . . [and] have . . . the 

opportunity to vote’’ on such 

proposals.12 The proposed amendments 

also would enhance the ability of 

shareholders to express diverse 

objectives and various ways to achieve 

those objectives through the shareholder 

proposal process. In addition, the 

proposed amendments would set forth a 

clearer framework for the application of 

certain of the rule’s substantive bases for 

the exclusion of proposals and should 

thereby provide greater certainty and 

transparency to shareholders and 

companies as they evaluate whether 

these bases would apply to particular 

proposals. 

We are proposing modifications to, 

and seeking public comment on, three 

of the rule’s substantive bases for 

exclusion: Rule 14a–8(i)(10), Rule 14a– 

8(i)(11), and Rule 14a–8(i)(12). In 

addition, while we do not propose to 

amend Rule 14a–8(i)(7),13 the ordinary 

business exclusion, at this time, we 

reaffirm the standards the Commission 

articulated in 1998 for determining 

whether a proposal relates to ordinary 

business for purposes of Rule 14a– 

8(i)(7).14

As shown in Table 1, the bases for 

exclusion in Rule 14a–8(i)(10), Rule 

14a–8(i)(11), and Rule 14a–8(i)(12) 

collectively represent a significant 

percentage of the no–action requests the 

staff has received under Rule 14a–8.15

TABLE 1 

2020–2021 

(Total: 266) 

2019–2020 

(Total: 238) 

2018–2019 

(Total: 226) 

Rule 14a–8(i)(10)—Substantial Implementation 

Number of Requests .............................................................................................................. 110 90 83 

Granted on (i)(10) ........................................................................................................... 36 (33%) 45 (50%) 37 (45%) 

Granted on Other Basis ................................................................................................. 10 (9%) 8 (9%) 6 (7%) 

Denied ............................................................................................................................ 31 (28%) 24 (27%) 21 (25%) 

Withdrawn ....................................................................................................................... 33 (30%) 13 (14%) 19 (23%) 

Rule 14a–8(i)(11)—Duplication 

Number of Requests .............................................................................................................. 12 9 16 

Granted on (i)(11) ........................................................................................................... 3 (25%) 4 (44%) 7 (44%) 

Granted on Other Basis ................................................................................................. 1 (8%) 0 6 (38%) 

Denied ............................................................................................................................ 5 (42%) 1 (11%) 2 (13%) 

Withdrawn ....................................................................................................................... 3 (25%) 4 (44%) 1 (6%) 

Rule 14a–8(i)(12)—Resubmissions 

Number of Requests .............................................................................................................. 2 3 1 

Granted on (i)(12) ........................................................................................................... 1 (50%) 0 1 (100%) 

Granted on Other Basis ................................................................................................. 1 (50%) 1 (33%) 0 

Denied ............................................................................................................................ 0 1 (33%) 0 

Withdrawn ....................................................................................................................... 0 1 (33%) 0 


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Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 45055 

16 17 CFR 240.14a–8(i)(10). 

17See Amendments to Rule 14a–8 Under the 

Securities Exchange Act of 1934 Relating to 

Proposals by Security Holders, Release No. 34– 

20091 (Aug. 16, 1983) [48 FR 38218 (Aug. 23, 1983)] 

(‘‘1983 Adopting Release’’). 

18 17 CFR 240.14a–8(i)(11). 

19See Adoption of Amendments Relating to 

Proposals by Security Holders, Release No. 34– 

12999 (Nov. 22, 1976) [41 FR 52994 (Dec. 3, 1976)] 

(‘‘1976 Adopting Release’’). 

20 17 CFR 240.14a–8(i)(12). 

21See 2020 Adopting Release, supra note 11. 

22See 1983 Adopting Release, supra note 17. 

23 17 CFR 240.14a–8(i)(10). 

24Proposals by Security Holders, Release No. 34– 

12598 (July 7, 1976) [41 FR 29982, at 29985 (July 

20, 1976)] (‘‘1976 Proposing Release’’). 

25At the time, the rule text provided for exclusion 

where ‘‘the proposal has been rendered moot.’’ 

26See 1983 Adopting Release, supra note 17. 

27 Id. 

28See Proposed Amendments to Rule 14a–8 

Under the Securities Exchange Act of 1934 Relating 

to Proposals by Security Holders, Release No. 34– 

19135 (Oct. 14, 1982) [47 FR 47420 (Oct. 26, 1982)], 

at 47429 (‘‘1982 Proposing Release’’). 

29See 1998 Adopting Release, supra note 10. 

30See Shareholder Approval of Executive 

Compensation and Golden Parachute 

Compensation, Release No. 34–63768 (Jan. 25, 

2011) [76 FR 6010 (Feb. 2, 2011)]. 

31See Texaco, Inc. (Mar. 28, 1991). 

32See, e.g., WD–40 Co. (Sept. 27, 2016) 

(concurring under Rule 14a–8(i)(10) in the 

Continued 

First, we propose to amend Rule 14a– 

8(i)(10), the substantial implementation 

exclusion, which allows companies to 

exclude a shareholder proposal that 

‘‘the company has already substantially 

implemented.’’ 16 This standard has 

remained substantively unchanged 

since 1983.17 We propose to amend this 

rule to specify that a proposal may be 

excluded if ‘‘the company has already 

implemented the essential elements of 

the proposal.’’ The proposed 

amendment would provide a clearer 

standard for exclusion and promote 

more consistent and predictable 

determinations regarding the exclusion 

of proposals under the rule. 

Second, we propose to amend Rule 

14a–8(i)(11), the duplication exclusion, 

which allows companies to exclude a 

shareholder proposal that ‘‘substantially 

duplicates another proposal previously 

submitted to the company by another 

proponent that will be included in the 

company’s proxy materials for the same 

meeting.’’ 18 The duplication exclusion 

has not been substantively updated by 

the Commission since its adoption in 

1976.19 The proposed amendment 

would specify that a proposal 

‘‘substantially duplicates’’ another 

proposal if it ‘‘addresses the same 

subject matter and seeks the same 

objective by the same means.’’ 

Third, we propose to amend Rule 

14a–8(i)(12), the resubmission 

exclusion, which allows companies to 

exclude a shareholder proposal that 

‘‘addresses substantially the same 

subject matter as a proposal, or 

proposals, previously included in the 

company’s proxy materials within the 

preceding five calendar years’’ if the 

matter was voted on at least once in the 

last three years and did not receive at 

least: 

• 5 percent of the votes cast if 

previously voted on once; 

• 15 percent of the votes cast if 

previously voted on twice; or 

• 25 percent of the votes cast if 

previously voted on three or more 

times.20

Although the resubmission thresholds 

themselves were reviewed and amended 

by the Commission in 2020,21 the 

‘‘substantially the same subject matter’’ 

test has been in place since 1983.22 We 

propose to amend the resubmission 

exclusion to provide that a resubmission 

is a shareholder proposal that 

‘‘substantially duplicates’’ a proposal 

previously included in a company’s 

proxy materials, which would replace 

the current ‘‘substantially the same 

subject matter’’ test. This proposed 

amendment would align the 

‘‘resubmission’’ standard with the 

‘‘duplication’’ standard under Rule 14a– 

8(i)(11), in consideration of the similar 

objectives of these exclusions. As noted 

above with respect to the proposed 

amendment to Rule 14a–8(i)(11), we 

also propose to specify for purposes of 

Rule 14a–8(i)(12) that a proposal 

‘‘substantially duplicates’’ another 

proposal if it ‘‘addresses the same 

subject matter and seeks the same 

objective by the same means.’’ 

We welcome feedback and encourage 

interested parties to submit comments 

on any or all aspects of the proposed 

amendments. When commenting, it 

would be most helpful if you include 

the reasoning behind your position or 

recommendation. 

II. Discussion of the Proposed 

Amendments 

A. Rule 14a–8(i)(10)—Substantial 

Implementation 

1. Background 

Rule 14a–8(i)(10), the substantial 

implementation exclusion, allows a 

company to exclude a shareholder 

proposal that ‘‘the company has already 

substantially implemented.’’ 23 The 

purpose of the exclusion is to ‘‘avoid the 

possibility of shareholders having to 

consider matters which have already 

been favorably acted upon by the 

management.’’ 24 During the 2021, 2020, 

and 2019 proxy seasons, the staff 

received 110, 90, and 83 no-action 

requests, respectively, asserting the 

substantial implementation exclusion. 

Of these, the staff concurred in the 

exclusion of 36, 45, and 37 of the 

requests, respectively, on the basis of 

the substantial implementation 

exclusion. 

Prior to 1983, Rule 14a–8(i)(10) did 

not include a concept of ‘‘substantial 

implementation,’’ and exclusion under 

the rule was permitted only in those 

cases in which a proposal had been 

fully effected.25 In 1983, however, the 

Commission announced an interpretive 

change to permit exclusion of proposals 

that had been ‘‘substantially 

implemented by the issuer.’’ 26 The 

Commission acknowledged that the 

interpretive position would ‘‘add more 

subjectivity to the application of the 

provision’’ but believed the change was 

necessary as the ‘‘previous formalistic 

application of this provision defeated its 

purpose,’’ 27 given that the exclusion 

was available only when a proposal had 

been fully effected—that is, when a 

company had taken all of the actions 

requested by the proposal.28 In 1998 the 

Commission adopted the current 

language of Rule 14a–8(i)(10) to reflect 

the interpretation it announced in 

1983.29 The Commission has not revised 

Rule 14a–8(i)(10) since that time, except 

to add a note to paragraph (i)(10) to 

clarify the status of shareholder 

proposals that seek an advisory 

shareholder vote on executive 

compensation or that relate to the 

frequency of shareholder votes 

approving executive compensation.30

Because of the fact-intensive nature of 

the rule, over the years the staff has 

applied various, but similar, interpretive 

frameworks to determine whether a 

shareholder proposal has been 

substantially implemented by a 

company. For instance, the staff has 

indicated that a ‘‘determination that the 

[c]ompany has substantially 

implemented the proposal depends 

upon whether [the company’s] 

particular policies, practices and 

procedures compare favorably with the 

guidelines of the proposal.’’ 31 The staff 

also has considered whether the 

company has addressed a proposal’s 

underlying concerns and whether the 

essential objectives of a proposal have 

been met. When considering whether a 

proposal has been substantially 

implemented, companies, shareholderproponents, and the staff sometimes 

divide a proposal into its elements and 

evaluate which of them have been 

implemented. However, a proposal may 

be viewed as substantially implemented 

even if a company has not implemented 

all of the proposal’s elements.32


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45056 Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 

company’s exclusion of a proposal requesting that 

the company adopt a proxy access bylaw provision 

and identifying certain ‘‘essential elements for 

substantial implementation’’ because the company 

represented that ‘‘the board has adopted a proxy 

access bylaw that addresses the proposal’s essential 

objective,’’ even though a number of the company’s 

provisions differed from the proposal’s terms); 

NVR, Inc. (Feb. 12, 2016, recons. granted Mar. 25, 

2016) (concurring, on reconsideration, under Rule 

14a–8(i)(10) in the exclusion of a proposal seeking 

four specific revisions to the company’s existing 

proxy access bylaw provision where the company 

amended the provision to reduce the minimum 

ownership threshold from 5 percent to 3 percent 

and increased the permissible recall period for 

loaned shares from three to five business days, but 

did not eliminate the 20-person limit on the number 

of shareholders that may aggregate their 

shareholdings to form a nominating group or 

eliminate the requirement for nominating 

shareholders to represent that they will continue to 

own the shares required to meet the minimum 

ownership threshold for at least one year following 

the meeting). 

33Compare Apple Inc. (Nov. 19, 2018) 

(concurring under Rule 14a–8(i)(10) in the 

exclusion of a proposal requesting that the company 

establish a board committee on international policy 

to oversee policies regarding matters specified in 

the proposal, where the company argued that its 

existing board committees include responsibility for 

the specified matters) and Verizon Communications 

Inc. (Feb. 19, 2019) (concurring under Rule 14a– 

8(i)(10) in the exclusion of a proposal requesting 

that the company establish a board committee on 

public policy and social responsibility to oversee 

policies regarding matters specified in the proposal, 

where the company argued that its existing board 

committees include responsibility for the specified 

matters) with Exxon Mobil Corp. (Apr. 2, 2019) (not 

concurring in the exclusion of a proposal requesting 

that the company establish a board committee on 

climate change, where the company argued that the 

board’s public issues and contributions committee 

substantially implemented the proposal under Rule 

14a–8(i)(10) because its responsibilities included 

oversight of climate change issues). 

34 1976 Proposing Release, supra note 24, at 

29985. 

35See, e.g., Letter to John Coates, Acting Director, 

Division of Corporation Finance, U.S. Securities 

and Exchange Commission, from Sanford Lewis, 

Director, Shareholder Rights Group, dated February 

4, 2021, available at https://www.corpgov.net/2021/ 

02/reform-no-action-process/ (‘‘February 4, 2021 

Letter’’); Letter to Allison Lee, Acting Chair, U.S. 

Securities and Exchange Commission, from Sanford 

Lewis, Director, Shareholder Rights Group, Mindy 

Lubber, Ceres, Lisa Woll, The Forum for 

Sustainable and Responsible Investment, and Josh 

Zinner, Interfaith Center on Corporate 

Responsibility, dated January 26, 2021, available at 

https://www.iccr.org/sites/default/files/resources_

attachments/chair_lee_letter_0.pdf (‘‘January 26, 

2021 Letter’’). 

36See, e.g., February 4, 2021 Letter, supra note 

35. 

37See 1998 Adopting Release, supra note 10. 

38See Sanford Lewis, Shareholder Rights Group, 

SEC Resets the Shareholder Proposal Process, 

Harvard Law School Forum on Corporate 

Governance (Dec. 23, 2021), https://

corpgov.law.harvard.edu/2021/12/23/sec-resets-theshareholder-proposal-process/; January 26, 2021 

Letter, supra note 35. See also Staff Legal Bulletin 

No. 14L, Section B.3 (Nov. 3, 2021). 

39Proponents sometimes attempt to identify the 

primary objectives, elements, or features of a 

proposal. We expect that the more objectives, 

elements, or features a proponent identifies, the less 

essential the staff would view each of them. 

40See, e.g., Oracle Corp. (Aug. 11, 2016). 

We continue to believe that it is 

appropriate under Rule 14a–8(i)(10) to 

apply a ‘‘substantial’’ implementation 

standard, rather than the ‘‘full’’ 

implementation standard that was in 

place prior to 1983. We recognize, 

however, that there are many potential 

interpretations of what a substantial 

implementation standard may require, 

on a spectrum from minimal 

implementation to all but full 

implementation. In view of the staff’s 

experience with the substantial 

implementation exclusion, we are 

concerned that the current rule may be 

difficult to apply in a consistent and 

predictable manner.33 Moreover, we 

believe that the language of the current 

rule is insufficiently focused on the 

specific actions requested by a 

proposal—i.e., its elements—and, thus, 

it may not serve the original purpose of 

the exclusion to avoid the consideration 

of proposals on which a company 

already has ‘‘favorably acted.’’ 34

Additionally, some observers have 

expressed concerns about variation and 

potential unpredictability in the 

operative principles guiding the staff’s 

interpretation of the substantial 

implementation exclusion.35 For 

example, with respect to shareholder 

proposals requesting a report, some 

have observed that the staff may find a 

proposal substantially implemented 

based on ‘‘voluminous but unresponsive 

reporting’’ that does not answer the core 

questions raised by the proposal.36

Some shareholders also have expressed 

concerns about the difficulty of 

‘‘threading the needle’’ when seeking to 

draft a proposal that does not ‘‘micromanage’’ the company under Rule 14a– 

8(i)(7) 37 but still provides sufficient 

specificity and direction to avoid 

exclusion as ‘‘substantially 

implemented’’ under Rule 14a–8(i)(10) 

when a company had not implemented 

its essential elements.38

2. Proposed Amendment 

In view of these considerations, we 

are proposing an amendment to Rule 

14a–8(i)(10) that would maintain a 

‘‘substantial’’ implementation standard 

and provide a clearer framework for its 

application. The proposed rule would 

state that a proposal may be excluded as 

substantially implemented ‘‘[i]f the 

company has already implemented the 

essential elements of the proposal.’’ 

Whether a proposal has been 

substantially implemented necessarily 

involves a factual determination to be 

made on a case-by-case basis. We 

believe that an analysis that focuses on 

the specific elements of a proposal 

would provide a reliable indication of 

whether the actions taken to implement 

a proposal are sufficiently responsive to 

the proposal such that it has been 

substantially implemented. 

Determining whether a proposal 

could be excluded under the proposed 

amendment would still require a degree 

of substantive analysis—a determination 

of which elements of the proposal are 

the ‘‘essential elements’’ and an analysis 

of whether those elements have been 

addressed. In determining the essential 

elements of a proposal, we anticipate 

that the degree of specificity of the 

proposal and of its stated primary 

objectives 39 would guide the analysis. 

The proposed amendment would permit 

a shareholder proposal to be excluded 

as substantially implemented only if the 

company has implemented all of its 

essential elements. 

Under the proposed amendment, a 

proposal need not be rendered entirely 

moot, or be fully implemented in 

exactly the way a proponent desires, in 

order to be excluded. A company may 

be permitted to exclude a proposal it 

has not implemented precisely as 

requested if the differences between the 

proposal and the company’s actions are 

not essential to the proposal. Where a 

proposal contains more than one 

element, every element of the proposal 

need not be implemented, although 

each essential element would need to be 

implemented. In instances where a 

proposal contains only one essential 

element, that essential element would 

need to be implemented in order to 

exclude the shareholder proposal under 

the proposed amendment. 

For example, the staff historically has 

concurred in the exclusion, under Rule 

14a–8(i)(10), of proposals seeking the 

adoption of a proxy access provision 

that allows an unlimited number of 

shareholders who collectively have 

owned 3 percent of the company’s 

outstanding common stock for 3 years to 

nominate up to 25 percent of the 

company’s directors, where the 

company had adopted a proxy access 

bylaw allowing a shareholder or group 

of up to 20 shareholders owning 3 

percent of its common stock 

continuously for 3 years to nominate up 

to 20 percent of the board.40 Under the 

proposed amendment, because the 

ability of an unlimited number of 

shareholders to aggregate their 

shareholdings to form a nominating 

group generally would be an essential 

element of the proposal, exclusion 

would not be appropriate. 

As another example, where a proposal 

calls for a company to issue a report 

about a particular topic, a company’s 


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41 17 CFR 240.14a–8(i)(11). 42See 1976 Adopting Release, supra note 19. 

Prior to the Commission’s formal adoption of the 

duplication exclusion in 1976, the exclusion 

‘‘existed . . . on an informal basis.’’ Id. 43See 1998 Adopting Release, supra note 10. 44See, e.g., Pacific Gas & Electric Co. (Feb. 1, 

1993) (staff response letter noting that exclusion 

under Rule 14a–8(i)(11) was not appropriate 

because the second proposal’s ‘‘principal thrust’’ 

differed from the first proposal’s ‘‘principal focus’’). 45See Pfizer Inc. (Feb. 17, 2012). 

existing reports or disclosures about that 

topic may not implement the essential 

elements of the proposal, especially if 

the plain language of the proposal 

explains how the company’s existing 

reports or disclosures are insufficient. 

Additionally, where a proposal requests 

a report from the company’s board of 

directors (such as disclosure regarding 

the board’s assessment of a topic, or the 

board’s process in approaching a topic), 

the staff may determine that the 

company has not implemented an 

essential element of the proposal if the 

report comes from management rather 

than the board, if the proposal 

demonstrates a clear emphasis on 

reporting directly from the board. 

We believe that the proposed 

amendment would facilitate shareholder 

suffrage, provide a more objective and 

specific framework for the substantial 

implementation exclusion, assist the 

staff in more efficiently reviewing and 

responding to no-action requests, and 

benefit shareholders and companies by 

promoting more consistent and 

predictable determinations. By 

providing greater certainty and 

transparency with respect to the 

standard to be applied under the rule, 

the proposed amendment would aid 

shareholder-proponents, in drafting 

their proposals, and companies, in 

determining whether a proposal may be 

excludable under the rule. 

Request for Comment 

1. Should we amend the standard for 

exclusion under Rule 14a–8(i)(10), as 

proposed, to provide that a proposal 

may be excluded if ‘‘the company has 

already implemented the essential 

elements of the proposal’’? 

2. Would the proposed amendment 

benefit shareholder-proponents and 

companies by promoting more 

consistent and predictable 

determinations regarding application of 

the substantial implementation 

exclusion? What potential costs should 

we consider? 

3. Under the proposed amendment, 

the analytical framework would focus 

on a proposal’s essential elements. The 

determination of which elements of a 

proposal are essential under that 

framework would be guided by the 

degree of specificity of the proposal and 

of its stated primary objectives. Is this 

an appropriate standard to identify a 

proposal’s essential elements? Are there 

other potential approaches we should 

consider? 

B. Rule 14a–8(i)(11)—Duplication 

1. Background 

Rule 14a–8(i)(11), the duplication 

exclusion, provides that a shareholder 

proposal may be excluded if it 

‘‘substantially duplicates another 

proposal previously submitted to the 

company by another proponent that will 

be included in the company’s proxy 

materials for the same meeting.’’ 41

During the 2021, 2020, and 2019 proxy 

seasons, the staff received 12, 9, and 16 

no-action requests, respectively, 

asserting the duplication exclusion. Of 

these, the staff concurred in the 

exclusion of 3, 4, and 7 of the requests, 

respectively, on the basis of the 

duplication exclusion. 

As the Commission explained when it 

formally adopted the duplication 

exclusion in 1976, ‘‘[t]he purpose of the 

provision is to eliminate the possibility 

of shareholders having to consider two 

or more substantially identical 

proposals submitted to an issuer by 

proponents acting independently of 

each other.’’ 42 Aside from minor 

stylistic revisions to the provision in 

1998,43 the Commission has not 

updated the provision since its 

adoption. 

Historically, in evaluating whether 

proposals are substantially duplicative 

under Rule 14a–8(i)(11), the staff has 

considered whether the proposals share 

the same ‘‘principal thrust’’ or 

‘‘principal focus.’’ 44 Proposals that 

differ as to terms and/or scope may 

nevertheless be deemed substantially 

duplicative if the principal thrust or 

focus is the same. The staff’s experience 

with Rule 14a–8(i)(11) through the noaction letter process has demonstrated 

that this analytical framework can be 

difficult to apply in a consistent and 

predictable manner because, as with the 

‘‘substantial implementation’’ standard 

under current Rule 14a–8(i)(10), there 

are numerous potential approaches to 

evaluating whether a proposal is 

‘‘substantially’’ duplicative as well as to 

discerning a proposal’s principal thrust 

or focus. The current Rule 14a–8(i)(11) 

framework can necessitate factintensive, case-by-case judgments in 

determining a proposal’s principal 

thrust or focus, and delineating the 

principal thrust or focus too broadly or 

too narrowly can lead to under- or overinclusion of shareholder proposals, 

respectively. 

We also note that, because Rule 14a– 

8(i)(11) permits exclusion only of the 

later-received proposal, it operates to 

the advantage of the first shareholder to 

submit a proposal that is substantially 

duplicative of another proposal 

submitted for the same meeting. Thus, 

the rule may create an incentive to 

submit a proposal quickly. As a result, 

the rule enables a shareholder who is 

first to submit a proposal for a 

company’s meeting to preempt the 

consideration of later-received 

proposals, even though a later proposal 

(if it had been voted on) may have 

received more shareholder support. 

Accordingly, we are concerned that the 

current duplication standard may 

unduly constrain shareholder suffrage 

by limiting shareholder-proponents’ 

ability to engage with the companies 

whose securities they own and with 

other shareholders by presenting for 

consideration competing approaches to 

addressing important issues. 

2. Proposed Amendment 

We are proposing an amendment to 

Rule 14a–8(i)(11) providing that a 

proposal ‘‘substantially duplicates’’ 

another proposal if it ‘‘addresses the 

same subject matter and seeks the same 

objective by the same means.’’ 

For example, consider the following 

two proposals: (1) a proposal requesting 

that the company publish in 

newspapers a detailed statement of each 

of its direct or indirect political 

contributions or attempts to influence 

legislation; and (2) a proposal requesting 

a report to shareholders on the 

company’s process for identifying and 

prioritizing legislative and regulatory 

public policy advocacy activities. In 

considering the application of the 

duplication exclusion to these 

proposals, the staff previously had 

concurred that the proposals were 

substantially duplicative when 

analyzing the principal thrust or focus 

of the proposals.45 Under the proposed 

amendment, however, these proposals 

would not be deemed substantially 

duplicative because, although they both 

address the subject matter of the 

company’s political and lobbying 

expenditures, they seek different 

objectives by different means. 

We believe the proposed amendment 

would provide a clearer standard for 

exclusion that would assist the staff in 

more efficiently reviewing and 

responding to no-action requests and 

would benefit shareholder-proponents 


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46As discussed in Section II.C below, we are 

proposing a similar amendment to Rule 14a–8(i)(12) 

in consideration of the similar objectives of these 

exclusions. 

47 17 CFR 240.14a–8(i)(12). 

48From October 15, 2021 through May 10, 2022, 

the staff received 11 no-action requests asserting the 

resubmission exclusion, which represents an 

increase in requests compared to the 2020 and 2021 

proxy seasons. This increase is likely due to the 

higher resubmission thresholds under Rule 14a– 

8(i)(12) adopted in the 2020 Adopting Release, 

supra note 11, as discussed below. 

49See Adoption of Amendments to Proxy Rules, 

Release No. 34–4185 (Nov. 5, 1948) [13 FR 6678 

(Nov. 13, 1948)]. 

50See Notice of Proposal to Amend Proxy Rules, 

Release No. 34–4114 (July 6, 1948) [13 FR 3973 

(July 14, 1948)]. 

51See 1982 Proposing Release, supra note 28. 

52 Id.; see also 1976 Proposing Release, supra note 

24. 

53See 1976 Proposing Release, supra note 24. 

and companies by promoting more 

predictable and consistent 

determinations regarding the exclusion 

of proposals. By providing greater 

certainty and transparency with respect 

to the standards to be applied under the 

rule, the proposed amendment would 

aid shareholder-proponents, in drafting 

their proposals, and companies, in 

determining whether a proposal may be 

excludable under the rule. Moreover, 

the proposed amendment would 

promote more consistent outcomes 

when comparing a given proposal 

against proposals submitted for the 

same shareholder meeting for purposes 

of Rule 14a–8(i)(11).46

As discussed above, we recognize that 

Rule 14a–8(i)(11) operates to the 

advantage of the first shareholder to 

submit a proposal. By providing for 

exclusion only where a proposal 

‘‘addresses the same subject matter and 

seeks the same objective by the same 

means,’’ the proposed amendment 

would reduce incentives for proponents 

to submit a proposal quickly, reduce 

incentives for proponents to attempt to 

preempt other proposals those 

proponents do not agree with, and 

facilitate the consideration at the same 

shareholder meeting of multiple 

shareholder proposals that present 

different means to address a particular 

issue. In other words, the proposed 

amendment would enable the 

consideration by a company’s 

shareholders of later-received proposals 

that may be similar to and/or address 

the same subject matter as an earlierreceived proposal but which seek 

different objectives or offer different 

means of addressing the same matter. 

At the same time, we are aware of the 

possibility that the proposed 

amendment could result in the 

inclusion in a company’s proxy 

materials of multiple shareholder 

proposals dealing with the same or 

similar issue. This outcome could cause 

shareholder confusion and may lead to 

conflicting or inconsistent results and 

implementation challenges for 

companies if shareholders approve 

multiple similar, although not 

duplicative, proposals. Although we 

believe that the benefits of the proposed 

amendment would justify these 

potential impacts, we seek comment on 

the possible implications for companies 

and shareholders. 

Request for Comment 

4. Should we amend the standard for 

exclusion under Rule 14a–8(i)(11), as 

proposed, to specify that a proposal 

‘‘substantially duplicates’’ another 

proposal if it ‘‘addresses the same 

subject matter and seeks the same 

objective by the same means’’? 

5. Would the proposed amendment 

benefit shareholder-proponents and 

companies by promoting more 

consistent and predictable 

determinations regarding application of 

the duplication exclusion? What 

potential costs should we consider? 

6. Would the proposed amendment 

result in shareholder confusion or the 

inclusion and adoption of multiple 

contradictory proposals dealing with the 

same or similar issue? If so, what would 

be the implications for shareholders and 

companies? How would companies deal 

with any resulting implementation 

challenges? Are there potential 

measures we could consider to mitigate 

these impacts? For example, should we 

adopt a numerical limit on the number 

of shareholder proposals that address 

the same subject matter to be included 

in the proxy statement? If so, what 

numerical limit would be appropriate, 

how should such a limit be imposed, 

and what would be the anticipated costs 

of such an approach? 

7. We anticipate that the proposed 

amendment would reduce the first-intime advantage for the first shareholder 

to submit a proposal on a given topic. 

What is the impact of the first-in-time 

advantage on the ability of different 

shareholders to submit proposals 

addressing the same topic? 

8. Aside from a first-in-time standard, 

are there alternative objective standards 

that should be applied to determine 

which proposal(s) to exclude when a 

company has received proposals that are 

substantially duplicative under Rule 

14a–8(i)(11), such as the number of 

shares owned or the number of coproponents? 

C. Rule 14a–8(i)(12)—Resubmissions 

1. Background 

Rule 14a–8(i)(12), the resubmission 

exclusion, provides that a shareholder 

proposal may be excluded from a 

company’s proxy materials if it 

‘‘addresses substantially the same 

subject matter as a proposal, or 

proposals, previously included in the 

company’s proxy materials within the 

preceding five calendar years’’ if the 

matter was voted on at least once in the 

last three years and received support 

below specified vote thresholds on the 

most recent vote.47 During the 2021, 

2020, and 2019 proxy seasons, the staff 

received 2, 3, and 1 no-action requests, 

respectively, asserting the resubmission 

exclusion.48 Of these, the staff 

concurred in the exclusion of 1, 0, and 

1 of the requests, respectively, on the 

basis of the resubmission exclusion. 

Since 1948, the Commission has not 

required a company to include a 

shareholder proposal in its proxy 

statement if ‘‘substantially the same 

proposal’’ previously had been 

submitted for a shareholder vote and 

did not receive a specified minimum 

percentage of votes upon its most recent 

submission.49 The Commission 

explained that the purpose of the 

provision was ‘‘to relieve the 

management of the necessity of 

including proposals which have been 

previously submitted to security holders 

without evoking any substantial security 

holder interest therein.’’ 50 For many 

years following adoption of the 

provision, the staff interpreted the 

phrase ‘‘substantially the same 

proposal’’ to mean one that is virtually 

identical (in form as well as substance) 

to a proposal previously included in the 

issuer’s proxy materials.51

Some commentators had asserted that 

the provision failed to accomplish its 

stated purpose because proponents were 

able to evade exclusion of their 

proposals by simply recasting the form 

of the proposal, expanding its coverage, 

or by otherwise changing its language in 

a manner that precluded one from 

saying that the proposal is virtually 

identical to a prior proposal.52 In view 

of these concerns, in 1976 the 

Commission proposed to revise the 

standard for exclusion of a proposal 

under the provision from ‘‘substantially 

the same proposal’’ to ‘‘substantially the 

same subject matter.’’ 53 Some 

commenters had urged the Commission 

not to adopt the proposed amendment, 

arguing that: (1) abuses of the existing 

provision had been rare and did not 

justify the type of radical revision 


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54See id.; 1976 Adopting Release, supra note 19. 

55See 1976 Adopting Release, supra note 19. 

56See 1982 Proposing Release, supra note 28. 

57See 1983 Adopting Release, supra note 17, at 

38221. 

58See id. 

59See id. 

60See Adoption of Amendments to Proxy Rules, 

Release No. 34–4979 (Jan. 6, 1954) [19 FR 246 (Jan. 

14, 1954)]; 1983 Adopting Release, supra note 17; 

Proposals of Security Holders, Release No. 34– 

22625 (Nov. 14, 1985) [50 FR 48180 (Nov. 22, 

1985)]; 1998 Adopting Release, supra note 10. 61See 2020 Adopting Release, supra note 11 (the 

‘‘2020 amendments’’). 62See letters from Council of Institutional 

Investors dated January 30, 2020; James McRitchie 

dated February 2, 2020; Local Authority Pension 

Fund Forum dated February 3, 2020; New York City 

Comptroller dated February 3, 2020; New York 

State Comptroller dated February 3, 2020; Stewart 

Investors dated January 30, 2020. 

63See letter from Council of Institutional 

Investors dated January 30, 2020. 

64See letter from Local Authority Pension Fund 

Forum dated February 3, 2020. 

proposed; (2) the new standard would 

be almost impossible to administer 

because of the subjective determinations 

that it would require; and (3) it would 

unduly constrain shareholder suffrage 

because of its possible ‘‘umbrella’’ effect 

(i.e., it could be used to omit proposals 

that had only a vague relation to the 

subject matter of a prior proposal that 

received little shareholder support).54

After considering public comment, the 

Commission determined not to adopt 

the proposed revision, noting that ‘‘the 

potential drawbacks of the new 

provision appear to outweigh the 

prospective benefits.’’ 55

In 1982, the Commission again 

proposed the same revision considered 

in 1976 56 and, in 1983, adopted the 

proposed revision, noting that ‘‘this 

change is necessary to signal a clean 

break from the strict interpretive 

position applied to the existing 

provision.’’ 57 As amended, the 

provision permitted the exclusion of 

proposals dealing with ‘‘substantially 

the same subject matter’’ as proposals 

submitted in prior years that received 

support below specified vote thresholds. 

Commenters supporting the 1983 

amendment viewed it as an appropriate 

response to counter the abuse of the 

shareholder proposal process by 

‘‘certain proponents who make minor 

changes in proposals each year so that 

they can keep raising the same issue 

despite the fact that other shareholders 

have indicated by their votes that they 

are not interested in that issue.’’ 58

Commenters who opposed the change 

argued that the revision was too broad 

and that it could be used to exclude 

proposals that had only a vague relation 

to an earlier proposal. Noting these 

concerns, the Commission explained 

that, while ‘‘interpretation of the new 

provision will continue to involve 

difficult subjective judgments, . . . 

those judgments will be based upon a 

consideration of the substantive 

concerns raised by a proposal rather 

than the specific language or actions 

proposed to deal with those concerns’’ 

such that ‘‘an improperly broad 

interpretation of the . . . rule will be 

avoided.’’ 59

The ‘‘substantially the same subject 

matter’’ test has been in place since 

1983. However, the Commission has 

revisited the minimum vote thresholds 

necessary for resubmission under the 

provision from time to time 60 and 

increased the resubmission thresholds 

in 2020 (the ‘‘2020 amendments’’).61

Prior to the 2020 amendments, Rule 

14a–8(i)(12) required a proposal to 

receive at least: (i) 3 percent of the vote 

if previously voted on once; (ii) 6 

percent of the vote if previously voted 

on twice; or (iii) 10 percent of the vote 

if previously voted on three or more 

times. The 2020 amendments increased 

the levels of support a shareholder 

proposal must receive to be eligible for 

resubmission at the same company’s 

future shareholders’ meetings from 3, 6, 

and 10 percent to 5, 15, and 25 percent, 

respectively. We continue to assess the 

impact of these amendments. 

While the Commission did not 

otherwise propose changes to the 

wording of the rule in connection with 

the 2020 amendments, it did request 

comment on whether it should change 

the Rule 14a–8(i)(12) standard or its 

application, such as reverting to the pre1983 ‘‘substantially the same proposal’’ 

standard. The six commenters who 

responded to the request for comment 

were largely supportive of narrowing 

the standard for exclusion if the 

Commission raised the resubmission 

thresholds.62 For example, one 

commenter suggested that, if the 2020 

amendments raised the resubmission 

thresholds, the Commission should 

consider whether to ‘‘narrow the 

definition of ‘Resubmissions’ ’’ because 

‘‘the higher resubmission thresholds 

could expand the ability of a 

shareholder to preempt future proposals 

by submitting (intentionally or not) an 

unpopular idea that ‘addresses 

substantially the same subject matter’ as 

an idea that many shareholders 

support.’’ 63 Similarly, another 

commenter noted that a revised 

standard focusing not on the 

‘‘ ‘substantive concerns’ ’’ of similar 

proposals but rather on the ‘‘ ‘specific 

language or actions proposed to deal 

with those concerns’ ’’ would be helpful 

in order to ‘‘allow different approaches 

to the same or a similar issue to be 

voiced and provided as options for 

shareholders to support.’’ 64 The 

Commission did not adopt any changes 

to the applicable standard in response to 

these comments on the proposing 

release for the 2020 amendments. 

When considering whether proposals 

deal with ‘‘substantially the same 

subject matter,’’ the staff has followed 

the standard the Commission articulated 

in 1983: whether the proposals share the 

same ‘‘substantive concerns’’ rather than 

the ‘‘specific language or actions 

proposed to deal with those concerns.’’ 

This determination of a proposal’s 

‘‘substantive concerns’’ can necessitate 

fact-intensive, case-by-case judgments 

in applying Rule 14a–8(i)(12) through 

the no-action letter process. In this 

regard, as with the ‘‘substantial 

duplication’’ test under Rule 14a– 

8(i)(11), delineating the ‘‘substantive 

concerns’’ of a proposal either too 

broadly or too narrowly may result in 

the under- or over-inclusion of 

proposals, respectively. Additionally, 

the staff has observed that proposals 

that address the same subject matter but 

call for different actions may receive 

significantly different shareholder votes, 

which could suggest that shareholders 

view such proposals as raising different 

issues. 

We are concerned that the 

‘‘substantially the same subject matter’’ 

test under Rule 14a–8(i)(12) may not 

accomplish its stated purpose because 

focusing on whether proposals share the 

same ‘‘substantive concerns’’ rather than 

‘‘the specific language or actions 

proposed to deal with those concerns’’ 

may not, as the Commission initially 

had believed, avoid an ‘‘improperly 

broad interpretation’’ of the provision. 

In this regard, we share the concerns 

previously expressed by commentators 

that the ‘‘substantially the same subject 

matter’’ standard unduly constrains 

shareholder suffrage because of its 

potential ‘‘umbrella’’ effect—i.e., that it 

could be used to exclude proposals that 

have only a vague relation, or are not 

sufficiently similar, to earlier proposals 

that failed to receive the necessary 

shareholder support. As a result, the 

current standard could discourage 

experimentation with new ideas, as it 

limits proponents’ ability to modify 

their proposals to address a similar 

subject matter in subsequent years to 

build broader shareholder support, and 

also restricts other shareholders from 

presenting different or newer 

approaches to addressing the same 

issue. 


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65See The Goldman Sachs Group, Inc. (Jan. 10, 

2017). 

66See 1983 Adopting Release, supra note 17. 

67See 1982 Proposing Release, supra note 28, at 

47429. 

2. Proposed Amendment 

To address these concerns, we are 

proposing to revise the standard of what 

constitutes a resubmission under Rule 

14a–8(i)(12) from a proposal that 

‘‘addresses substantially the same 

subject matter’’ as a prior proposal to a 

proposal that ‘‘substantially duplicates’’ 

a prior proposal—the same standard 

that applies under current Rule 14a– 

8(i)(11), the duplication exclusion. The 

proposed amendments also would 

provide that, for purposes of Rule 14a– 

8(i)(12), a proposal ‘‘substantially 

duplicates’’ another proposal if it 

‘‘addresses the same subject matter and 

seeks the same objective by the same 

means.’’ 

Under the proposed approach, in 

order to be excludable under the 

resubmission exclusion, a proposal 

must not only address the same subject 

matter as a prior proposal but also must 

seek the same objective by the same 

means. In other words, the standard for 

exclusion would focus on the specific 

objectives and means sought by a 

proposal with respect to a given subject 

matter (i.e., the specific actions 

proposed to deal with a proposal’s 

‘‘substantive concerns’’). We anticipate 

that this approach may provide a more 

accurate indication of whether 

shareholders have already provided 

their views on a particular issue and the 

proposed means to address it. 

To take an example, the staff 

previously had viewed the following 

proposals as addressing the same 

subject matter for purposes of the 

resubmission exclusion: (1) a proposal 

requesting that the board adopt a policy 

prohibiting the vesting of equity-based 

awards for senior executives due to a 

voluntary resignation to enter 

government service (a ‘‘government 

service golden parachute’’); and (2) a 

proposal requesting that the board 

prepare a report to shareholders 

regarding the vesting of such 

government service golden parachutes 

that identifies eligible senior executives 

and the estimated dollar value of each 

senior executive’s government service 

golden parachute.65 Under the proposed 

amendment to Rule 14a–8(i)(12), 

although these proposals concern the 

same subject matter (namely, 

government service golden parachutes 

for senior executives), exclusion would 

not be warranted because they do not 

seek the same objectives by the same 

means. 

We note that, under the proposed 

revision to Rule 14a–8(i)(12), the 

previous proposal(s) and the current 

proposal need not be identical to 

warrant exclusion. In this regard, we do 

not propose to revert to the pre-1983 

standard of ‘‘substantially the same 

proposal’’ for the same reason that 

prompted the Commission to abandon 

this standard in 1983—namely, the 

concern that proponents could alter a 

few words from a previously submitted 

proposal to evade exclusion of their 

proposals.66 However, we seek public 

comment on whether it would be 

appropriate to return to the 

‘‘substantially the same proposal’’ pre1983 standard. 

We believe that the proposed 

amendments would alleviate the 

potential ‘‘umbrella’’ effect of the 

resubmission exclusion by enabling 

proponents to make adjustments to their 

proposals to build broader support and 

also allow other proponents to put forth 

their own proposals offering different 

ways to address the same issue. 

Consequently, the proposed 

amendments would align more closely 

with the purpose of the exclusion, 

which is to avoid the continued 

consideration of ‘‘proposals that have 

generated little interest when previously 

presented to the security holders,’’ 67 by 

recognizing that proposals that address 

the same subject matter, or share the 

same substantive concerns, do not 

necessarily garner equivalent levels of 

shareholder interest and support. In this 

way, we anticipate that the proposed 

revisions would strike a more 

appropriate balance between effecting 

the purpose of the exclusion and 

preserving the ability of shareholders to 

engage with a company and other 

shareholders through the shareholder 

proposal process. 

Although we recognize that the 

resubmission exclusion, as proposed to 

be amended, would continue to require 

a degree of fact-intensive judgment, we 

believe it would provide a clearer 

standard for exclusion, assist the staff in 

more efficiently reviewing and 

responding to no-action requests, and 

benefit shareholders and companies by 

promoting more consistent and 

predictable determinations regarding 

the exclusion of proposals. By providing 

greater certainty and transparency with 

respect to the standards to be applied 

under the rule, the proposed 

amendment would aid shareholderproponents, in drafting their proposals, 

and companies, in determining whether 

a proposal may be excludable under the 

rule. Moreover, the proposed 

amendments would promote more 

consistent outcomes when comparing a 

given proposal against proposals 

submitted for the same shareholder 

meeting, for purposes of Rule 14a– 

8(i)(11), and against proposals 

considered at prior meetings, for 

purposes of Rule 14a–8(i)(12), in 

consideration of the similar objectives of 

these exclusions. 

Request for Comment 

9. Should we amend the resubmission 

exclusion, as proposed, to provide that 

a resubmission is a proposal that 

‘‘substantially duplicates’’ a prior 

proposal, the same standard as under 

the duplication exclusion in Rule 14a– 

8(i)(11)? Should we amend the rule, as 

proposed, to specify that a proposal 

‘‘substantially duplicates’’ another 

proposal if it ‘‘addresses the same 

subject matter and seeks the same 

objective by the same means’’? Should 

we instead maintain the current 

standard? Should we consider a 

different standard, such as the 

Commission’s pre-1983 ‘‘substantially 

the same proposal’’ standard? Are there 

other approaches we should consider? 

10. Would the proposed amendment 

benefit shareholder-proponents and 

companies by promoting more 

consistent and predictable 

determinations regarding application of 

the resubmission exclusion? What 

potential costs should we consider? 

11. The proposed amendment seeks to 

strike a balance between the purpose of 

the resubmission exclusion to limit the 

consideration of proposals that do not 

garner significant shareholder support 

and the ability of shareholderproponents to engage with a company 

and other shareholders through the 

shareholder proposal process, including 

by mitigating the potential ‘‘umbrella’’ 

effect of the resubmission exclusion. 

Are there other considerations we 

should take into account? 

12. The proposed amendment would 

apply the same standard for exclusion 

when comparing a given proposal 

against proposals submitted for the 

same shareholder meeting, for purposes 

of the duplication exclusion in Rule 

14a–8(i)(11), and against proposals 

considered at prior meetings, for 

purposes of the resubmission exclusion 

in Rule 14a–8(i)(12). Is this approach 

appropriate? 

III. Economic Analysis 

As discussed above, we are proposing 

modifications to three of the substantive 

bases for the exclusion of shareholder 

proposals under Rule 14a–8. We are 

mindful of the costs and benefits of 

these proposed amendments. The 

discussion below addresses the 


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68Section 3(f) of the Exchange Act [17 U.S.C. 

78c(f)] and Section 2(c) of the Investment Company 

Act [15 U.S.C. 80a–2(c)] require the Commission, 

when engaging in rulemaking where it is required 

to consider or determine whether an action is 

necessary or appropriate in (or, with respect to the 

Investment Company Act, consistent with) the 

public interest, to consider, in addition to the 

protection of investors, whether the action will 

promote efficiency, competition, and capital 

formation. Further, Section 23(a)(2) of the Exchange 

Act [17 U.S.C. 78w(a)(2)] requires the Commission, 

when making rules under the Exchange Act, to 

consider the impact that the rules would have on 

competition, and prohibits the Commission from 

adopting any rule that would impose a burden on 

competition not necessary or appropriate in 

furtherance of the purposes of the Exchange Act. 

69The proposed amendments could also have 

indirect effects on providers of administrative and 

advisory services related to proxy solicitation and 

shareholder voting. 

70Foreign private issuers are exempt from the 

federal proxy rules under Exchange Act Rule 3a12– 

3(b). See supra note 1. 

71 17 CFR 270.20a–1 (‘‘Rule 20a–1’’) under the 

Investment Company Act [15 U.S.C. 80a–20(a)] 

requires management companies to comply with 

regulations adopted pursuant to Section 14(a) of the 

Exchange Act that would be applicable to a proxy 

solicitation if it were made in respect of a security 

registered pursuant to Section 12 of the Exchange 

Act. ‘‘Management company’’ means any 

investment company other than a face-amount 

certificate company or a unit investment trust. See 

15 U.S.C. 80a–4. 

72We estimate the number of companies with a 

class of securities registered under Section 12 of the 

Exchange Act by reviewing all filers, by unique 

Central Index Key (CIK), of Forms 10–K and 

amendments filed during calendar year 2021. 

73The proxy materials we consider in our 

analysis are materials filed via EDGAR under 

submission types DEF 14A, DEF 14C, DEFA14A, 

DEFC14A, DEFM14A, DEFM14C, DEFR14A, 

DEFR14C, DFAN14A, PRE 14A, PRE 14C, 

PREC14A, PREM14A, PREM14C, PRER14A, and 

PRER14C. 

74We identify companies that voluntarily file 

proxy materials as companies reporting pursuant to 

Section 15(d) of the Exchange Act but not registered 

under Section 12(b) or Section 12(g) of the 

Exchange Act and foreign private issuers that filed 

any proxy materials during calendar year 2021 with 

the Commission. See supra note 73 for details on 

the proxy materials we consider for this analysis. 

75We estimate the number of unique management 

companies by reviewing all Forms N–CEN of 

companies active through December 2021 received 

by the Commission as of March 15, 2022. These 

2,034 management companies were associated with 

the following funds: (i) 11,780 open-end funds, out 

of which 2,398 were Exchange Traded Funds 

(‘‘ETFs’’) registered as open-end funds or open-end 

funds that had an ETF share class; (ii) 651 closedend funds; and (iii) 14 variable annuity separate 

accounts registered as management investment 

companies. Open-end funds are series of trusts 

registered on Form N–1A. Closed-end funds are 

trusts registered on Form N–2. Variable annuity 

separate accounts registered as management 

companies are trusts registered on Form N–3. 

76We estimate the number of unique management 

companies that submitted matters for their security 

holders’ vote by reviewing Item B.10 in all Forms 

N–CEN of management companies active through 

December 2021 received by the Commission as of 

March 15, 2022. These 625 management companies 

were associated with the following funds: (i) 2,481 

open-end funds, out of which 278 were ETFs 

registered as open-end funds or open-end funds that 

had an ETF share class; (ii) 436 closed-end funds; 

and (iii) no variable annuity separate accounts. 

77We estimate the number of unique entities 

associated with management companies by 

reviewing unique CIKs associated with materials 

filed via EDGAR under submission types DEF 14A, 

DEF 14C, DEFA14A, DEFC14A, DEFM14A, 

DEFM14C, DEFR14A, DEFR14C, DFAN14A, N–14, 

PRE 14A, PRE 14C, PREC14A, PREM14A, 

PREM14C, PRER14A, and PRER14C. Form N–14 

can be a registration statement and/or proxy 

statement. We manually review all Forms N–14 

filed during calendar year 2021 with the 

Commission and we exclude from our estimates 

Forms N–14 that are exclusively registration 

statements. Because management companies could 

comprise funds and proxy materials could be filed 

with the Commission at the management company, 

fund family, a combination of funds or fund 

families, or individual fund level, the number of 

entities associated with management companies 

that filed proxy materials during calendar year 2021 

exceeds that number of management companies 

that submitted matters for their security holders’ 

vote. See supra note 76. 

78We estimate the number of unique proxy filings 

by reviewing the unique accession numbers of 

proxy materials filed by entities associated with 

management companies. Because multiple entities 

of management companies, as identified by unique 

CIK, could appear on the same proxy form, the 

number of proxy forms is lower than the number 

of unique entities estimated above. See supra note 

77. 

potential economic effects of the 

proposed amendments, including the 

likely benefits and costs, as well as the 

effects on efficiency, competition, and 

capital formation.68 We analyze the 

expected economic effects of the 

proposed amendments relative to the 

current baseline, which consists of both 

the current regulatory framework and 

the current practices relating to 

shareholder proposal submissions. 

Overall, we expect the proposed 

amendments to benefit companies and 

shareholder-proponents by providing 

standards that are easier to apply and 

result in determinations that are more 

predictable and consistent. To the 

extent that companies and shareholderproponents modify their behavior in 

response to the proposed amendments, 

additional economic effects could 

include changes in the volume and 

characteristics of shareholder proposals 

submitted and included in companies’ 

proxy statements. 

Where possible, we have attempted to 

quantify the benefits, costs, and effects 

on efficiency, competition, and capital 

formation expected to result from the 

proposed amendments. In many cases, 

however, we are unable to quantify the 

economic effects because we lack 

information necessary to provide 

reasonable estimates. For example, we 

do not have data that would allow us to 

assess the extent to which companies 

and shareholder-proponents may 

change their behavior in response to the 

proposed amendments. We further note 

that even in cases where we have some 

data regarding certain economic effects, 

the quantification of these effects is 

particularly challenging due to the 

number of assumptions that we would 

need to make to estimate the benefits 

and costs of the proposed amendments. 

Where we are unable to quantify the 

economic effects of the proposed 

amendments, we provide a qualitative 

assessment of the potential effects and 

encourage commenters to provide data 

and information that would help 

quantify the benefits, costs, and 

potential impacts of the proposed 

amendments on efficiency, competition, 

and capital formation. 

A. Affected Parties 

The proposed amendments would 

affect all companies subject to the 

federal proxy rules that receive 

shareholder proposals, the proponents 

of these proposals, and non-proponent 

shareholders of these companies.69

Companies that have a class of equity 

securities registered under Section 12 of 

the Exchange Act are subject to the 

federal proxy rules, including Rule 14a– 

8.70 In addition, all management 

companies are subject to the federal 

proxy rules.71 Finally, there are certain 

companies that voluntarily file proxy 

materials that could be affected to the 

extent that they receive shareholder 

proposals. 

As of December 31, 2021, we estimate 

that there were 5,862 companies that 

had a class of securities registered under 

Section 12 of the Exchange Act 

(including 97 Business Development 

Companies (‘‘BDCs’’)).72 This estimate 

represents an upper bound of the 

number of potentially affected 

companies because some of these 

companies may not file proxy materials 

or receive a shareholder proposal in a 

given year. Out of the 5,862 potentially 

affected companies mentioned above, 

4,588 (78 percent) filed proxy materials 

with the Commission during calendar 

year 2021.73 In addition, as of December 

31, 2021, there were 33 companies that 

voluntarily filed proxy materials.74

As of December 31, 2021, there were 

2,034 management companies 75 that 

were subject to the federal proxy rules, 

of which 625 (31 percent) reported to 

have submitted matters for their security 

holders’ vote during the reporting 

period.76 However, we estimate that 944 

unique entities associated with 

management companies 77 filed proxy 

materials with the Commission during 

calendar year 2021 on 569 unique 

forms.78

Proponents of shareholder proposals 

also could be affected by the proposed 

rule amendments. We estimate that 

there were approximately 176 

proponents—66 individual proponents 


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79 Data is retrieved from the FactSet 

SharkRepellent Proxy Proposal dataset, infra note 

96. This data allows for the unique identification 

of a sole lead proponent of each proposal, but not 

the unique identification of all co-proponents 

across proposals. We estimate based on information 

provided in FactSet’s ‘‘proposal notes,’’ that 

approximately 11 percent of proposals in 2021 were 

submitted by multiple proponents and among the 

proposals that were submitted by multiple 

proponents, the average (median) number of 

proponents was 2.7 (3). As a result, our estimated 

number of proponents should be interpreted as a 

lower bound on the total number of unique 

shareholder-proponents. 

80See id. 

81See Neil Bhutta et al., Changes in U.S. Family 

Finances from 2016 to 2019: Evidence from the 

Survey of Consumer Finances, 106 Fed. Res. Bull. 

1, 18–19 (2020), available at https://

www.federalreserve.gov/publications/files/scf20.pdf 

(reporting that 52.6 percent of the 128.6 million 

families represented owned stock in publicly-traded 

companies). Indirect holdings of publicly-traded 

stock are those in pooled investment funds, 

retirement accounts, and other managed assets. The 

same study estimates that approximately 19 million 

households (15 percent) held publicly traded stock 

directly in 2019. This is a triennial survey, and the 

latest data available as of this time is from the 2019 

survey. 

82See Alon Brav et al., Retail shareholder 

participation in the proxy process: Monitoring, 

engagement, and voting, 144 J. of Fin. Econ. 492, 

497 (2022). The number of retail accounts is an 

approximation of the number of retail investors 

because each retail investor can hold multiple 

accounts and multiple retail investors can hold a 

single account. Further, this data only covers a 

subset of all retail accounts. 

83 Data is retrieved from the Thomson/Refinitiv 

Institutional (13F) Holdings dataset. Unique 

institutional investors are composed of filers with 

a unique Manager Number that filed a Form 13F at 

least for one quarter during calendar year 2021 with 

the Commission. The estimated number of 

institutional investors is a lower bound of the actual 

number of institutional investors because only 

institutional investment managers that exercise 

discretion over $100 million or more in Section 

13(f) securities on the last trading day of any month 

of any calendar year must file Form 13F with the 

Commission. See 17 CFR 240.13f–1. 

84See supra note 2. 

85See supra note 16. 

86See supra note 18. 

87See supra note 20. Rule 14a–8(i)(12) was 

amended in 2020 and these resubmission 

thresholds only apply to proposals submitted for 

meetings beginning in 2022. See 2020 Adopting 

Release, supra note 11. Prior to the 2020 

amendments, Rule 14a–8(i)(12) required a proposal 

to receive at least: (i) 3 percent of the vote if 

previously voted on once; (ii) 6 percent of the vote 

if previously voted on twice; or (iii) 10 percent of 

the vote if previously voted on three or more times. 

See id. 

88See 17 CFR 240.14a–8(j)(1). A shareholder 

proposal may be omitted without submitting a noaction request. In particular, a company may give 

notice to the Commission that it will exclude the 

proposal without submitting a no-action request, 

perhaps if it intends to seek a determination by a 

court. However, this practice is rare and virtually 

all proposal exclusion notifications come in the 

form of no-action requests. 

89Rarely, a shareholder proposal may be included 

in a company’s proxy and voted on despite 

Commission staff having granted a company’s noaction request regarding exclusion of the proposal. 

This was the case for four proposals (approximately 

0.1 percent) submitted for annual meetings held 

from 2017 through 2021. See infra note 97. 

90See generally Thomas Lee Hazen, Treatise on 

the Law of Securities Regulation, § 10:27 (7th ed. 

2016). See also supra note 88. 

91See supra note 35. 

and 110 institutional proponents—that 

submitted a shareholder proposal to be 

included in a company’s proxy 

statement as a lead proponent during 

calendar year 2021.79 Because many 

proponents may not submit a 

shareholder proposal every year, our 

estimate based solely on 2021 

submissions could be undercounting the 

number of proponents that could be 

affected by the proposed amendments. 

For example, there were approximately 

586 unique lead proponents—272 

individual proponents and 314 

institutional proponents—that 

submitted a shareholder proposal to be 

included in a company’s proxy 

statement for annual and special 

meetings from 2017 through 2021.80

Non-proponent shareholders of 

companies also could be indirectly 

affected by the proposed rule 

amendments. According to a recent 

study based on the 2019 Survey of 

Consumer Finances, approximately 68 

million households owned publicly 

traded stock directly or indirectly 

(through other investment 

instruments).81 Moreover, based on an 

academic study using U.S. retail 

shareholder voting data from Broadridge 

covering nearly all regular and special 

meetings during the three years 2015 to 

2017, there were approximately 46 

million retail accounts that directly held 

shares of U.S. public companies.82 Our 

analysis of institutional investor data 

also shows that there were 6,968 unique 

institutional investors during 2021.83

B. Baseline 

The baseline against which the costs, 

benefits, and the impact on efficiency, 

competition, and capital formation of 

the proposed amendments are measured 

consists of the current regulatory 

framework, including the current staff 

no-action positions with respect to Rule 

14a–8 and the current practices of 

companies and shareholders related to 

shareholder proposals. 

1. Regulatory Framework 

State laws, company bylaws and other 

governing documents, and the federal 

securities laws jointly govern the 

shareholder proposal process. Rule 14a– 

8 sets forth procedural and substantive 

bases upon which a company may 

exclude a shareholder proposal from its 

proxy statement.84 Under Rule 14a– 

8(i)(10), the substantial implementation 

exclusion, companies may exclude a 

shareholder proposal that ‘‘the company 

has already substantially 

implemented.’’ 85 Under Rule 14a– 

8(i)(11), the duplication exclusion, 

companies may exclude a shareholder 

proposal that ‘‘substantially duplicates 

another proposal previously submitted 

to the company by another proponent 

that will be included in the company’s 

proxy materials for the same 

meeting.’’ 86 Under Rule 14a–8(i)(12), 

the resubmission exclusion, companies 

may exclude a shareholder proposal that 

‘‘addresses substantially the same 

subject matter as a proposal, or 

proposals, previously included in the 

company’s proxy materials within the 

preceding five calendar years’’ if the 

matter was voted on at least once in the 

last three years and did not receive: (i) 

5 percent of the vote if previously voted 

on once; (ii) 15 percent of the vote if 

previously voted on twice; or (iii) 25 

percent of the vote if previously voted 

on three or more times.87

When a company intends to exclude 

a shareholder proposal from its proxy 

materials, it must advise the 

Commission staff of its intention to do 

so and will generally submit a no-action 

request seeking the staff’s concurrence 

that it would not recommend 

enforcement action to the Commission if 

the company excludes the proposal 

under one or more of the bases for 

exclusion in Rule 14a–8.88 Generally, if 

the staff grants a no-action request, a 

company will not include the 

shareholder proposal in its proxy 

statement.89 In some instances, a 

company may negotiate with a 

proposal’s proponent for the withdrawal 

of the proposal during or after the noaction process. In any event, the staff’s 

no-action position is not legally binding 

and the matter ultimately may be 

resolved by a federal district court.90

As new and developing issues arise 

with respect to companies and 

shareholders, shareholder proposals 

may demonstrate different trends, and 

the staff’s review under the substantive 

bases for exclusion of Rule 14a–8 may 

adjust in response to such trends. As a 

result, companies and shareholders may 

find it difficult to apply past staff noaction positions to predict whether a 

proposal should be included in a 

company’s proxy statement. For 

example, several commenters have 

expressed concerns around the variation 

and potential unpredictability of staff 

positions regarding the substantial 

implementation exclusion.91 More 

broadly, stock price movements 


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92See, e.g., John G. Matsusaka et al., Can 

Shareholder Proposals Hurt Shareholders? 

Evidence from Securities and Exchange 

Commission No-Action-Letter Decisions. 64 J. of L. 

and Econ. 107 (2021) (finding a statistically 

significant mean cumulative abnormal return, the 

difference between the actual return and the 

expected return, ranging between 0.11 percent and 

0.58 percent following an issuance of a staff noaction letter concurring in a company’s exclusion 

of a shareholder proposal under Rule 14a–8). 

Because proposal details and a company’s request 

to exclude it are publicly available on the 

Commission’s website in advance of the staff noaction response, we would not expect to see any 

price reactions if staff no-action responses were 

fully predictable. 

93 In some past instances, courts have disagreed 

with the staff’s interpretation of bases for exclusion 

under Rule 14a–8. See, e.g., Trinity Wall Street v. 

Wal-Mart Stores, Inc., 792 F.3d 323 (3d Cir. 2015). 

94Using data from the 2021, 2020 and 2019 proxy 

seasons, we estimate that in approximately half 

(one third) of no-action requests asserting the 

substantial implementation or duplication 

(resubmission) basis for exclusion, companies 

asserted at least one other basis under Rule 14a–8. 

95The 2020 amendments to Rule 14a–8, which 

apply to shareholder proposals submitted for 

annual and special meetings held on or after 

January 1, 2022, included changes to the ownership 

requirements to be eligible to submit a proposal, 

increases in the resubmission voting thresholds, 

and certain other procedural requirement changes. 

See 2020 Adopting Release, supra note 11. These 

amendments also included a transition period that 

allows shareholders meeting specified conditions to 

rely on prior ownership thresholds to demonstrate 

eligibility to submit a proposal for an annual or 

special meeting to be held prior to January 1, 2023. 

See id. at 70263. 

96Unless stated otherwise, all data in this section 

is retrieved from the FactSet SharkRepellent Proxy 

Proposal dataset (accessed on June 4, 2022). Dataset 

coverage includes over 4,000 U.S.-incorporated 

public companies and some foreign-incorporated 

companies. FactSet extracts and processes proxy 

data from regulatory filings and press releases, as 

well as through web-monitoring and in rare 

instances, direct engagement with companies and 

shareholder-proponents. We exclude from our 

analysis shareholder proposals that are not subject 

to Rule 14a–8, such as proposals related to proxy 

contests and other proposals appearing in dissident 

shareholders’ proxy material, proposals that were 

raised from the floor of the annual or special 

meetings and were not submitted to appear in the 

companies’ proxy statements, and proposals 

submitted for a vote at meetings of foreign 

companies that are not subject to federal proxy 

rules. 

97Our data is comprehensive with respect to 

shareholder proposals that appear in companies’ 

proxy statements and those for which the company 

submitted a no-action request to Commission staff. 

However, proposal submissions counts in our 

analysis represent a lower bound on all shareholder 

proposal submissions because this data may not 

include all shareholder proposals that were 

withdrawn by proponents. In particular, if a 

submitted but withdrawn proposal did not appear 

in a proxy statement, a press release, or a 

company’s no-action request, it may not be 

included in the data we use for the analysis in this 

section. 

98Using data from previous proxy seasons, we 

estimate that proposals submitted for meetings held 

from January 1, 2022 through May 20, 2022 will 

account for approximately 60 percent of all 

proposals that will be submitted during the 2022 

proxy season. We also note that some effects of the 

2020 amendments on the number of proposals 

submitted and included in companies’ proxy 

statements may not yet be realized. See supra note 

95. 

99See supra note 97, which discusses the 

potential underestimation of the volume of 

withdrawn proposals in our analysis. In this 

analysis, we classify a shareholder proposal that 

was included in a company’s proxy statement but 

was not voted on in the annual or special meeting 

as a withdrawn proposal. 

100We grouped proposals into governance, social, 

and environmental categories based on FactSet’s 

proposal subcategory definitions. The governance 

group is mostly comprised of shareholder proposals 

related to shareholder rights and takeover defenses, 

board structure and independence, and executive 

compensation. Social proposals include, among 

others, proposals related to political contributions 

and lobbying disclosure, labor and health issues, 

human rights, and board diversity. Environmental 

proposals include, among others, proposals related 

to sustainability, greenhouse gas emissions, climate 

change, community/environmental impact, and 

renewable energy. 

101Throughout our analysis, ‘‘individual’’ 

proponents are comprised of retail investors. 

‘‘Institutional’’ proponents are comprised of asset 

managers, unions, pension funds, religious 

organizations, nonprofit organizations, and other 

organizations. The data is missing lead proponents’ 

identity for 36 (9 percent) of shareholder proposals 

over this period which is presumably because 

companies are not required to disclose the identity 

Continued 

following the issuance of staff no-action 

letter responses suggest that staff 

responses resolve some uncertainty 

about whether a proposal will be 

included in a company’s proxy 

statement.92 Yet, even after the staff’s 

position is disclosed, uncertainty could 

remain as to whether a court would 

agree with the staff’s interpretation of an 

exclusion under Rule 14a–8.93

Uncertainty regarding the applicability 

of any individual basis for exclusion to 

any particular proposal may contribute 

to companies’ common practice of 

asserting multiple bases for exclusion in 

their no-action requests under Rule 14a– 

8.94

2. Practices Related to Proposal 

Submissions 

In this section, we describe practices 

around shareholder proposal 

submissions to understand the baseline 

against which we compare the effects of 

the proposed amendments, informing 

the analysis of the potential effects of 

the proposed amendments to Rule 14a– 

8 in later sections. We note that the 

current practices around shareholder 

proposals are likely to differ from prior 

years because the 2020 amendments to 

Rule 14a–8, which relate to certain 

procedural requirements and the 

resubmission exclusion under Rule 14a– 

8(i)(12), became effective for proposals 

submitted for annual or special 

meetings to be held on or after January 

1, 2022.95 We expect the 2020 

amendments to affect the number of 

proposals submitted and included in 

companies’ proxy statements in 2022 

and the subsequent seasons relative to 

prior years. In addition, as the 

characteristics of shareholder proposals 

vary across years, so do the outcomes of 

the staff’s no-action positions based on 

the limited subset of proposals that the 

staff reviews through the no-action letter 

process. Further, Commission and staff 

interpretations of the procedural and 

substantive bases for exclusion under 

Rule 14a–8 have varied over time, as 

discussed above in Sections II.A.1, 

II.B.1, and II.C.1. As a result, the 

percentage of proposals submitted but 

not included in companies’ proxy 

statements can vary considerably from 

one proxy season to the next, limiting 

our ability to draw conclusions 

regarding the current practices related to 

shareholder proposal exclusions based 

on data from an individual proxy 

season. 

Our data 96 on shareholder proposals 

contains proposals that were either (i) 

included in companies’ proxy 

statements and voted on by 

shareholders; (ii) omitted from 

companies’ proxy statements through 

the staff no-action process; or (iii) 

submitted by the proponents but 

withdrawn prior to a vote, where the 

information about the proposal is 

publicly available.97 Throughout the 

analysis, we disaggregate statistics by 

company size, proponent types, and 

proposal topics to understand how the 

practices related to shareholder 

proposals have varied across these 

categories. 

We find that 392 shareholder 

proposals were submitted to be 

included in companies’ proxy 

statements for meetings held from 

January 1, 2022 through May 20, 2022, 

a decrease of approximately 10 percent 

relative to proposals submitted for 

meetings held in the same period in 

2021.98 Of these 392 submissions, the 

majority of proposals (80 percent) were 

included in companies’ proxy 

statements and voted on, while 11 

percent were omitted following a noaction letter issued by the Commission 

staff and 9 percent were withdrawn by 

the proponent prior to the applicable 

meeting.99 The majority (85 percent) of 

proposals were submitted for annual 

and special meetings of S&P 500 

companies. Further, the majority of 

proposals submitted were related to 

governance issues (53 percent), followed 

by those on social (33 percent) and 

environmental (13 percent) issues.100

We also estimate that 42 percent of 

proposals were submitted by individual 

proponents while 49 percent were 

submitted by institutional 

proponents.101 Lastly, the average 


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of the proponent in proxy statements. See 17 CFR 

240.14a–8(l). 102We categorize a proposal as a first submission 

if it has not been voted on in the preceding three 

calendar years. A proposal is categorized as a 

second (third or subsequent) submission if it has 

been voted on within the preceding three calendar 

years and it has been voted on once (two or more 

times) in the past five calendar years. Conducting 

any systematic analysis on proposal resubmissions 

across multiple years requires employing a 

methodology for determining whether multiple 

proposals deal with ‘‘substantially the same subject 

matter.’’ For this analysis, we relied on FactSet’s 

standardized proposal descriptions and the text of 

the proposal. In particular, we classified a proposal 

as a resubmission if the prior proposal had the same 

FactSet-assigned description and the text of the 

prior proposal was not substantially dissimilar or if 

the prior proposal had a different FactSet-assigned 

description but the text of the prior proposal was 

almost identical. Textual similarity was computed 

via a probabilistic string-matching algorithm. Prior 

research on shareholder proposals similarly has 

used shareholder proposal descriptions to identify 

proposals as resubmissions. See Brandon Whitehill, 

Clearing the Bar, Shareholder Proposals and 

Resubmission Thresholds, Council of Institutional 

Investors (Nov. 2018), available at https://

docs.wixstatic.com/ugd/72d47f_

092014c240614a1b9454629039d1c649.pdf. It is 

important to note that our methodology for 

classifying a proposal as a resubmission of a 

previously submitted proposal may not always 

align with what the staff or the courts might view 

as a proposal on ‘‘substantially the same subject 

matter.’’ While using a different textual comparison 

methodology may result in a change in the number 

and characteristics of proposals classified as 

resubmissions in our analysis, we have no reason 

to believe that it would yield materially different 

qualitative conclusions regarding proposal 

resubmissions over the five-year period we 

consider. 

103Using data from previous proxy seasons, we 

estimate that no-action requests received up to May 

10, 2022 will account for approximately 90 percent 

of all no-action requests the staff will receive for the 

2022 proxy season. 

104FactSet data includes seven shareholder 

proposals submitted for six annual meetings during 

the 2017–2021 period that were cancelled. We 

exclude from our analysis two proposals from two 

cancelled meetings because identical proposals 

were included in proxy statements for rescheduled 

annual meetings to avoid double-counting the same 

proposal. We classify the remaining five proposals 

as withdrawn because they were not resubmitted 

for the companies’ subsequent annual meetings. 

105The percentages in parentheses in each 

column of the table represent percentages of the 

total number of proposals in the first row of each 

column. 

106See supra note 97. 

107We note that the volume of shareholder 

proposal submission is not uniform across 

companies. Approximately half of S&P 500 

companies received no shareholder proposals over 

the five-year period, while five percent received 

more than four proposals on average per year. We 

also estimate that approximately two percent of 

shareholder proposals were submitted to 

management companies. 

108See supra note 100 for a description of how 

we grouped proposals into governance, social, and 

environmental categories. There are 130 (four 

percent) shareholder proposals submitted over the 

2017–2021 period that we classify as neither 

governance, social, or environmental. These 

proposals include proposals related to returning 

capital to shareholder (in the form of dividends or 

share repurchases), asset divestitures, fund-specific 

issues, and other miscellaneous issues. Because our 

data includes shareholder proposals that are 

categorized as neither governance, social, nor 

environmental, the percentages in the Proposal 

Topic rows of Table 2 do not sum up to 100 

percent. 

109See supra note 101 for a description of how 

we categorized proponent types. The data is 

missing lead proponents’ identity for 238 (7 

percent) of shareholder proposals over the 2017– 

2021 period. Because proponent identity is missing 

for some proposals in our data, the percentages in 

the Proponent Type rows of Table 2 do not sum up 

to 100 percent. 

110We note that the higher withdrawal likelihood 

for proposals submitted by institutional 

shareholder-proponents could be due to these 

shareholders having more direct channels of 

communication and engagement and influence with 

companies than individual investors. See, e.g., 

Eugene Soltes et al., What Else do Shareholders 

Want? Shareholder Proposals Contested by Firm 

Management (Harv. Bus. Sch., Working Paper, July 

14, 2017), https://ssrn.com/abstract=2771114 

(finding that the amount of shareholder ownership 

of shares is positively associated with the 

probability that a proposal is withdrawn, which is 

consistent with the idea that large shareholders ‘‘are 

more influential and are more likely to have 

dialogue with managers that would facilitate 

implementation of their proposal prior to a 

shareholder vote’’) (‘‘Soltes et al. (2017)’’). 

shareholder support for voted proposals 

during this period was 30 percent of the 

total number of votes cast and the 

median shareholder support was 32 

percent, with approximately 10 percent 

of proposals receiving majority support. 

Changes to the resubmission voting 

thresholds decreased the fraction of 

proposals voted on in 2021 that were 

eligible to be resubmitted for meetings 

held in 2022. We find that overall, 76 

percent of voted proposals that did not 

receive majority support were eligible 

for a resubmission in 2022, a decrease 

from 89 percent of proposals that were 

eligible in the prior year. Governance 

and social proposals were more likely to 

be eligible for resubmission (77 percent 

of voted proposals that did not receive 

majority support) than environmental 

proposals (61 percent of voted proposals 

that did not receive majority support). 

We also find that proposals submitted 

by individual investors were more likely 

to be eligible for resubmission (81 

percent) than those submitted by 

institutions (74 percent). Of the 392 

shareholder proposals submitted to be 

included in companies’ proxy 

statements for meetings held from 

January 1, 2022 through May 20, 2022, 

258 (66 percent) were a first submission, 

55 (14 percent) were a second 

submission, and the remaining 79 (20 

percent) were a third or subsequent 

submission.102

We also note that from October 15, 

2021 through May 10, 2022,103 the staff 

received 87 no-action requests asserting 

the substantial implementation 

exclusion (37 percent of all no-action 

requests over this period) and concurred 

in the exclusion of 11 percent of these 

requests on the basis of the substantial 

implementation exclusion. In the same 

period, the staff received 22 no-action 

requests asserting the duplication 

exclusion (9 percent of all no-action 

requests over this period) and concurred 

in the exclusion of 18 percent of these 

requests on the basis of the duplication 

exclusion. Lastly, the staff received 11 

no-action requests asserting the 

resubmission exclusion (5 percent of all 

no-action requests over this period) and 

concurred in the exclusion of 45 percent 

of these requests on the basis of the 

resubmission exclusion. 

Because the 2022 proxy season is 

ongoing and, as a result, the information 

on current practices related to 

shareholder proposals is incomplete, we 

supplement the analysis above with 

information about shareholder 

proposals submitted for annual and 

special meetings held from 2017 

through 2021.104 We combine statistics 

on shareholder proposals submitted 

over a period of five years because the 

number and characteristics of 

shareholder proposal submissions can 

vary from one year to the next. A total 

of 3,560 proposals were submitted for 

inclusion in companies’ proxy materials 

for annual and special meetings held 

from 2017 through 2021, an average of 

approximately 712 proposals submitted 

each year (see Table 2 105). Of the 

submissions, the majority of proposals 

(66 percent) were included in 

companies’ proxy statements and voted 

on, while 20 percent were omitted 

following a no-action letter issued by 

the Commission staff, and 14 percent 

were withdrawn by the proponent prior 

to the applicable meeting.106

Shareholder proposal activity in this 

five-year period was concentrated 

among the S&P 500 companies, with 

each company in the S&P 500 index 

receiving on average a single 

shareholder proposal each year.107 The 

majority of proposals submitted were 

related to governance issues (54 

percent), followed by those on social (31 

percent) and environmental (11 percent) 

issues.108 Lastly, slightly less than half 

of proposals (46 percent) were 

submitted by individual proponents,109

but these proposals were more likely to 

be omitted and less likely to be 

withdrawn than those submitted by 

institutional proponents.110


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111 During the 2021 proxy season, approximately 

41 percent of no-action requests asserted the 

substantial implementation exclusion, as compared 

to 38 percent and 37 percent in the 2020 and the 

2019 seasons, respectively. The staff concurred in 

approximately 33 percent of no-action requests that 

asserted the substantial implementation exclusion 

on the basis of the substantial implementation 

during the 2021 proxy season, as compared to 50 

percent and 45 percent during the 2020 and the 

2019 seasons, respectively. 

112 Differences in the types of proposals 

submitted by individual and institutional 

shareholder-proponents could be driving the 

differences in the voting support across these two 

groups. For example, we find that individual 

shareholder-proponents submitted the majority (70 

percent) of voted governance proposals over the 

five-year period, while institutional shareholderproponents submitted the majority (80 percent) of 

voted social and environmental proposals. 

113The percentages in parentheses in each 

column of the table represent percentages of the 

total number of proposals in the first row of each 

column. 

114See supra note 102 for a description of our 

methodology regarding resubmitted proposals. 

TABLE 2—SHAREHOLDER PROPOSAL SUBMISSIONS BY STATUS, 2017–2021 

Proposal status Voted on Omitted Withdrawn Total 

Number ............................................................................................................ 2,362 696 502 3,560 

Company Size: 

S&P 500 ................................................................................................... 1,762 (75%) 543 (78%) 378 (75%) 2,683 (75%) 

All Other .................................................................................................... 600 (25%) 153 (22%) 124 (25%) 877 (25%) 

Proposal Topic: 

Governance .............................................................................................. 1,440 (61%) 362 (52%) 133 (26%) 1,935 (54%) 

Social ........................................................................................................ 669 (28%) 200 (29%) 240 (48%) 1,109 (31%) 

Environmental ........................................................................................... 208 (9%) 73 (10%) 105 (21%) 386 (11%) 

Proponent Type: 

Institution .................................................................................................. 1,058 (45%) 251 (36%) 373 (75%) 1,682 (47%) 

Individual ................................................................................................... 1,090 (46%) 435 (63%) 115 (23%) 1,640 (46%) 

Source: FactSet SharkRepellent Proxy Proposals. 

The counts of omitted proposals in 

Table 2 above represent proposals 

excluded from companies’ proxy 

statements following a no-action letter 

issued by the Commission staff under 

any of the procedural or substantive 

bases in Rule 14a–8. Only a subset of 

these omitted proposals were excluded 

due to the substantial implementation, 

duplication, or resubmission exclusions. 

Based on data in Table 1 above, 

companies asserted the substantial 

implementation, duplication, and 

resubmission exclusion in 

approximately 39 percent, five percent, 

and one percent, respectively, of the noaction requests during the 2021, 2020, 

and 2019 proxy seasons. The staff 

concurred in the exclusion in 42 

percent, 38 percent, and 33 percent of 

these no-action requests on the basis of 

the substantial implementation, 

duplication, and resubmission 

exclusion, respectively. We also note 

that there was variation across the 2021, 

2020, and 2019 proxy seasons with 

respect to companies’ likelihood of 

asserting the substantial 

implementation, duplication, and 

resubmission exclusions and the staff’s 

likelihood of concurring in those 

exclusions. For example, relative to the 

prior two seasons, during the 2021 

proxy season, companies were more 

likely to assert the substantial 

implementation exclusion, but the staff 

concurred in a lower number of these 

requests.111

Table 3 summarizes data on voting 

support across proposal topics and 

proponent types. The average (median) 

shareholder support for voted proposals 

over the five-year sample period was 33 

(32) percent of the total number of votes 

cast, with approximately 15 percent of 

proposals receiving majority support. 

Voting support varied across proposal 

topics and proponent types. In 

particular, governance proposals 

received higher shareholder support on 

average and were more likely to be 

supported by the majority of voting 

shareholders than social and 

environmental proposals. In addition, 

proposals submitted by individual 

proponents received higher shareholder 

support on average and were more 

likely to be supported by the majority of 

voting shareholders than proposals 

submitted by institutional 

proponents.112

TABLE 3—SHAREHOLDER PROPOSAL VOTING SUPPORT, 2017–2021 

Votes cast in favor Proposals 

with majority 

support 

(%) 

Average 

(%) 

Median 

(%) 

All Proposals .............................................................................................................................. 33 32 15 

Proposal Topic: 

Governance ........................................................................................................................ 36 34 18 

Social .................................................................................................................................. 27 27 8 

Environmental ..................................................................................................................... 31 29 14 

Proponent Type: 

Institution ............................................................................................................................ 31 29 14 

Individual ............................................................................................................................. 35 35 16 

Source: FactSet SharkRepellent Proxy Proposals. 

Out of the 3,560 shareholder 

proposals in our data, 2,091 (59 percent) 

were a first submission, 578 (16 percent) 

were a second submission, and the 

remaining 891 (25 percent) were a third 

or subsequent submission (see Table 

4 113 below).114 While companies in the 

S&P 500 index received 75 percent of all 

shareholder proposals, they received a 

higher than proportional percentage of 

proposals that were resubmitted, 

receiving 78 and 91 percent of all 


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115Under Rule 14a–8(i)(12), a future proposal 

addressing ‘‘substantially the same subject matter’’ 

as a voted proposal is considered a resubmission if 

it is submitted for a meeting during the three years 

following the most recent vote. However, when 

estimating the likelihood that a proposal is 

resubmitted, we restrict the analysis above to 

proposals resubmitted in the subsequent year to 

avoid introducing a truncation bias in our analysis 

because we do not observe whether more recent 

proposals are resubmitted in each of the subsequent 

three years. As a result, estimates in Table 5 may 

underestimate the percentage of eligible proposals 

that may eventually be resubmitted. 

116We restrict our sample to proposals submitted 

for 2017–2020 meetings and analyze whether they 

were resubmitted in the following year using data 

from 2018–2021 meetings for two reasons. First, 

because resubmission thresholds were amended in 

2020, we have to apply different thresholds to 

determine proposal eligibility for proposals 

submitted to meetings before and after 2022. See 

supra note 87. Second, because the 2022 proxy 

season is ongoing, we have limited data on 

proposals voted on during 2021 and resubmitted for 

2022 meetings. We include a separate analysis of 

eligibility and resubmission likelihood for 2021 

shareholder proposals in Section III.B.2.b below. 

117See 2020 Adopting Release, supra note 11, at 

70286 n. 451. 

118Using shareholder proposals voted on during 

2017–2020 annual and special meetings, we find 

that only 13 percent of proposals garnering majority 

support were resubmitted in the following year. 

119We estimate that 2,869 shareholder proposals 

were submitted for annual and special meetings 

held from 2017 through 2020, 1,897 (66 percent of 

submitted proposals) were voted on, and 256 (13 

percent of voted proposals) received majority 

support. 

120We estimate that of all of the proposals that 

were voted on during the 2017–2020 period and 

resubmitted in the following year, only 4 percent 

were excludable because their prior voting support 

was below the voting thresholds specified in Rule 

14a–8(i)(12). 

second and third or subsequent 

submissions, respectively. Proposals 

related to governance issues accounted 

for 56 percent of initial and second 

submissions, but a lower percentage (49 

percent) of third or subsequent 

submissions. Proposals related to 

environmental and social issues 

accounted for a higher than proportional 

percentage of third or subsequent 

submissions. First and second 

submissions were close to evenly split 

across individual and institutional 

proponents, but third or subsequent 

submissions were more likely to have 

been submitted by institutional 

proponents. 

TABLE 4—SHAREHOLDER PROPOSALS BY NUMBER OF SUBMISSIONS, 2017–2021 

Submission No. First Second Third or 

subsequent Total 

Number ............................................................................................................ 2,091 578 891 3,560 

Company Size: 

S&P 500 ................................................................................................... 1,423 (68%) 453 (78%) 807 (91%) 2,683 (75%) 

All Other .................................................................................................... 668 (32%) 125 (22%) 84 (9%) 877 (25%) 

Proposal Topic: 

Governance .............................................................................................. 1,180 (56%) 322 (56%) 433 (49%) 1,935 (54%) 

Social ........................................................................................................ 606 (29%) 187 (32%) 316 (35%) 1,109 (31%) 

Environmental ........................................................................................... 187 (9%) 59 (10%) 14 (16%) 386 (11%) 

Proponent Type: 

Institution .................................................................................................. 987 (47%) 267 (46%) 428 (48%) 1,682 (47%) 

Individual ................................................................................................... 989 (47%) 270 (47%) 381 (43%) 1,640 (46%) 

Source: FactSet SharkRepellent Proxy Proposals. 

We next analyze whether shareholderproponents choose to resubmit 

proposals that are eligible to be 

resubmitted for subsequent meetings 

(see Table 5 below).115 For this analysis, 

we consider all proposals that were 

voted on during 2017–2020,116 but 

received less than majority support 

because passing proposals are more 

likely to be implemented 117 by 

companies, resulting in reduced 

incentives for shareholder-proponents 

to resubmit the proposal.118 There were 

1,641 of these shareholder proposals.119

While the vast majority (90 percent) of 

voted shareholder proposals during 

2017–2020 were eligible to be 

resubmitted in the following year, less 

than half (48 percent) of eligible 

proposals were actually resubmitted. 

We find that shareholder proposals 

submitted to companies in the S&P 500 

index were more likely to be 

resubmitted than those submitted to 

companies outside of the S&P 500 

index. Despite being the most likely to 

be eligible for resubmission among the 

three proposal topics groups, 

governance proposals were least likely 

to be resubmitted. We also find that 

shareholders’ propensity to resubmit 

previously voted proposals was 

correlated with the voting support the 

proposal has previously received. In 

particular, comparing between 

shareholder proposals that received 

above and below 20 percent voting 

support and were eligible to be 

resubmitted in the following year, 

proposals with prior support above 20 

percent were 25 percent more likely to 

be resubmitted than proposals with 

prior support below 20 percent. Lastly, 

because shareholder-proponents were 

relatively unlikely to resubmit proposals 

that received voting support below the 

specified vote thresholds in Rule 14a– 

8(i)(12), companies attempted to 

exclude proposals asserting the 

resubmission exclusion in only a few 

instances over this period (see Table 1 

above).120

TABLE 5—PROPOSALS ELIGIBLE FOR RESUBMISSION AND RESUBMITTED, 2017–2020 

Number % Eligible % Resubmitted 

if eligible 

Total ........................................................................................................................................... 1,641 90 48 

Company Size: 

S&P 500 ............................................................................................................................. 1,286 90 52 

All Other .............................................................................................................................. 355 92 31 

Proposal Topic: 

Governance ........................................................................................................................ 936 94 43 

Social .................................................................................................................................. 518 86 58 


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121There is an extensive academic literature on 

the value of shareholder activism, including 

activism through shareholder proposals. See, e.g., 

Matthew R. Denes et al., Thirty Years of 

Shareholder Activism: A Survey of Empirical 

Research, 44 J. Corp. Fin. 405 (2017); for a review. 

See also 2019 Proposing Release, supra note 3, and 

2020 Adopting Release, supra note 11, for an 

extensive discussion of the general economic 

considerations related to shareholder proposals and 

a description of academic literature related to the 

value of shareholder proposals. 

122See, e.g., Vicente Cun ̃ at et al., The Vote Is 

Cast: The Effect of Corporate Governance on 

Shareholder Value, 67 J. Fin. 1943 (2012); Caroline 

Flammer, Does Corporate Social Responsibility 

Lead to Superior Financial Performance? A 

Regression Discontinuity Approach, 61 Mgmt. Sci. 

2549 (2015). Yet, we note that there might be crosssectional variation in the valuation effects of 

shareholder proposals and several recent academic 

papers have identified settings in which 

shareholder proposals have the potential to reduce 

value. For example, one paper found that passing 

shareholder proposals submitted by the most active 

individual sponsors result in negative abnormal 

returns and trigger sales by mutual funds that voted 

against these proposals. See Nickolay Gantchev & 

Mariassunta Giannetti, The costs and benefits of 

shareholder democracy: Gadflies and low-cost 

activism, 34 Rev. Fin. Stud. 5629 (2021). Another 

paper found a negative market reaction to 

shareholder proposals submitted by labor unions in 

years that a new labor contract must be negotiated. 

See John G. Matsusaka et al., Opportunistic 

Proposals by Union Shareholders, 32 Rev. Fin. 

Stud. 3215 (2019). 

123See, e.g., Chen Lin et al., Managerial 

entrenchment and information production, 55 J. 

Fin. & Quantitative Analysis 2500 (2020); Laurent 

Bach & Daniel Metzger, How Do Shareholder 

Proposals Create Value? (Working Paper, Mar. 1, 

2017), available at https://ssrn.com/ 

abstract=2247084. 

124See, e.g., J. Robert Brown, Jr., Corporate 

Governance, Shareholder Proposals, and 

Engagement Between Managers and Owners (Univ. 

of Denv. Sturm Coll. of L., Working Paper No. 17– 

15, 2017), available at https://ssrn.com/ 

abstract=2957998. 

125 In the 2019 Proposing Release, the 

Commission summarized the findings of empirical 

literature that examines whether proposals are 

economically beneficial by studying short-run 

abnormal stock returns around key events related to 

shareholder proposals. See 2019 Proposing Release, 

supra note 3, at 66495. The main events related to 

shareholder proposals studies in academic 

literature comprise the initial press announcement 

of submission of a shareholder proposal, the proxy 

mailing date, and the date of the shareholder 

meeting. See 2020 Adopting Release, supra note 11, 

at 70285, for a description of limitations associated 

with using short-term market reactions to measure 

the benefits of shareholder proposals. 

126 In particular, to the extent applicable, 

companies incur costs to: (i) review the proposal 

and address issues raised in the proposal; (ii) 

engage in discussions with the shareholderproponent(s); (iii) print and distribute proxy 

materials, and tabulate votes on the proposal; (iv) 

communicate with proxy advisory firms and 

shareholders (e.g., proxy solicitation costs); (v) if 

they intend to exclude the proposal, file a notice 

with the Commission; and (vi) prepare a rebuttal to 

the submission to the Commission. See 2020 

Adopting Release, supra note 11, at 70272–70275, 

for a detailed discussion of the costs to companies. 

We recognize that there is variation in the costs 

associated with responding to shareholder 

proposals and that some costs that companies incur 

are mandatory, while others are discretionary. As a 

result, the 2020 Adopting Release used a range of 

estimates, $20,000–$150,000, as a measure of the 

direct costs to companies associated with 

addressing a singular shareholder proposal. See 

2020 Adopting Release, supra note 11, at 70274. We 

also note that the cost of addressing a resubmission 

may be lower than the cost of addressing a first-time 

proposal. See 2019 Proposing Release, supra note 

3, at 66496. Lastly, the costs associated with the 

Continued 

TABLE 5—PROPOSALS ELIGIBLE FOR RESUBMISSION AND RESUBMITTED, 2017–2020—Continued 

Number % Eligible % Resubmitted 

if eligible 

Environmental ..................................................................................................................... 155 88 47 

Proponent Type: 

Institution ............................................................................................................................ 790 89 48 

Individual ............................................................................................................................. 732 92 46 

Source: FactSet SharkRepellent Proxy Proposals. 

C. Potential Costs and Benefits 

Below we discuss the potential 

economic effects of the proposed 

amendments. Section III.C.1 discusses 

economic considerations relevant to 

shareholder proposals generally, while 

the remaining three sections discuss the 

economic effects related to the proposed 

amendments to Rule 14a–8(i)(10), Rule 

14a–8(i)(11), and Rule 14a–8(i)(12), 

respectively. 

1. General Economic Considerations 

Relevant to Shareholder Proposals 

In this section, we describe the 

general economic considerations related 

to the shareholder proposal process. The 

value of including a shareholder 

proposal in a company’s proxy 

statement for shareholder consideration 

and vote at a meeting depends 

fundamentally on the tradeoff between 

the potential for improving a company’s 

future performance and the costs 

associated with the submission and 

consideration of a shareholder proposal 

borne by the company and its nonproponent shareholders.121 A 

shareholder proposal could improve a 

company’s performance because it 

could motivate a value-enhancing 

corporate policy change,122 limit 

insiders’ entrenchment,123 and provide 

management with information about the 

views of shareholders.124 The value of 

shareholder proposals is limited by the 

extent to which shareholders participate 

in the voting process and the extent to 

which management implements 

proposals with broad shareholder 

support. In this regard, we note that 

shareholder proposals typically are nonbinding on the company, even if they 

are approved by a shareholder vote. Our 

economic analysis does not speak to 

whether any particular shareholder 

proposal is value-enhancing, whether 

the proposed amendments would result 

in the inclusion of value-enhancing 

proposals, or whether the proposed 

amendments would have a 

disproportionate effect on proposals that 

are more or less value-enhancing. 

There are significant methodological 

and empirical challenges to measuring 

the value of including a shareholder 

proposal in a company’s proxy 

statement and thus any potential 

benefits that may result from the 

inclusion of additional shareholder 

proposals in the proxy statement. For 

example, it is often difficult to isolate 

the effect of a singular shareholder 

proposal on a company’s stock price 

from the effects of other items that are 

contemporaneously considered and 

voted on at a shareholder meeting or 

from the effects of direct engagement 

between shareholders and management. 

In addition, stock price changes 

following a proposal submission or vote 

may capture various effects such as 

signaling effects (e.g., the submission of 

a proposal may signal that the targeted 

company is underperforming or that the 

initial negotiations between the 

proponent and company failed), market 

expectations regarding the voting 

outcome, and market expectations 

regarding the probability of 

implementation of a proposal. 

Nevertheless, academic literature has 

attempted to measure the value of 

shareholder proposals and how this 

value varies with proposal topic and 

proponent type by studying the stock 

price reaction around announcements 

associated with shareholder 

proposals.125

At the same time, companies may 

bear both direct costs and opportunity 

costs associated with the submission of 

a shareholder proposal, and these costs 

may be passed on to shareholders.126


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submission of a shareholder proposal may include 

opportunity costs and thus may be larger than the 

estimates used in the 2020 Adopting Release. See 

2020 Adopting Release, supra note 11, at 70266 

n.295. 

127See 2020 Adopting Release, supra note 11, at 

70272–70273 n. 332, 339. 

128See 2020 Adopting Release, supra note 11, at 

70276–70277, for a detailed discussion of the costs 

to non-proponent shareholders. Although these 

costs may be difficult to quantify, many 

institutional investors retain proxy advisory firms 

to perform a variety of services to reduce the 

burdens associated with proxy voting decisions, 

including voting decisions on shareholder 

proposals. We have limited data on fees charged by 

proxy voting advisory firms but note that one such 

proxy advisory firm, ISS, reports a fee ranging from 

$5,000 to above $1,000,000 per client on Form 

ADV. However, we note that this fee covers a broad 

range of services provided by ISS (e.g., voting 

services, governance research, ratings provision, 

etc.) and includes proxy voting advice services 

related to board elections and management 

proposals. See 2020 Adopting Release, supra note 

11, at 70277 n.369, for a detailed discussion of the 

costs to non-proponent shareholders. In addition to 

costs associated with obtaining proxy voting advice 

for institutional investors, retail shareholders may 

incur direct costs and both retail and institutional 

non-proponent shareholders may incur opportunity 

costs related to shareholder proposals. However, we 

do not have data that would allow us to reliably 

estimate these costs. 

129Under Rule 14a–8(b)(iii), shareholderproponents are required to submit a written 

statement stating their availability to discuss their 

proposal with the company. As a result, in addition 

to the costs associated with proposal preparation, 

shareholder-proponents may incur some costs 

associated with: (i) disclosing the times the 

proponents will be available to communicate with 

management as well as preparing to communicate 

and communicating with management and (ii) the 

opportunity costs associated with setting aside and 

spending time to communicate with management 

instead of engaging in other activities. We do not 

have data that would allow us to reliably estimate 

these costs. 

130We recognize that some uncertainty regarding 

the application of the substantial implementation 

exclusion may remain because the determination of 

whether elements of a proposal are essential may 

vary across proposals. 

131Table 2 above shows that during the five-year 

period, 2017–2021, companies in the S&P 500 index 

received 75 percent of submitted shareholder 

proposals. See also Soltes et al. (2017), supra note 

110 (finding that companies that submit no-action 

requests proposals tend to be larger and receive 

more proposals on average). 132See supra Section III.B.2. 

Several commenters to the 2020 

amendments noted that no-action 

correspondence represents the most 

substantial cost companies incur related 

to shareholder proposals.127

Shareholders other than the 

shareholder-proponent may also bear 

costs associated with their own 

consideration of a shareholder 

proposal.128 Finally, shareholderproponents bear costs associated with 

preparing a shareholder proposal, 

submitting a proposal to be included in 

a company’s proxy statement and, as 

applicable, engaging with management 

following proposal submission.129

2. Rule 14a–8(i)(10)—Substantial 

Implementation 

As discussed in Section II.A.2, we are 

proposing to amend Rule 14a–8(i)(10) to 

state that a proposal may be excluded as 

substantially implemented ‘‘[i]f the 

company has already implemented the 

essential elements of the proposal.’’ The 

proposed amendment’s modification to 

the definition of ‘‘substantial 

implementation’’ to focus on the 

‘‘essential elements’’ of a proposal 

would set forth a more objective and 

more specific standard for excluding 

proposals than the existing rule 

language. By providing the staff with a 

more objective and specific framework 

for analyzing the exclusion when 

reviewing and responding to no-action 

requests, we believe that the amended 

standard should result in no-action 

positions that are more predictable and 

consistent than under the current rule. 

Increased transparency and reduced 

uncertainty around the application of 

Rule 14a–8(i)(10) would benefit 

companies by facilitating more informed 

decision-making when considering 

whether to exclude a proposal.130 In 

particular, companies may be better able 

to weigh the costs and benefits of 

seeking a no-action letter, especially in 

instances in which the staff is unlikely 

to agree with the application of the 

exclusion because a company has 

implemented some but not all of the 

essential elements of an earlier 

proposal. As we noted above, costs to 

companies associated with no-action 

requests can be significant.131 In turn, to 

the extent that companies seek noaction letters less frequently as a result 

of the proposed amendment, because 

they conclude that seeking such letters 

would not be successful, they may incur 

lower costs related to shareholder 

proposal submissions. The proposed 

amendment could have a greater effect 

on larger companies because a larger 

company is more likely to receive a 

shareholder proposal and is also more 

likely on average to submit a no-action 

request than a smaller company. On the 

other hand, costs related to shareholder 

proposals may be a relatively smaller 

percentage of the total cost of operations 

for larger companies than for smaller 

companies. 

The reduced uncertainty around 

proposal excludability could also 

benefit shareholder-proponents by 

facilitating more informed decisionmaking when considering whether to 

submit a proposal. In particular, the 

ability to better predict the staff’s noaction positions may allow shareholderproponents to avoid submitting 

proposals when the essential elements 

have already been implemented by a 

company and that would be unlikely to 

be permitted to go to a shareholder vote. 

In addition, the increased transparency 

and reduced uncertainty of the 

application of the proposed amendment 

coupled with companies potentially 

seeking no-action letters less frequently 

may lead shareholder-proponents to 

benefit from having to spend less time 

and fewer resources to reply to 

companies’ no-action requests. 

We expect that the proposed 

amendment will result in more 

consistent determinations under Rule 

14a–8(i)(10) across proposals and over 

time. Current exclusion determinations 

can vary, which may contribute to the 

variability in the number of shareholder 

proposals included in companies’ proxy 

statements.132 Consequently, we expect 

the increased consistency of exclusion 

determinations resulting from the 

proposed amendment to reduce the 

variability in the number of shareholder 

proposals included in companies’ proxy 

statements. 

Whether the proposed amendment 

has an effect on the number of proposals 

submitted and included in companies’ 

proxy statements in any given proxy 

season going forward depends on a 

number of factors, including whether 

and how companies and shareholderproponents change their behavior as a 

result of the proposed amendment. 

While we do not have data that would 

allow us to assess the extent to which 

companies and shareholder-proponents 

may change their behavior in response 

to the proposed amendment to Rule 

14a–8(i)(10), we qualitatively describe 

below how potential changes in 

behavior may impact the number of 

proposals submitted and included in 

companies’ proxy statements. In 

particular, companies could modify 

their behavior around proposal 

implementation or shareholderproponents could modify their behavior 

around proposal submission in response 

to this proposed amendment. For 

example, companies might take into 

account that implementing the essential 

elements of a prior proposal could 

preclude a subsequent proposal with the 

same essential elements from being 

considered in a future meeting, while 

implementation of some of the elements 

of a proposal but not all of the essential 

elements could result in recurring future 

votes on a proposal that contains 

essential elements that were not 

implemented. However, we recognize 

that companies (and shareholderproponents) may continue to encounter 

some uncertainty when seeking to 

determine whether the essential 


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133We recognize that some uncertainty regarding 

the application of the duplication exclusion may 

remain because the determination of whether the 

objectives or means of two or more proposals are 

the same may vary across proposal characteristics. 

134 During the 2021, 2020, and 2019 proxy 

seasons, the staff received 12, 9, and 16 no-action 

requests, respectively, asserting the duplication 

exclusion. Companies asserted the duplication 

exclusion in approximately five percent of noaction requests submitted over these three proxy 

seasons. As of May 10, 2022, the staff has received 

22 no-action requests asserting the duplication 

exclusion, accounting for approximately nine 

percent of no-action requests submitted up until 

that point during the 2022 proxy season. 

135We expect that the likelihood that proponents 

observe concurrently submitted proposals has been 

further reduced with the 2020 amendments to Rule 

14a–8(c), which limited the ability of a single 

representative to submit multiple shareholder 

proposals on behalf of multiple shareholders to the 

same meeting. See 2020 Adopting Release, supra 

note 11. 

136See supra note 14. 

137 Institutional investors may choose to rely on 

proxy advisory firms to analyze similar, but not 

duplicative, proposals and determine whether they 

should vote on these proposals in a similar way. 

See supra note 128. 

elements of a prior proposal have been 

implemented. To the extent that 

companies become more likely to 

implement all of the essential elements 

of a proposal, the number of proposals 

included in companies’ proxy materials 

could decrease. 

Conversely, knowing that a proposal 

containing essential elements that the 

company had not already implemented 

is unlikely to be excludable under the 

amended standard, shareholderproponents could draft a proposal to 

focus on these essential elements and in 

turn, increase the likelihood of this 

proposal appearing in a company’s 

proxy statement. Such changes in 

shareholder-proponent behavior could 

result in an increase shareholder 

proposals submitted and included in 

companies’ proxy statements. 

Because we cannot reliably predict 

whether and the extent to which 

companies and shareholder-proponents 

may change their behavior in response 

to the proposed amendment to Rule 

14a–8(i)(10), the effect of the proposed 

amendment on the number of 

shareholder proposals and the 

distribution of shareholder proposal 

types is unclear. Lastly, for reasons 

explained above in Section III.C.1, we 

cannot reliably predict whether any 

potential change in the number of 

shareholder proposals submitted or 

included in companies proxy statements 

will result in net benefits or costs to 

companies and shareholders. 

3. Rule 14a–8(i)(11)—Duplication 

As discussed in Section II.B.2, we are 

proposing to amend Rule 14a–8(i)(11) to 

indicate that a proposal ‘‘substantially 

duplicates’’ another proposal that will 

be included in the company’s proxy 

materials for the same meeting if it 

‘‘addresses the same subject matter and 

seeks the same objective by the same 

means.’’ We expect that the proposed 

amendment would provide the staff a 

more objective and specific framework 

for applying the duplication exclusion 

when reviewing and responding to noaction requests than the existing rule 

language, thereby reducing uncertainties 

with respect to the application of the 

exclusion and promoting more 

predictable and consistent 

determinations.133

We expect the benefits to companies 

and their non-proponent shareholders 

would be qualitatively similar to those 

described in Section III.C.2 above with 

respect to Rule 14a–8(i)(10) because 

greater predictability and certainty 

about the application of Rule 14a– 

8(i)(11) could facilitate more informed 

decision-making around the submission 

of a no-action request. For example, 

companies may be better able to weigh 

the costs and benefits of seeking a noaction letter, especially in instances 

where the staff is unlikely to agree with 

the application of the exclusion because 

a proposal that the company is seeking 

to exclude has a different subject matter 

or different objectives or means as those 

in another proposal that is to be 

included in the proxy statement, and is 

thus, not ‘‘substantially duplicative.’’ 

We note, however, that quantitatively 

these benefits could be less pronounced 

than those described in Section III.B.2 

with respect to Rule 14a–8(i)(10) since 

companies have been less likely to 

assert Rule 14a–8(i)(11) as the basis for 

exclusion than Rule 14a–8(i)(10).134

Also, for the same reasons as those 

described in Section III.B.2, this 

proposed amendment may have a 

differential effect on larger and smaller 

companies. The extent to which greater 

predictability and certainty around 

determinations under the proposed 

amendment to Rule 14a–8(i)(11) could 

benefit shareholder-proponents in 

drafting proposals would be limited 

because proponents are unlikely to 

observe the content of other proposals 

that are concurrently submitted for 

inclusion in the same proxy statement 

during their own proposal 

preparation.135

Similarly to the discussion of the 

proposed Rule 14a–8(i)(10) amendments 

above, we expect the proposed 

amendment to Rule 14a–8(i)(11) to 

reduce the variability in the number of 

shareholder proposals included in 

companies’ proxy statements from one 

proxy season to the next, but we cannot 

reliably predict how the number of 

shareholder proposals submitted or 

included in companies’ proxy 

statements might change. In particular 

the number of shareholder proposals 

could change to the extent that 

shareholder-proponents could modify 

their behavior in response to this 

proposed amendment. For example, a 

shareholder-proponent potentially 

could draft a proposal to be more 

particular regarding its objectives or 

means so as to minimize the likelihood 

of those objectives or means being 

deemed the same objectives or means as 

those in another proposal that 

potentially could be submitted on the 

same subject matter for the same 

shareholder meeting. However, the 

possibility of such changes in proponent 

behavior likely would be mitigated by 

proponents’ consideration of the 

micromanagement exclusion under Rule 

14a–8(i)(7), among other 

considerations.136 While this potential 

change in proponent behavior could 

result in more shareholder proposals 

included in companies’ proxy 

statements, we do not have data that 

would allow us to assess the likelihood 

of proponent behavior changes or 

quantify the potential increase in the 

number of proposals. 

If the number of shareholder 

proposals included in companies’ proxy 

statements increases, the likelihood of 

multiple shareholder proposals dealing 

with the same or similar subject matter 

but having different objectives and/or 

means appearing in the same proxy 

statement could increase. This change 

could lead to shareholder confusion or 

the need for shareholders to spend 

additional time and resources to review 

and compare the similar, but not 

duplicative, proposals.137 In addition, 

companies may face implementation 

challenges and costs if shareholders 

approve multiple similar, but not 

duplicative, proposals. However, if 

shareholder consideration of similar, 

but not duplicative, proposals leads to 

greater support for and improved 

likelihood of implementation of a 

proposal that aligns more closely with 

the objectives of shareholders, then 

shareholders could benefit. 

4. Rule 14a–8(i)(12)—Resubmissions 

As discussed in Section II.C.2, we are 

proposing to amend Rule 14a–8(i)(12) to 

revise the standard for what constitutes 

a resubmission from a proposal that 

‘‘addresses substantially the same 

subject matter’’ as a prior proposal to a 

proposal that ‘‘substantially duplicates’’ 

a prior proposal, defined the same way 

that phrase is defined in the proposed 


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138See supra Section III.C.3. 

139 During the 2021, 2020, and 2019 proxy 

seasons, the staff received 2, 3, and 1 no-action 

requests, respectively, asserting the resubmission 

exclusion. Companies asserted the resubmission 

exclusion in less than one percent of no-action 

requests submitted over these three proxy seasons. 

As of May 10, 2022, the staff has received 11 noaction requests asserting the resubmission 

exclusion, accounting for approximately five 

percent of no-action requests submitted up until 

that point during the 2022 proxy season. 

140See supra note 120. 

141See supra note 139. 

142See supra note 54 and the accompanying text. 

143See supra note 126. 

144See supra notes 100 and 101 for a description 

of how we grouped proposals into governance, 

social, and environmental categories, and 

proponent types. 

amendment to Rule 14a–8(i)(11).138 As 

with the proposed amendments to Rule 

14a–8(i)(10) and Rule 14a–8(i)(11) 

described above, we expect that the 

proposed amendment would provide 

the staff with a more objective and 

specific framework for applying the 

resubmission exclusion when reviewing 

and responding to no-action requests 

than the existing rule language, thereby 

reducing uncertainties with respect to 

the application of the exclusion and 

promoting more predictable and 

consistent determinations. 

We expect the benefits to companies 

and their non-proponent shareholders to 

be qualitatively similar to those 

described in Section III.C.2 and Section 

III.C.3 above because greater 

predictability and certainty about the 

application of Rule 14a–8(i)(12) could 

facilitate more informed decisionmaking around the submission of a noaction request. The proposed 

amendments could also benefit 

shareholder-proponents by facilitating 

more informed decision-making when 

preparing a shareholder proposal for 

submission. In particular, the ability to 

better predict the staff’s no-action 

positions may allow shareholderproponents to avoid spending time and 

resources on submitting a proposal that 

substantially duplicates a prior proposal 

that has failed to meet the rule’s 

specified vote thresholds and that likely 

would be excluded from a company’s 

proxy statement. However, we do not 

expect these benefits to companies and 

their shareholder-proponents to be large 

because very few proposals are 

currently excluded from companies’ 

proxy statements on the basis of Rule 

14a–8(i)(12).139

Similarly to the discussion above of 

the proposed amendments to Rule 14a– 

8(i)(10) and Rule 14a–8(i)(11), we 

cannot reliably predict the extent to 

which shareholder-proponents might 

modify their behavior in response to 

this proposed amendment, and we 

cannot quantify how the number of 

proposals submitted and included in 

companies’ proxy statements could 

change as a result. However, we note 

that potential changes in shareholderproponents’ behavior could increase the 

number of proposals submitted and 

included in companies’ proxy 

statements. Currently, shareholderproponents may refrain from submitting 

a shareholder proposal dealing with 

substantially the same subject matter as 

an earlier proposal if the earlier 

proposal failed to garner sufficient 

levels of support to satisfy the 

resubmission thresholds because they 

may recognize that such a proposal is 

likely to be excluded from the 

company’s proxy statement under Rule 

14a–8(i)(12).140 This appears to have led 

to a relatively low number of no-action 

requests seeking to rely on the 

resubmission exclusion.141 Under the 

proposed amendment, a proponent 

could change the objective or the means 

of a previously submitted proposal 

about the same subject matter so as to 

allow for it to be considered an initial 

submission instead of a resubmission. 

Shareholder-proponents might be more 

likely to do this in instances where 

circumstances at the company have 

changed from one year to the next and, 

due to those circumstances, where a 

similar but not duplicative proposal 

may garner significantly more votes 

than a prior proposal. At the same time, 

by reducing the potential for the 

‘‘umbrella’’ effect of the resubmission 

exclusion, the proposed amendment 

could result in the inclusion of multiple 

proposals submitted by differing 

proponents offering different objectives 

or means to address the same issue.142

The proposed amendment to the 

resubmission exclusion could result in 

benefits to shareholder-proponents to 

the extent that that there is an increase 

in the number of proposals included in 

companies’ proxy statements and 

shareholder-proponents submit only 

those proposals that are net beneficial to 

them. The increase in the number of 

submitted proposals could also result in 

benefits to companies and their nonproponent shareholders if these 

additional proposals lead to valueenhancing changes. To the extent that 

the proposed amendment would 

facilitate proponents experimenting and 

making adjustments to previously 

submitted proposals to build broader 

support, the amendment could also lead 

to proposals that align more closely 

with the objectives of shareholders to be 

put to a shareholder vote. Voting 

outcome data for these additional 

proposals could further inform 

management about shareholder views, 

allowing it to consider actions that are 

of greater importance across larger 

swaths of the shareholder base and 

potentially leading to improved 

efficiency in the managementshareholder engagement process. On the 

other hand, the potential increase in the 

number of submitted shareholder 

proposals could translate to increased 

costs to companies associated with the 

consideration of proposals, engagement 

with shareholder-proponents, or 

proposal inclusion in the proxy 

statement and increased costs to nonproponent shareholders associated with 

their own consideration of shareholder 

proposals.143 Further, the potential 

increase in the number of submitted 

proposals could result in additional 

costs to companies and their nonproponent shareholders if these 

additional proposals lead to changes 

that reduce companies’ future 

performance. 

Lastly, because voting outcomes and 

shareholder-proponents’ propensity to 

resubmit previously voted-on proposals 

varies across proposal topics and 

proponent types, this amendment may 

impact certain proposal categories and 

certain proponent types more than 

others. In particular, subject to specific 

facts and circumstances, the proposed 

amendment may have a greater effect on 

environmental proposals and proposals 

submitted by institutional proponents 

because these types of proposals are less 

likely to be eligible for resubmission 

following the 2020 amendments to the 

voting thresholds in Rule 14a–8(i)(12) 

than governance and social proposals 

and proposals submitted by individual 

proponents, respectively.144

D. Anticipated Effects on Efficiency, 

Competition, and Capital Formation 

By making exclusion determinations 

more certain and predictable and 

enabling companies and shareholderproponents to make more informed 

decisions around the submission of a 

no-action request and submission of a 

proposal, respectively, we expect the 

proposed amendments to improve 

efficiency. Specifically, the proposed 

amendments could allow companies to 

avoid inefficiently using time and 

resources to attempt to exclude a 

shareholder proposal from proxy 

statements in instances in which the 

proposed amendments would not 

permit exclusion. Similarly, the 

proposed amendments could allow 

shareholder-proponents to avoid 

inefficiently using time and resources to 

prepare a proposal submission that 


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145See supra notes 122–124 and the 

accompanying text. 

146See supra note 126. 

147Using shareholder proposals that were voted 

on in meetings held in 2017–2021 and controlling 

for proposal topic, we find a positive but not 

statistically significant correlation between the 

numbers of co-proponents and the voting support 

a proposal received. 

148See 2019 Proposing Release, supra note 3, at 

66488 n. 188. 

likely will be excluded from a 

company’s proxy statement. 

The proposed amendments could lead 

to additional effects on efficiency and 

capital formation as a result of the 

potential changes in companies’ and 

shareholder-proponents’ behavior 

leading to a change in the number and 

characteristics of proposals included in 

companies’ proxy statements. For 

example, the proposed amendments 

could further improve efficiency and 

increase capital formation if additional 

included shareholder proposals result in 

value-enhancing policy changes or 

provide additional information to 

management about shareholder 

views.145 On the other hand, companies 

may bear costs associated with 

considering and addressing additional 

proposals, leading to a potential 

reduction in efficiency and capital 

formation.146

Because the potential costs and 

benefits of the proposed amendments 

may be greater for certain companies, 

the proposed amendments could result 

in competitive effects. For example, the 

proposed amendment could have a 

greater effect on U.S. public companies 

relative to those that are not subject to 

the federal proxy rules, namely foreign 

companies and U.S. private companies. 

Further, the proposed amendments 

could have a greater effect on larger 

public companies relative to smaller 

public companies because larger public 

companies are more likely to receive 

shareholder proposals. These 

competition effects could, for instance, 

arise through the capital formation 

channel described above. However, 

because the proposed amendments 

could result in greater benefits but also 

greater costs to certain companies, we 

cannot reliably predict whether and 

how the competitive position of these 

companies may change as a result of the 

proposed amendments. 

E. Reasonable Alternatives 

1. Rule 14a–8(i)(10)—Substantial 

Implementation 

We considered a number of 

alternative approaches to amending 

Rule 14a–8(i)(10). First, we considered 

proposing a change to the rule that 

would require a proposal to be fully 

implemented in exactly the way a 

proponent describes it in the proposal 

for it to be excludable from a company’s 

proxy statement. The benefit of this 

approach is that it would be a standard 

that is more predictable in application 

because it would not require a 

determination of which elements of the 

proposal are essential. We expect that 

this alternative could lead to greater 

consistency and predictability of 

determinations under Rule 14a–8(i)(10). 

Further, because a full implementation 

standard would be more straightforward 

for companies and proponents to 

understand and apply, it may be more 

likely to result in a lower number of noaction requests than under the proposed 

amendments. However, this alternative 

could result in more shareholder 

proposals appearing in a company’s 

proxy statement relative to the proposed 

amendment even if the differences 

between a shareholder-proponent’s 

preferred policies and the policies that 

the company has already implemented 

are only minimal. The full 

implementation alternative would be 

likely to result in relatively greater costs 

associated with companies’ addressing 

and non-proponent shareholders’ 

consideration of these additional 

proposals. 

We also considered various other 

formulations of what would be 

considered ‘‘substantially 

implemented,’’ such as if the company 

has already: 

(1) Effected substantially all of what 

the proposal requests; 

(2) Addressed substantially all of the 

underlying concerns of the proposal; or 

(3) Implemented the essential 

objectives of the proposal. 

All three of these alternatives may 

require a more fact-intensive analysis 

(e.g., delineating ‘‘what the proposal 

requests’’ or its ‘‘underlying concerns’’ 

or ‘‘essential objectives’’ and 

determining whether the company has 

‘‘substantially’’ addressed them) 

compared to the proposed amendment. 

Further, in the second and third 

alternatives, the analysis may not be 

sufficiently focused on the specific 

elements of the proposal, which may 

not serve the purpose of the exclusion 

to avoid the consideration of proposals 

on which a company has already 

‘‘favorably acted.’’ We expect that all 

three alternative standards would be 

difficult to apply in a consistent and 

predictable manner. As a result, 

companies and shareholders would 

potentially experience greater 

uncertainty with respect to the 

application of the substantial 

implementation exclusion under such 

alternatives relative to the proposed 

amendment. 

2. Rule 14a–8(i)(11)—Duplication 

As an additional change to the 

proposed amendment to Rule 14a– 

8(i)(11), we considered changing the 

existing first-in-time standard to instead 

provide for the exclusion of the 

duplicative proposal that has fewer coproponents. As with the first-in-time 

standard, this alternative would provide 

an objective criterion for exclusion of a 

proposal. By focusing on the number of 

co-proponents, this alternative would 

place an emphasis on the potential 

breadth of shareholder support a 

proposal might receive. However, we 

find little evidence in the data that the 

number of co-proponents is positively 

associated with the level of support for 

a proposal.147 Further, this alternative 

approach would not provide a 

methodology for determining which 

proposal should be excluded in cases in 

which duplicative proposals have the 

same number of co-filers. We also 

considered changing the existing firstin-time standard to instead provide for 

the exclusion of the duplicative 

proposal that has fewer number of 

shares held by a proponent or coproponents. However, a proponent’s 

ownership or the aggregate ownership of 

co-proponents may not be correlated 

with the eventual level of shareholder 

support a proposal may receive.148

Lastly, we expect that the potential 

benefits associated with changing the 

first-in-time standard to one of the 

alternatives described above, beyond 

those of the proposed amendment, 

would be minimal because the proposed 

amendment alone may reduce the 

incentives for proponents to submit a 

proposal quickly or reduce the 

incentives for proponents to attempt to 

preempt other proposals those 

proponents do not agree with and in 

turn, address the concerns associated 

with the first-in-time standard of the 

duplication exclusion. 

3. Rule 14a–8(i)(12)—Resubmissions 

As an alternative to the proposed 

amendment to Rule 14a–8(i)(12), we 

considered returning to the pre-1983 

standard defining a resubmission as 

‘‘substantially the same proposal’’ and 

interpreting that to mean a proposal that 

is virtually identical (in form as well as 

substance) to a proposal previously 

included in the company’s proxy 

materials. This alternative may be easier 

to apply relative to the proposed 

amendments because it would not 

involve a determination about the 

objectives and means of a proposal. We 

would expect that such an alternative 


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149 44 U.S.C. 3501 et seq. 

150 44 U.S.C. 3507(d) and 5 CFR 1320.11. 

could to lead to a greater consistency 

and predictability of determinations 

under Rule 14a–8(i)(12) and potentially 

result in fewer no-action requests. 

However, as discussed in Section II.C, 

reverting to the pre-1983 standard 

would re-introduce the concern 

previously acknowledged by the 

Commission that a shareholderproponent could make some minor 

changes to a previously submitted 

proposal so as to not have the proposal 

excluded. In turn, this alternative could 

result in the inclusion of proposals in 

companies’ proxy statements that have 

little potential for obtaining broader or 

majority support in the near term, 

which could result in greater costs for 

companies and their shareholders. 

F. Request for Comment 

We request comment on all aspects of 

our economic analysis, including the 

potential costs and benefits of the 

proposed amendments and alternatives 

thereto, and whether the amendments, if 

adopted, would promote efficiency, 

competition, and capital formation. 

Commenters are requested to provide 

empirical data, estimation 

methodologies, and other factual 

support for their views, in particular, on 

costs and benefits estimates. In addition, 

we request comments on our selection 

of data sources, empirical methodology, 

and the assumptions we have made 

throughout the analysis. In addition, we 

request comment on the following: 

1. Are there any entities that would be 

affected by the proposed amendments 

that are not discussed in the economic 

analysis? In which ways are those 

entities affected by the proposed 

amendments? Please provide an 

estimate of the number of any additional 

affected entities. 

2. Are there any costs or benefits of 

the proposed amendments that are not 

discussed in the economic analysis? If 

so, please describe the types of costs 

and benefits and provide a dollar 

estimate of these costs and benefits. 

3. We have provided a qualitative 

analysis of the costs and benefits of the 

proposed amendments. What would be 

the quantitative impact of the proposed 

amendments? Please provide data about 

or dollar estimates of the costs and 

benefits as they relate to proponents, 

companies, and non-proponent 

shareholders. 

4. What would be the effects of the 

proposed amendments, including any 

effects on efficiency, competition, and 

capital formation? Would the proposed 

amendments be beneficial or 

detrimental to proponents, companies, 

and the companies’ non-proponent 

shareholders, and why in each case? 

5. Could the proposed amendments to 

Rule 14a–8(i)(10), Rule 14a–8(i)(11), or 

Rule 14a–8(i)(12) allow companies to 

make more informed decisions around 

inclusion or exclusion of proposals and 

the submission of no-action requests? 

Would companies submit fewer noaction requests to the Commission’s 

staff as a result of the proposed 

amendments? Could there be a cost 

savings to companies associated with 

companies no longer attempting to 

exclude proposals that are unlikely to be 

excludable under Rule 14a–8(i)(10), 

Rule 14a–8(i)(11), or Rule 14a–8(i)(12)? 

6. Could the proposed amendments to 

Rule 14a–8(i)(10), Rule 14a–8(i)(11), or 

Rule 14a–8(i)(12) allow shareholderproponents to make more informed 

decisions around submitting proposals? 

Would shareholder-proponents submit 

different proposals in terms of subject 

matter and/or quantity as a result? 

Could the proposed amendments benefit 

shareholder-proponents by allowing 

them to avoid submitting proposals that 

are likely to be excludable under Rule 

14a–8(i)(10), Rule 14a–8(i)(11), or Rule 

14a–8(i)(12)? 

7. How might companies and 

shareholder-proponents change their 

behavior in response to the proposed 

amendments to Rule 14a–8(i)(10), Rule 

14a–8(i)(11), or Rule 14a–8(i)(12)? How 

might these changes in behavior affect 

the number and characteristics of 

proposals submitted and included in 

companies’ proxy statements? How 

might these changes in behavior impact 

the distribution of proposal topics 

submitted and included in companies’ 

proxy statements? Would these changes 

result in benefits or costs to companies, 

proponents, and non-proponent 

shareholders? 

8. We described in Section III.E above 

a number of alternative approaches or 

additional changes to the proposed 

amendments that we considered. Are 

there any costs or benefits to these 

alternatives that are not discussed in the 

economic analysis? If so, please describe 

the types of costs and benefits and 

provide a dollar estimate of these costs 

and benefits. 

9. Are there additional alternatives to 

the proposed amendments that we 

should consider? If so, please describe 

the types of costs and benefits of these 

additional alternatives and provide a 

dollar estimate of these costs and 

benefits. 

IV. Paperwork Reduction Act 

A. Summary of the Collection of 

Information 

Certain provisions of our rules and 

schedules that would be affected by the 

proposed amendments contain 

‘‘collection of information’’ 

requirements within the meaning of the 

Paperwork Reduction Act of 1995 

(‘‘PRA’’).149 We are submitting the 

proposed amendments to the Office of 

Management and Budget (‘‘OMB’’) for 

review in accordance with the PRA.150

The hours and costs associated with 

preparing, filing, and sending the 

schedules, including preparing 

documentation required by the 

shareholder-proposal process, constitute 

paperwork burdens imposed by the 

collection of information. An agency 

may not conduct or sponsor, and a 

person is not required to comply with, 

a collection of information requirement 

unless it displays a currently valid OMB 

control number. Compliance with the 

information collection is mandatory. 

Responses to the information collection 

are not kept confidential, and there is no 

mandatory retention period for the 

information disclosed. The title for the 

affected collection of information is: 

‘‘Regulation 14A (Commission Rules 

14a–1 through 14a–21 and Schedule 

14A)’’ (OMB Control No. 3235–0059). 

We adopted the existing regulations 

and schedule pursuant to the Exchange 

Act. The regulations and schedule set 

forth the disclosure and other 

requirements for proxy statements filed 

by issuers and other soliciting parties. A 

detailed description of the proposed 

amendments, including the need for the 

information and its proposed use, as 

well as a description of the likely 

respondents, can be found in Section II 

above, and a discussion of the expected 

economic effects of the proposed 

amendments can be found in Section III 

above. 

B. Summary of the Proposed 

Amendments’ Effects on the Collection 

of Information 

As discussed in Section II above, the 

proposed amendments are intended to 

provide a clearer framework for the 

application of three of the substantive 

bases for the exclusion of shareholder 

proposals under Rule 14a–8. The 

proposed amendments to Rule 14a– 

8(i)(10), 14a–8(i)(11), and 14a–8(i)(12) 

would provide greater certainty and 

transparency to shareholders and 

companies as they evaluate whether 

these bases would apply to particular 

proposals. 


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151These numbers reflect the Commission’s 

current OMB PRA filing inventory. The OMB PRA 

filing inventory represents a three-year average. 

Averages may not align with the actual number of 

filings in any given year. 

152 5 U.S.C. 801 et seq. 

153 5 U.S.C. 601 et seq. 

154 5 U.S.C. 603(a). 

C. Incremental and Aggregate Burden 

and Cost Estimates for the Proposed 

Amendments 

The paperwork burden estimate for 

Regulation 14A includes the burdens 

imposed by our rules that may be 

incurred by all parties involved in the 

proxy process leading up to and 

associated with the filing of a Schedule 

14A. The current number of estimated 

responses for the collection of 

information for Regulation 14A is 6,369 

annual responses, reflecting 777,590 

internal burden hours and a 

professional cost burden of 

$103,678,712.151 The total burden 

estimate for Regulation 14A reflects, 

among other things, the collection-ofinformation burden associated with 

Rule 14a–8, which includes both the 

time that a shareholder-proponent 

spends to prepare its proposals for 

inclusion in a company’s proxy 

statement, as well as the time that the 

company spends to prepare its proxy 

statement to include and respond to 

such proposals. We recognize that the 

burdens on a particular proponent or 

company would likely vary based on a 

number of factors, including the 

propensity of a particular shareholderproponent to submit proposals, or the 

number of shareholder proposals 

received by a particular company, 

which may be related to its line of 

business or industry or other factors. 

The proposed amendments to Rule 

14a–8 would revise the text of Rule 14a– 

8 to provide clearer standards for 

exclusion, and promote more consistent 

and predictable determinations 

regarding the exclusion of proposals 

under the rule. The proposed 

amendments are not expected to affect 

the number of annual responses under 

the Regulation 14A information 

collection, as the obligation to prepare 

and file proxy statements would remain 

irrespective of the proposed 

amendments. The proposed 

amendments could either increase the 

burden associated with particular filings 

(for example, by leading to the inclusion 

of more shareholder proposals in 

companies’ proxy statements) or reduce 

the burden (for example, by providing a 

clearer basis for exclusion of a 

shareholder proposal). While the effects 

of the proposed amendments on the 

burden hours and professional costs are 

difficult to predict, as they would 

depend on a number of interrelated and 

potentially offsetting factors, we expect 

that the overall burdens associated with 

Regulation 14A would not change 

significantly. Thus we are estimating no 

change in paperwork burden in 

connection with the proposed 

amendments, although we solicit 

comment on this and other aspects of 

our PRA analysis below. 

Request for Comment 

Pursuant to 44 U.S.C. 3506(c)(2)(B), 

we request comment in order to: 

• Evaluate whether the proposed 

collections of information are necessary 

for the proper performance of the 

functions of the Commission, including 

whether the information would have 

practical utility; 

• Evaluate the accuracy and 

assumptions and estimates of the 

burden of the proposed collection of 

information; 

• Determine whether there are ways 

to enhance the quality, utility, and 

clarity of the information to be 

collected; 

• Evaluate whether there are ways to 

minimize the burden of the collection of 

information on those who respond, 

including through the use of automated 

collection techniques or other forms of 

information technology; and 

• Evaluate whether the proposed 

amendments would have any effects on 

any other collection of information not 

previously identified in this section. 

Any member of the public may direct 

to us any comments concerning the 

accuracy of these burden estimates and 

any suggestions for reducing these 

burdens. Persons submitting comments 

on the collection of information 

requirements should direct their 

comments to the Office of Management 

and Budget, Attention: Desk Officer for 

the U.S. Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Washington, DC 

20503, and send a copy to, Vanessa A. 

Countryman, Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090, with 

reference to File No. S7–20–22. 

Requests for materials submitted to 

OMB by the Commission with regard to 

the collection of information should be 

in writing, refer to File No. S7–20–22 

and be submitted to the U.S. Securities 

and Exchange Commission, Office of 

FOIA Services, 100 F Street NE, 

Washington, DC 20549–2736. OMB is 

required to make a decision concerning 

the collection of information between 30 

and 60 days after publication of this 

proposed rule. Consequently, a 

comment to OMB is best assured of 

having its full effect if the OMB receives 

it within 30 days of publication. 

V. Small Business Regulatory 

Enforcement Fairness Act 

For purposes of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (‘‘SBREFA’’),152 the Commission 

must advise OMB as to whether the 

proposed amendments constitute a 

‘‘major’’ rule. Under SBREFA, a rule is 

considered ‘‘major’’ where, if adopted, it 

results or is likely to result in: 

• An annual effect on the U.S. 

economy of $100 million or more (either 

in the form of an increase or a decrease); 

• A major increase in costs or prices 

for consumers or individual industries; 

or 

• Significant adverse effects on 

competition, investment, or innovation. 

We request comment on whether the 

proposed amendments would be a 

‘‘major rule’’ for purposes of SBREFA. 

In particular, we request comment on 

the potential effect of the proposed 

amendments on the U.S. economy on an 

annual basis; any potential increase in 

costs or prices for consumers or 

individual industries; and any potential 

effect on competition, investment, or 

innovation. Commenters are requested 

to provide empirical data and other 

factual support for their views to the 

extent possible. 

VI. Initial Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’) 153 requires an agency, when 

issuing a rulemaking proposal, to 

prepare and make available for public 

comment an Initial Regulatory 

Flexibility Analysis (‘‘IRFA’’) that 

describes the impact of the proposed 

rule on small entities.154 This IRFA has 

been prepared in accordance with the 

RFA and relates to the proposed 

amendments to Rule 14a–8(i)(10), Rule 

14a–8(i)(11), and Rule 14a–8(i)(12) 

under the Exchange Act described in 

Section II above. 

A. Reasons for, and Objectives of, the 

Proposed Action 

Rule 14a–8 provides an important 

mechanism for shareholders to express 

their views, provide feedback to 

companies, and raise important issues 

for the consideration of their fellow 

shareholders by the inclusion of 

shareholder proposals in the company’s 

proxy statement. The proposed 

amendments are intended to facilitate 

shareholder suffrage and 

communication between shareholders 

and the companies in which they invest, 

as well as among a company’s 


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45074 Federal Register / Vol. 87, No. 143 / Wednesday, July 27, 2022 / Proposed Rules 

155 5 U.S.C. 601(6). 

156 17 CFR 240.0–10(a). 

157This estimate is based on staff analysis of 

issuers potentially subject to the final amendments, 

excluding co-registrants, BDCs, and issuers of assetbacked securities, with EDGAR filings on Form 10– 

K, or amendments thereto, or any proxy filing as 

described in note 73, supra, filed during the 

calendar year of Jan. 1, 2021 to Dec. 31, 2021. This 

analysis is based on data from XBRL filings, S&P 

Compustat, Ives Group Audit Analytics, and 

manual review of filings submitted to the 

Commission. 

158 17 CFR 270.0–10. 

159This estimate is derived from an analysis of 

data obtained from Morningstar Direct as well as 

data filed with the Commission (Forms N–Q and N– 

CSR) for or during the last quarter of 2021. 

160For the purposes of our Economic Analysis, 

we have estimated that there were approximately 

176 proponents that submitted a proposal to be 

included in a company’s proxy statement as a lead 

proponent during calendar year 2021. See supra 

Section III.A. Out of these 176 proponents, 66 were 

individuals, and 110 were non-individuals. Thus, 

no more than 110 of these unique proponents 

would be considered small entities. However, this 

data allows for the identification of a sole lead 

proponent of each proposal, but not all of a 

proposal’s proponents, and, as a result, it should be 

interpreted as a lower bound on the total number 

of unique proponents. 

shareholders, through the shareholder 

proposal process. In particular, they are 

intended to enhance the ability of 

shareholders to express diverse 

objectives, consider various ways to 

address issues, and provide greater 

certainty and transparency to 

shareholders and companies as to the 

application of certain of the substantive 

standards for the exclusion of proposals 

under Rule 14a–8. The reasons for, and 

objectives of, the proposed amendments 

are discussed in more detail in Section 

II above. We discuss the economic 

impact and potential alternatives to the 

proposed amendments in Section III, 

and the estimated compliance costs and 

burdens of the amendments under the 

PRA in Section IV above. 

B. Legal Basis 

We are proposing amendments to the 

rules under the authority set forth in 

Sections 3(b), 14, and 23(a) of the 

Exchange Act, as amended, and 

Sections 20(a), 30, and 38 of the 

Investment Company Act, as amended. 

C. Small Entities Subject to the 

Proposed Rules 

The proposed amendments would 

affect some small entities that are either: 

(i) shareholder-proponents that submit 

Rule 14a–8 proposals, or (ii) issuers 

subject to the federal proxy rules that 

receive Rule 14a–8 proposals. The RFA 

defines ‘‘small entity’’ to mean ‘‘small 

business,’’ ‘‘small organization’’ or 

‘‘small governmental jurisdiction.’’ 155

The definition of ‘‘small entity’’ does 

not include individuals. For purposes of 

the RFA, under our rules, an issuer of 

securities or a person, other than an 

investment company, is a ‘‘small 

business’’ or ‘‘small organization’’ if it 

had total assets of $5 million or less on 

the last day of its most recent fiscal 

year.156 We estimate that there are 

approximately 772 issuers that are 

subject to the federal proxy rules, other 

than investment companies, that may be 

considered small entities.157 An 

investment company, including a 

business development company, is 

considered to be a ‘‘small business’’ if 

it, together with other investment 

companies in the same group of related 

investment companies, has net assets of 

$50 million or less as of the end of its 

most recent fiscal year.158 We estimate 

that, as of December 2021, there were 

approximately 80 investment companies 

that are subject to the federal proxy 

rules that may be considered small 

entities.159 We are unable to estimate 

the number of potential shareholderproponents that may be considered 

small entities; 160 therefore, we request 

comment on the number of these small 

entities. 

D. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements 

If adopted, the proposed amendments 

would apply to small entities to the 

same extent as other entities, 

irrespective of size. Therefore, we 

generally expect the nature of any 

benefits and costs associated with the 

proposed amendments to be similar for 

large and small entities. However, as 

noted in Section III.C above, the 

proposed amendments could have a 

greater effect on larger entities because 

larger entities are more likely to receive 

shareholder proposals and submit noaction requests than smaller entities. 

Accordingly, we refer to the discussion 

of the proposed amendments’ economic 

impact, including the estimated costs 

and benefits, on all affected parties, 

including small entities, in Section III.C 

above. Consistent with that discussion, 

we anticipate that the economic benefits 

and costs likely could vary among small 

entities based on a number of factors, 

such as the propensity of a particular 

shareholder-proponent to submit 

proposals, or the number of shareholder 

proposals received by a particular 

issuer, which may be related to its line 

of business or industry or other factors, 

which makes it difficult to project the 

economic impact on small entities with 

precision. While the proposals 

themselves do not impose any new 

reporting, recordkeeping or compliance 

requirements, they could affect the costs 

associated with preparing a proxy 

statement or a shareholder proposal 

depending on the particular facts and 

circumstances. As explained in Section 

III, in many cases we are unable to 

quantify these costs because we lack 

information necessary to make 

reasonable estimates. As a general 

matter, however, we recognize that the 

costs of the proposed amendments 

borne by the affected entities could have 

a proportionally greater effect on small 

entities, as these costs may be a 

relatively greater percentage of the total 

cost of operations for smaller entities 

than larger entities, and thus small 

entities may be less able to bear such 

costs relative to larger entities. The 

proposed amendments could create 

varying competitive effects for 

companies based on company size. As 

noted in Section III.D above, the 

proposed amendments could have a 

greater competitive effect on larger 

public companies relative to smaller 

public companies because larger public 

companies are more likely to receive 

shareholder proposals. However, 

because the proposed amendments 

could result in both greater benefits and 

greater costs to certain companies, we 

cannot reliably predict whether and 

how the competitive position of smaller 

public companies may change as a 

result of the proposed amendments. 

Compliance with the proposed 

amendments may require the use of 

professional skills, including legal 

skills. We request comment on how the 

proposed disclosure amendments would 

affect small entities, including the type 

of professional skills necessary for 

compliance with the proposed 

amendments. 

E. Duplicative, Overlapping, or 

Conflicting Federal Rules 

We believe that the proposed 

amendments would not duplicate, 

overlap, or conflict with other federal 

rules. 

F. Significant Alternatives 

The RFA directs us to consider 

significant alternatives that would 

accomplish our stated objectives, while 

minimizing any significant adverse 

impact on small entities. In connection 

with the proposed amendments, we 

considered the following alternatives: 

• Establishing different compliance or 

reporting requirements that take into 

account the resources available to small 

entities; 

• Clarifying, consolidating, or 

simplifying compliance and reporting 

requirements under the rules for small 

entities; 

• Using performance rather than 

design standards; and 


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• Exempting small entities from all or 

part of the requirements. 

The Rule 14a–8 shareholder proposal 

process is used regularly by issuers and 

shareholder-proponents of all sizes, and 

the rule generally does not impose 

different standards or requirements 

based on the size of the issuer or 

shareholder-proponent. We do not 

believe that establishing different 

compliance or reporting obligations in 

conjunction with the proposed 

amendments or exempting small entities 

from all or part of the requirements is 

necessary. We believe the proposed 

amendments are equally appropriate for 

issuers and shareholder-proponents of 

all sizes seeking to engage with one 

another through the Rule 14a–8 process, 

and we see no reason why a 

shareholder-proponent of a company 

that is a small entity should be required 

to comply with differing standards 

regarding submission of a shareholder 

proposal to the company than a 

shareholder-proponent of a company 

that is a larger entity. In this regard, we 

anticipate that the proposed 

amendments would result in more 

predictable and consistent 

determinations regarding the 

application of Rule 14a–8(i)(10), Rule 

14a–8(i)(11), and Rule 14a–8(i)(12) 

across proposals and over time, which 

would benefit both issuers and 

shareholder-proponents of all sizes. We 

do not believe that imposing different 

standards or requirements based on the 

size of the issuer or shareholderproponent is necessary, and may result 

in additional costs associated with 

ascertaining whether a particular issuer 

or shareholder-proponent may avail 

itself of such different standards. For 

these reasons, we are not proposing 

differing compliance or reporting 

requirements or timetables, or an 

exception, for small entities. However, 

we seek comment on whether and how 

the proposed amendments could be 

modified to provide differing 

compliance or reporting requirements or 

timetables for small entities and 

whether such separate requirements 

would be appropriate. 

The proposed amendments are 

intended to provide a clearer framework 

for the application of certain of the 

rule’s substantive bases for the 

exclusion of proposals that is applicable 

to, and equally appropriate for, issuers 

and shareholder-proponents of all sizes. 

We believe that the proposed 

amendments are clear and that further 

clarification, consolidation, or 

simplification of the compliance 

requirements for small entities is not 

necessary, although we solicit comment 

on how the proposed amendments 

could be revised to reduce the burden 

on small entities. 

Rule 14a–8 historically, and the 

proposed amendments generally, use 

design standards rather than 

performance standards in order to 

promote uniform requirements for all 

issuers and shareholder-proponents in 

connection with the submission of 

shareholder proposals. We solicit 

comment as to whether there are aspects 

of the proposed amendments for which 

performance standards would be 

appropriate. 

G. Request for Comment 

We encourage the submission of 

comments with respect to any aspect of 

this IRFA. In particular, we request 

comments regarding: 

• How the proposed amendments can 

achieve their objective while lowering 

the burden on small entities; 

• The number of small entities, 

including shareholder-proponents, that 

may be affected by the proposed 

amendments; 

• The existence or nature of the 

potential impact of the proposed 

amendments on small entities and 

whether the proposed amendments 

would have any effects that have not 

been discussed in the analysis; 

• How to quantify the impact of the 

proposed amendments; and 

• Whether there are any federal rules 

that duplicate, overlap, or conflict with 

the proposed amendments. 

Commenters are asked to describe the 

nature of any impact and provide 

empirical data supporting the extent of 

the impact. Comments will be 

considered in the preparation of the 

Final Regulatory Flexibility Analysis, if 

the proposed amendments are adopted, 

and will be placed in the same public 

file as comments on the proposed 

amendments themselves. 

Statutory Authority and Text of 

Proposed Rule Amendments 

We are proposing the rule 

amendments contained in this 

document under the authority set forth 

in Sections 3(b), 14, and 23(a) of the 

Exchange Act, as amended, and 

Sections 20(a), 30, and 38 of the 

Investment Company Act, as amended. 

List of Subjects in 17 CFR Part 240 

Reporting and recordkeeping 

requirements; Securities. 

In accordance with the foregoing, we 

are proposing to amend title 17, chapter 

II of the Code of Federal Regulations as 

follows: 

PART 240—GENERAL RULES AND 

REGULATIONS, SECURITIES 

EXCHANGE ACT OF 1934 

■ 1. The general authority citation for 

part 240 continues to read as follows: 

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 

77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, 

77sss, 77ttt, 78c, 78c–3, 78c–5, 78d, 78e, 78f, 

78g, 78i, 78j, 78j–1, 78k, 78k–1, 78l, 78m, 

78n, 78n–1, 78o, 78o–4, 78o–10, 78p, 78q, 

78q–1, 78s, 78u–5, 78w, 78x, 78dd, 78ll, 

78mm, 80a–20, 80a–23, 80a–29, 80a–37, 80b– 

3, 80b–4, 80b–11, and 7201 et seq., and 8302; 

7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 

U.S.C. 1350; Pub. L. 111–203, 939A, 124 Stat. 

1376 (2010); and Pub. L. 112–106, sec. 503 

and 602, 126 Stat. 326 (2012), unless 

otherwise noted. 

* * * * * 

■ 2. Amend § 240.14a–8 by revising the 

text of paragraphs (i)(10) through (12) to 

read as follows: 

§ 240.14a–8 Shareholder proposals. 

* * * * * 

(i) * * * 

(10) Substantially implemented: If the 

company has already implemented the 

essential elements of the proposal; 

* * * * * 

(11) Duplication: If the proposal 

substantially duplicates (i.e., addresses 

the same subject matter and seeks the 

same objective by the same means as) 

another proposal previously submitted 

to the company by another proponent 

that will be included in the company’s 

proxy materials for the same meeting; 

(12) Resubmissions: If the proposal 

substantially duplicates (i.e., addresses 

the same subject matter and seeks the 

same objective by the same means as) a 

proposal, or proposals, previously 

included in the company’s proxy 

materials within the preceding five 

calendar years if the most recent vote 

occurred within the preceding three 

calendar years and the most recent vote 

was: 

(i) Less than 5 percent of the votes 

cast if previously voted on once; 

(ii) Less than 15 percent of the votes 

cast if previously voted on twice; or 

(iii) Less than 25 percent of the votes 

cast if previously voted on three or more 

times. 

* * * * * 

By the Commission. 

Dated: July 13, 2022. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2022–15348 Filed 7–26–22; 8:45 am] 

BILLING CODE 8011–01–P 


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