USPX members’ efforts to advance proxy access got a boost today from SEC staff. Two companies, Forest Labs ($FRX) and Medtronic ($MDT), had sought no-action letters from Commission staff to allow them to exclude from their proxy materials the USPX model proxy access proposal. Both requests have been denied.
These decisions come on the heals of much criticized no-action decisions by SEC staff that allowed six companies to exclude an earlier version of the USPX model proposal (see Pushback From SEC Staff, March 9, 2012). In response to those decisions, USPX members immediately redrafted the USPX model proposal and resubmitted it to Forest Labs, Medtronic and H&R Block ($HRB). Commission staff have not yet made a decision on an H&R Block no-action request.
All three of the most recent proposal submissions were made by shareowner Kenneth Steiner with help from John Chevedden. Various members of the USPX have also pitched in. In particular, Glyn Holton, Jim McRitchie and Dan Rudewicz helped organize responses to the three most recent no-action requests.
We now have a version of the USPX model proxy access proposal that we know can pass muster with the SEC. But we still have plenty of work ahead of us. Proxy access doesn’t become real until shareowners approve it at a company’s annual meeting, and even then, the board has discretion over whether or not to actually implement it (because the USPX model proposal is precatory). Our immediate next steps are to reach out to proxy advisory services and encourage them to support the USPX model proposal in their voting recommendations.