This is the first half of the sixth and final post in my series on the Securities and Exchange Commission proposal to rescind Securities Exchange Act Rule 14a-8 (the so-called shareholder proposal rule). In it, I assume familiarity with the prior posts.
Prior Posts
The Question Posed
In the proposing release, the SEC asks:
To what extent have recent developments, including the potentially lower burdens of independent solicitation campaigns and the emergence of alternative shareholder engagement channels, weakened the original justifications for a Federal shareholder proposal rule? To what extent have costs to proponents associated with conducting an independent solicitation changed since the adoption of Rule 14a-8?
In my view, post-1942 developments have not merely undercut Rule 14a-8’s original justifications, those developments have actually flipped the cost calculus on which the rule rested.