The SEC finalized rules this week which adjusted eligibility requirements for shareholders to submit proposals at annual meetings or re-submit a previously voted on proposal. The finalized shareholder proposal rules are effectively the same as the proposed rule published on Nov. 5, 2019. The new thresholds become effective 60 days after publication in the Federal Register and will apply to any proposal submitted for an annual or special meeting to be held on or after January 1, 2022.
- Shares held for one year - $25,000 threshold required
- Shares held for two years - $15,000 threshold required
- Shares held for three or more years - $2,000 threshold required
Required support levels to re-submit a proposal were also increased. Previously, a shareholder could resubmit a proposal if it received at least 3% support at the meeting while proposals submitted a second or third time in the five years preceding the initial submission required 6% and 10% support. Under the new rule, shareholder proposals will need 5% shareholder support the first year they are submitted to be eligible for resubmission while proposals submitted two and three times in the five years after the first submission would need to achieve 15% and 25% support respectively.
