Introduction

Public companies may ask the Securities and Exchange Commission (SEC) for permission to omit shareholder proposals from their proxy votes through a no-action letter request under Rule 14a-8.

Executive Summary

In this CompanyIQ^® report, you will find an analysis of SEC staff no-action letters from January 1, 2018 through June 15, 2018 in response to company requests for permission to omit shareholder proposals from their proxies citing the ordinary business operations exception under Rule 14a-8(i)(7). Our analysis shows that:

• 75% of public company no-action requests based solely on the ordinary business operations exception were successful.
• 100% of shareholder proposals regarding employment practices where companies cited 14a-8(i)(7) did not go forward.
• 50% of ESG shareholder proposals on climate change that cited 14a-8(i)(7) did not go forward.
• Cybersecurity is not considered an ordinary business operation by SEC staff.