As reported in our previous client alert, on September 6, 2019, the staff in the Securities and Exchange Commission’s Division of Corporation Finance (the Division) announced important changes to the Division’s process for administering Rule 14a-8 no-action requests regarding shareholder proposals. Specifically, the staff may respond orally rather than in writing to no-action requests. Moreover, the staff may decide not to take a position on the merits of certain requests, thus leaving to the company the decision of whether to include or exclude the shareholder proposal.
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In recent years, publicly traded retailers in have experienced a significant uptick in interest from investors focused on Environmental, Social and Governance issues. On April 23, 2018, the Department of Labor released Field Assistance Bulletin 2018-01, which applies to certain retirement plan fiduciaries who make investment and proxy voting decisions that derive from ESG concerns, and may impact investor behavior at public retailers.
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Recently, the Securities and Exchange Commission allowed Apple Inc. to exclude a shareholder proposal from its proxy statement that requested that Apple “produce a report assessing the climate benefits and feasibility of adopting store-wide requirements for having all retail locations implement a policy on keeping entrance doors closed when climate control (especially air-conditioning during warm months) is in use.”
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In 2015, there was a record number of activist shareholder campaigns in the United States. Although activist hedge funds targeted companies across numerous industries, several retail companies found themselves in activists’ crosshairs. These included companies such as fast-food restaurant chains, convenience store operators, auto parts retailers and department store retailers.
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