On April 10, 2014, nine business groups submitted a rulemaking petition requesting that the SEC amend Rule 14a-8(i)(12) under the Exchange Act, sometimes referred to as the "resubmission rule." The petition asks the SEC to raise the thresholds included in Rule 14a-8(i)(12), which allows a reporting company to exclude a shareholder proposal from company proxy materials if the proposal concerns substantially the same subject matter as a proposal previously included in company proxy materials that received low shareholder support.

Rule 14a-8 requires a reporting company to include a shareholder proposal in company proxy materials under certain circumstances. A company may exclude a shareholder proposal that concerns substantially the same subject matter as a proposal which, within the last five years, appeared in the company proxy materials and received the support of:

The rulemaking petition argues that these levels are too low, resulting in wasted shareholder resources and distraction of both shareholders and management. The petition requests the support thresholds be raised significantly without suggesting specific new thresholds. However, the petition references a 1997 unadopted SEC proposal to raise the thresholds to 6%, 15% and 30%, respectively.

The petition cites the fact that, recently under the current rule, companies have repeatedly been required to include shareholder proposals dealing with social policy issues, such as environmental and labor policy matters, in their proxy materials notwithstanding a history of relatively low shareholder support for these proposals.

To learn more about Rule 14a-8 shareholder proposals, see: