Jan. 31, 2020
Please consider this my comment on the “Proposed Rule on Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8,” File Number S7-23-19. As an informed shareholder, I believe the shareholder proposal process plays a vital role in ensuring that our capital markets remain dynamic and efficient. Shareholder resolutions are the most direct and transparent communication mechanism between company management and shareholders. The proposed rule change will limit the volume and increase the complexity of those communications. The end result is that it will be more difficult for investors to get critical issues on the meeting agenda of public companies. It raises the minimum ownership threshold to file shareholder resolutions by 1,200%, eliminates Main Street Investors’ ability to aggregate shares to meet that new threshold, and removes issues from the ballot more quickly thanks to the momentum rule. It is inarguable that this rule change will limit the ability of Main Street Investors to participate in the shareholder proposal process. This is firmly inconsistent with the SEC’s stated goal of protecting the Main Street Investor and with a long history of shareholders (including many Main Street Investors who would now be prohibited from filing resolutions) raising critical, material issues like board diversity, greenhouse gas emissions, and nondiscrimination policies. The Business Roundtable, an ardent supporter of this rule change, recently made headlines by releasing its Statement on the Purpose of a Corporation. That statement concluded by saying, “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” According to SEC Commissioner Robert Jackson, a small sampling of the immediate effects of this rule change would include: 1. More than 50% of current proposals restricting executive stock sales would be excluded from the ballots for three years 2. 65% of proposals for better reporting on climate change would be excluded 3. 50% of board diversity proposals would be excluded 4. 40% of political spending disclosure reporting proposals would be excluded At a time when market participants are affirming the inextricable link between a broad array of stakeholder interests and the financial health of their businesses, this rule serves to choke off one of the most important avenues of that dialogue and dampen investors ability to hold corporate management accountable. Thank you for your consideration of these comments. Sincerely, Tara Bloyd Santa Fe, New Mexico