Jan. 31, 2020
Comment on File Number File No. S7-23-19 To: Vanessa A. Countryman, Secretary, Securities and Exchange Commission From: John Chevedden Date: January 31, 2020 Re: Comment on File Number File No. S7-23-19 These are the results of the 2019 rule 14a-8 proposals submitted by 4 shareholders in the 2019 proxy season on mostly governance topics: 30 majority votes. 38 votes between 40% and 50% – many of which can be considered a majority votes from the shareholders who had access to independent proxy voting advice. 15 proposals adopted by management without the need for shareholder approval. 10 proposals adopted in a process that included a 2019 shareholder approval vote of a management version of a preceding shareholder proposal. 9 proposal adoptions generally related to the topic of the proposal, like reducing the stock ownership threshold to call a special meeting in response to a written consent proposal. 12 proposals that were adopted during the 2019 proxy season in response to 2018 rule 14a-8 proposals proposals achieving majority vote. One 2018 proposal, with 44% support in 2018, was adopted in 2019. This totals 115 favorable outcomes. Thus rule 14a-8 proposals are working to improve corporate governance under the existing rules. The proposed rule changes will freeze out any Main Street shareholders attempting to file their first rule 14a-8 proposal. In this respect it is similar to the proposed proxy advisor rule changes which will freeze out any new entrants to this field. It is ironic that quite a number of companies will object to a new governance proposal because they can produce a list of good governance measures which they adopted earlier that were spearheaded by rule 14a-8 proposals.