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    Home /  Insights /  Memos, Newsletters and Alerts /  Memo
    S&C Memos

    SEC Staff Publishes New Staff Legal Bulletin on Ability to Exclude Shareholder Proposals on the Basis of “Ordinary Business” and “Economic Relevance”

    February 12, 2025 | min read |
    • Related Practices

    Today, the Staff of the SEC Division of Corporation Finance published a new Staff Legal Bulletin No. 14M (“SLB 14M”) regarding the exclusion of Rule 14a-8 shareholder proposals under Rule 14a-8(i)(5) (“economic significance”) and Rule 14a-8(i)(7) (“ordinary business”). SLB 14M broadens the ability to exclude shareholder proposals on these bases by (1) rescinding Staff Legal Bulletin No. 14L (“SLB 14L”), which was issued on November 3, 2021 and narrowed the ability to exclude proposals with “broad societal impact” and (2) reinstating guidance previously rescinded by SLB 14L. SLB 14M should result in greater success for companies seeking exclusions of shareholder proposals, including “ESG” and “anti-ESG” proposals. Companies that have received one or more shareholder proposals for their upcoming shareholder meetings may wish to review their approach in light of the new Staff guidance. Even if a company’s deadline for making a no-action request has passed, the Staff will consider the publication of SLB 14M to be “good cause” for making a late request so long as the legal arguments in the request relate to the new Staff guidance.

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