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April 12, 2021

SEC Staff Updates Guidance for Shareholder Proposals in Light of COVID-19 Concerns


Last year, the Staff of the SEC's Division of Corporation Finance and the Division of Investment Management issued guidance for conducting shareholder meetings in light of COVID-19 concerns. The guidance addressed procedures for changing the date, time or location of a shareholder meeting, conducting "virtual" shareholder meetings, delays in printing and mailing proxy materials, and the presentation of shareholder proposals. On April 9, 2021, the guidance was updated to extend shareholder proposal presentation procedures through the 2021 proxy season as follows:

Exchange Act Rule 14a-8(h) requires a shareholder who has caused the inclusion of a proposal in the issuer's proxy statement, or a representative, to appear and present the proposal at the annual meeting. Failure to appear and present the proposal at the meeting permits the issuer to exclude all proposals submitted by that shareholder from the issuer's proxy statements for any meetings held in the following two calendar years, unless the failure was attributable to good cause. Issuers are encouraged, to the extent feasible under state law, to allow shareholder proponents or their representatives to present their proposals through alternative means, such as by phone, during the 2020 and 2021 proxy season. However, if a shareholder proponent or representative is unable to attend and present the proposal at the annual meeting due to the inability to travel or other hardships related to COVID-19, the Staff will consider this to be "good cause" under Rule 14a-8(h).

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.