On July 17, NAREIT and its partners in the Corporate Governance Coalition for Investor Value submitted a letter to the Securities and Exchange Commission (SEC) in support of a petition calling on the SEC to increase the percentage of favorable votes required for a shareholder proposal to be resubmitted.

The proposed rule is aimed at eliminating recurrent “nuisance” proposals from certain investors who use the proxy process to submit shareholder proposals repeatedly that have low or declining support among shareholders. Nuisance proposals can create considerable costs for companies and investors.

In the letter, the coalition said the resubmission thresholds under Exchange Act Rule 14a-8(i)(12) for proposals that receive low levels of shareholder support should be raised.  The current resubmission rule allows a company to exclude a proposal from its proxy statement only if it fails to receive exceedingly modest support. That means proposals can be repeatedly resubmitted even if, in some instances, more than 90 percent of shareholders have voted against them.

NAREIT and other industry groups formed the coalition to provide a forum for discussion among its members. The coalition also advocates for strong corporate governance policies and federal securities laws that promote long-term value creation for investors.

(Contact: Victoria Rostow at vrostow@nareit.com)

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