Rethink Proposals to Revise Shareholder Rights in Proxies, NCPERS Urges Securities and Exchange Commission

Hank H. Kim, Esq., executive director and counsel of the National Conference on Public Employee Retirement Systems (Photo: Business Wire)

WASHINGTON--()--A pair of shareholder rights proposals under consideration by the Securities and Exchange Commission should be reconsidered to avoid harm to pension plans and their beneficiaries, the National Conference on Public Employee Retirement Systems said in public comment letters.

Outlining its concerns in comment letters sent today, NCPERS asked the SEC to revise one proposed rule, “Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8.” And it urged the SEC to scrap the second proposal, “Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice.” Today is the SEC’s deadline for commenting on the proposals.

“Public pension plans owe a duty of care and trust to millions of public sector workers and retirees, and are committed to prudently exercising their rights as shareholders,” said Hank Kim, executive director and chief counsel for NCPERS. “We believe the SEC is tipping the scales much too far in the favor of corporations with this pair of proposals. If implemented, these amendments would have a seriously negative impact on state and local governmental pension plans, and we urge the commission to reconsider.”

NCPERS identified the following as key concerns under the proposed changes to Rule 14a-8, which covers how shareholders that own a certain amount of a company’s securities may submit proposals for inclusion in proxy materials.

  • Eligibility requirements: NCPERS voiced concern about the SEC’s proposal to tighten the current requirement that a shareholder must own $2,000 worth of stock for a single year in order to submit proxy proposals. The SEC’s plan to replace this threshold with a tiered approach “does not strike the right balance between allowing shareholders to engage with a company and burdening the company.”
  • One Proposal Limit: The SEC plan to limit the number of proposals submitted by a shareholder or representative to one per proxy statement for each company could adversely impact shareholders that rely on a representative to assist with management of funds, ensure compliance, and submit proposals on their behalf.
  • Resubmissions: NCPERS said further restrictions on resubmissions are unwarranted. “Current limits already prohibit resubmission of proposals that are not gaining traction with shareholders and fail to increase the level of shareholder support on subsequent submissions,” NCPERS said.

NCPERS said the second proposed rule, on proxy voting advice, should be withdrawn to avoid a detrimental effect on state and local governmental pensions’ access to timely, independent corporate governance research. The proposed rule would add duplicative steps regarding disclosure of conflicts of interest, and would interfere with the independence of proxy voting advice by allowing corporations to review and suggest edits to reports before they are delivered to clients, NCPERS noted.


The National Conference on Public Employee Retirement Systems (NCPERS) is the largest trade association for public sector pension funds, representing more than 500 funds throughout the United States and Canada. It is a unique non-profit network of public trustees, administrators, public officials and investment professionals who collectively manage more than $4 trillion in pension assets. Founded in 1941, NCPERS is the principal trade association working to promote and protect pensions by focusing on advocacy, research and education including e-learning for the benefit of public sector pension stakeholders.


Debra Cope
(202) 468-3814

Release Summary

Public pension group urges Securities and Exchange Commission to rethink two proposed shareholder rights proposals, saying they could harm pensions.


Debra Cope
(202) 468-3814