Nareit and other members of the Corporate Governance Coalition for Investor Value (CGCIV) have voiced their support for H.R. 5756, legislation introduced by Rep. Sean Duffy (R-WI) that would raise the “resubmission thresholds,” which determine when a shareholder proponent is allowed to resubmit a proposal at a public company in a subsequent year. The bill was approved by the House Financial Services Committee on June 7, by a vote of 34-22, largely along party lines.
In its letter of support to the House Committee on Financial Services, the CGCIV noted that the current resubmission thresholds allow activists to continuously resubmit unpopular proposals that have in some instances already been rejected by over 90 percent of shareholders.
H.R. 5756 would raise the level of support that a failed proposal must receive in order to be resubmitted from 3 percent to 6 percent for first-year submissions, 6 percent to 15 percent for second-year submissions, and 10 percent to 30 percent for third-year submissions.
“Ultimately, H.R. 5756 protects against abuse of the system by not forcing shareholders to have to register their opposition to unpopular proposals year after year,” the letter said.
(Contact: Victoria Rostow at vrostow@nareit.com)