The Securities and Exchange Commission agreed yesterday to open debate on a range of possible new rules for annual meetings that could quiet the buzz of corporate gadflies.
The suggested rule changes would affect shareholders' ability to offer policy proposals for consideration at annual meetings. Some of the rules would limit shareholder influence in shaping corporate proxy statements.
The SEC will also consider other rules that would have an opposite effect, giving shareholders more access to company boards and freer participation in annual meetings.
The SEC will take public comments on the proposals for four months, ending Feb. 24, 1983.
"We're going all the way back on this. We're asking whether there should be a federal rule" governing shareholder proposals, said William E. Morley, deputy of the SEC's division of corporate finance. The SEC was given the authority to regulate those matters under the Securities Exchange Act of 1934. But Morley said many questions have been raised about whether or not the SEC's role is redundant, inasmuch as state's also have the right to establish rules for the conduct of shareholders' meetings.
Morley said the agency probably will retain the the right to regulate "what goes into management proxy statements," in which case, he said, the SEC needs to streamline its exercise of that right. To achieve that end, and to correct some perceived problems in shareholder participation, the commission is proposing three basic changes in the ways measures are drafted for vote at annual meetings.
The suggested changes include:
* Toughening the eligibility requirements for shareholders who want to offer amendments to proxy statements. At the moment, a person holding one share of a company's stock may offer proposals for voting. The SEC is suggesting that only shareholders with at least 1 percent, or $1,000 worth of a company's stock, be allowed to make voting proposals.
* Giving corporate officials -- and shareholders -- more leeway to set rules for shareholders' participation in annual meetings, within the bounds of federal and state law. Plans must be approved by at least 50 percent of the shareholders every five years to stay in effect.
* Limiting the circumstances under which shareholder proposals can be excluded. Now, companies can raise a host of objections to block consideration of shareholder proxy proposals and the SEC is often obliged to act as referee, a job it would like to avoid in all but the most important cases.