Microsoft to keep shareholder proposal rights through 2027, even as SEC reduces oversight

Shareholder resolutions on topics like climate change, workforce diversity and executive pay have become the focus of many shareholder meetings in recent years, although many have received diminishing support from major fund firms. Microsoft's meeting is set for December 8 and traditionally has been held early in the proxy cycle that runs through June 30 of each year, bringing attention to the company's governance procedures. Last week SEC Chair Paul Atkins, an appointee of US President Donald Trump, proposed to end the agency's oversight of the resolutions process and move the function to state officials, which activists saw as a shift that would diminish their influence. The move is part of a broader shift of power away from investors toward managers by the Republican-dominated commission. The agreement between Chesser and Microsoft, seen by Reuters, says Microsoft will continue to apply previous eligibility requirements for investors to submit resolutions for a vote. Chesser's group has similar resolutions pending with Procter & Gamble PG.O and Oracle ORCL.N and may submit more. P&G's annual meeting is set for October 13. In its proxy statement dated August 28, the company recommended votes against the proposal, among other things calling it premature since the SEC hadn't yet proposed its rulemaking. A P&G representative declined to comment. Oracle's AGM has not yet been set. A representative did not immediately respond to questions. Microsoft will consider shareholder proposals at its annual meetings through next year, at the request of an activist looking to preserve investor rights as they come under pressure from a contentious U.S. Securities and Exchange Commission rule change proposed last week. Under an agreement with conservative activist Paul Chesser, seen by Reuters, Microsoft will continue to apply existing thresholds for investors to submit resolutions for a vote, even as the SEC considers changes that critics say would sideline individual investors, religious groups, unions and others who have had a say through the shareholder proposal process for decades. The agreement only lasts a year, but could effectively offset efforts by the regulatory agency to shift power away from investors to corporate executives. Chesser said he hopes Microsoft's approach will become a corporate-governance model to assure mom-and-pop investors a voice that can be followed by other companies. "Microsoft put in writing that the smallest long-term owners of the company will still have a way to be heard next year, no matter what the SEC does," said Chesser, director at the National Legal and Policy Center. "Every other company that claims to value its shareholders should be asked why it won't do the same," he said. In an e-mailed statement, a Microsoft spokesperson said: "With the Securities and Exchange Commission announcing that its shareholder proposal regulatory framework is under review, we agreed to maintain the current eligibility thresholds for one year, providing Microsoft and its shareholders a clear and predictable process for the next proxy cycle."

Microsoft to keep shareholder proposal rights through 2027, even as SEC reduces oversight

SEC proposal and shareholder resolution backdrop

Similar proposals at Procter & Gamble and Oracle

Microsoft agrees to keep current proposal thresholds for one year

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