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General Motors Company; Rule 14-8 No-Action Letter

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General Motors Company; Rule 14-8 No-Action Letter March 7, 2017 Marc S. Gerber Skadden, Arps, Slate, Meagher & Flom LLP [email protected] Re: General Motors Company Incoming letter dated February 28, 2017 Dear Mr. Gerber: This is in response to your letter dated February 28, 2017 concerning the shareholder proposal submitted to GM by John Chevedden. We also have received letters from the proponent dated March 3, 2017, March 5, 2017 and March 7, 2017. Copies of all of the correspondence on which this response is based will be made available on our website at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8.shtml. For your reference, a brief discussion of the Division’s informal procedures regarding shareholder proposals is also available at the same website address. Sincerely, Matt S. McNair Senior Special Counsel Enclosure cc: John Chevedden ***FISMA & OMB Memorandum M-07-16*** March 7, 2017 Response of the Office of Chief Counsel Division of Corporation Finance Re: General Motors Company Incoming letter dated February 28, 2017 The proposal requests that the board take the steps necessary to enable at least 50 shareholders to aggregate their shares for purposes of proxy access. There appears to be some basis for your view that GM may exclude the proposal under rule 14a-8(i)(10). Based on the information you have presented, it appears that GM’s policies, practices and procedures compare favorably with the guidelines of the proposal and that GM has, therefore, substantially implemented the proposal. Accordingly, we will not recommend enforcement action to the Commission if GM omits the proposal from its proxy materials in reliance on rule 14a-8(i)(10). We note that GM did not file its statement of objections to including the proposal in its proxy materials at least 80 calendar days before the date on which it will file definitive proxy materials as required by rule 14a-8(j)(1). Noting the circumstances of the delay, we do not waive the 80-day requirement. Sincerely, Evan S. Jacobson Special Counsel DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS The Division of Corporation Finance believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division’s staff considers the information furnished to it by the company in support of its intention to exclude the proposal from the company’s proxy materials, as well as any information furnished by the proponent or the proponent’s representative. Although Rule 14a-8(k) does not require any communications from shareholders to the Commission’s staff, the staff will always consider information concerning alleged violations of the statutes and rules administered by the Commission, including arguments as to whether or not activities proposed to be taken would violate the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff’s informal procedures and proxy review into a formal or adversarial procedure. It is important to note that the staff’s no-action responses to Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these no-action letters do not and cannot adjudicate the merits of a company’s position with respect to the proposal. Only a court such as a U.S. District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials. Accordingly, a discretionary determination not to recommend or take Commission enforcement action does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in court, should the company’s management omit the proposal from the company’s proxy materials. JOHN CHEVEDDEN ***FISMA & OMB Memorandum M-07-16*** March 7, 2017 Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 # 5 Rule 14a-8 Proposal General Motors Company (GM) Year Old Proxy Access Recycled John Chevedden Ladies and Gentlemen: This responds to the February 28, 2017 no-action request. From the attached article it seems that stock ownership record keeping is so problematic that a prudent proxy access aggregator would need to plan for obtaining comfortably more than what he or she calculates to be 3%. I do not believe that any company will come forward to say that if there is a dispute on what constitutes 3% -the shareholders win. This is to request that the Securities and Exchange Commission allow this resolution to stand and be voted upon in the 201 7 proxy. Sincerely, ~en cc: Rick E. Hansen <[email protected]> The Street Laster: Remove the Cobwebs From Stock Record-Keeping 111111 Delaware judge takes up antiquated stock record-keeping and voting system in Dole case David Marcus Mar 3, 2017 6:00 AM EST Travis Laster has become a forceful advocate for reform of the system for voting corporate stock and tracking share ownership, and in a Feb. 15 decision he confronted yet another drawback of that system. The Delaware vice chancellor presided over a case in which Dole Food Co. agreed to pay stockholders an additional $2. 7 4 a share plus interest to settle claims that the controlling stockholder David Murdock violated his fiduciary duties to minority stockholders in buying Dole for $1.2 billion, or $13.50 a share, in 2013. There were 36.8 million shares eligible for the settlement, but claimants submitted "facially valid claims" for 49.2 million shares, a discrepancy that the settlement administrator and class counsel could not resolve because the Depository Trust Co. and Cede Co., which keep the stockholder ledger for public companies, did not receive information about trades made in the three trading days before the deal closed on Nov. 1, 2013, a period in which 32 million Dole shares changed hands. Nor could the OTC/Cede system track short sales made in those three days. There is no cost-effective way to determine who did own the shares at closing, Laster wrote. Instead, he held that the counsel for stockholders, who were led by Stuart Grant of Grant & Eisenhofer PA in Wilmington and Randall Baron of Robbins Geller Rudman & Dowd LLP should distribute the settlement consideration to Cede and thereby to the custodial banks and brokers whose clients are the economic owners of the shares and let those institutions sort the problem out. Laster wrote at the end of the opinion that the Dole case raises broader issues: "The problems raised by short sales and trades during the three days before closing appear endemic to the depository system and hence likely infect every claims process. Nothing about either factor was unique to Dole. The only difference was the magnitude of the discrepancy, which made the issues visible." The markets may be unpredictable, but Jim Cramer can show you how to navigate it like a pro. Follow his blue-chip portfolio of stocks at Action Alerts PLUS. Join todaY- and trY- it for 14 daY-S- FREE! The judge grappled with another drawback of the current depository system last year when he found that mutual funds sponsored by T. Rowe Price & Associates Inc. could not seek appraisal on the 27 million Dell Inc. shares they owned because the funds had inadvertently voted for the deal, thanks to a clerical error that ended up costing the mutual fund company's investors over $100 million. The error stemmed from the byzantine way in which stock is owned and voted-a "daisy chain, 11 as Laster called it. He offered a way to untangle the daisy chain in 11 The Block Chain Plunger: Using Technology to Clean Up Proxy Plumbing and Take Back the Vote, 11 a paper he delivered last fall to the Council of Institutional Investors. Like almost all shareholders, the T. Rowe funds did not own their Dell stock directly. Instead, they were beneficial owners, holding their shares through a custodial bank, State Street Bank & Trust Co., which in turn is a member of the Depository Trust Co., whose nominee Cede was the stockholder of record, as it is for most public companies. State Street in turn used Broadridge Financial Solutions Inc. to collect and implement voting instructions from account holders. Laster noted in his speech that Broadridge "controls over 98% of the U.S. market for proxy vote processing services." T. Rowe added yet another intermediary, since it uses Institutional Shareholder Services Inc. to notify its funds about upcoming votes, provide voting recommendations, collect voting instructions and deliver them to Broadridge. Laster argued in his speech that the contorted way in which shares are held and voted makes precise vote counting impossible. He noted that one prominent Wilmington lawyer estimated that in a corporate election closer than 55% to 45%, "There is no verifiable answer to the question, 'Who won?"' Many lawyers have also warned that the number of shares on which appraisal could be sought is theoretically infinite because of the oddities of the OTC/Cede system, but those fears had never been borne out until the Dole case, which gives Laster one more powerful example to argue for a much-needed reform of the system. JOHN CHEVEDDEN ***FISMA & OMB Memorandum M-07-16*** March 6, 2017 Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 # 4 Rule 14a-8 Proposal General Motors Company (GM) Year Old Proxy Access Recycled John Chevedden Ladies and Gentlemen: This responds to the February 28, 2017 no-action request.
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