For months now, the SEC has been considering a rule proposal under which shareholders would be allowed to place director nominees on the corporation's proxy statement at company expense. The proposal's in deep political doo-doo and seems unlikely to pass, at least in current form. So some big union pension funds decided to try an end-run on the political process by putting forward a Rule 14a-8 shareholder proposal at Disney that would allow such nominations. Worse yet, the SEC staff decided to do an end-run around the Commission by requiring Disney to put the shareholder proposal on the ballot for the next shareholders' meeting.
Fortunately, somebody at the Commission apparently gave the staff a good talking to about how the regulatory process is supposed to work. Today, the staff announced that it would not require Disney to put the proposal up for a vote.
Good. The proposed rule is a piece of crap - it's lousy public policy (see my TCS columns The SEC: From Bad to Worse?, Pension Funds Play Politics, and Does the SEC Know When Enough Is Enough?). But it's a lot worse when the unelected and unappointed staff tries to do an end-run around both the appointed Commission and the administrative process. Somebody needed to rein in the staff and it looks like somebody did.
