By Matthew Garza, J.D.
A shareholder proposal, which requests that the management of Caterpillar Inc. review its policies related to human rights to assess areas in which the company may need to adopt and implement additional policies, and report its findings, may not be excluded from the company's proxy materials under Rule 14a-8(i)(10). Division of Corporation Finance staff disagreed that the company had substantially implemented the proposal. Caterpillar also could not exclude the proposal under Rule 14a-8(i)(11) because the staff said the proposal did not substantially duplicate a proposal submitted by Mercy Investment Services, Inc.
The heavy equipment manufacturer received the proxy proposal from the National Center for Public Policy in December of last year. The organization requested that it be included in Caterpillar’s proxy material for the 2015 annual meeting.
Caterpillar argued that it had addressed the proposal’s “essential objectives” because a board committee is expected in the near future to review company policies related to human rights and consider whether amendments are necessary. The staff responded that the company’s policies “do not compare favorably with the guidelines of the proposal” and could not be considered substantially implemented. Caterpillar’s assertion that it intended to include a substantially duplicate proposal from Mercy Investment Services, Inc. and Jewish Voice for Peace was also dismissed by the staff.