The U.S. Securities and Exchange Commission has issued a “no-action” letter to Orlando-based SeaWorld Entertainment, saying its staff thinks the company can ignore a shareholder resolution from People for the Ethical Treatment of Animals.
PETA, which owns SeaWorld shares, had submitted a resolution calling for the retirement of SeaWorld’s orcas to ocean pens. Investors that own enough stock in a public company can place such proposals on proxy statements. Investors then vote on them at the annual shareholder meetings.
Sometimes, as in the case of SeaWorld, companies seek exceptions from the SEC.
“In our view, the proposal seeks to micromanage the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment,” SEC attorney Mitchell Austin said in a letter. “Accordingly, we will not recommend enforcement action to the Commission if SeaWorld omits the proposal from its proxy.”
SeaWorld would not comment on the letter, saying it would do so “when the process is finished.” PETA has asked for reconsideration, saying in a letter to the SEC its proposal has a “focus on a significant social policy issue that transcends the Company’s ordinary business decisions.”
PETA has tried several times to get SeaWorld investors to vote on the issue. The group had to withdraw one resolution after SeaWorld said its shares didn’t meet the minimum value needed. PETA said the value fell beneath the minimum required because of SeaWorld’s stock decline. PETA’s original resolution was blocked in 2014 because federal rules require shareholders to have held stock for at least a year before submitting resolutions. SeaWorld had been a publicly traded company for less than a year, so no stockholder could meet that threshold.
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