The issue of shareholder arbitration is in the news again, this time in the renewal of a Johnson & Johnson shareholders’ proposal for arbitration of: “disputes between a stockholder and the Corporation and/or its directors, officers or controlling persons relating to claims under federal securities laws in connection with the purchase or sale of any securities issued by the Corporation to be exclusively and finally settled by arbitration under the Commercial Rules of the American Arbitration Association (AAA), as supplemented by the Securities Arbitration Supplementary Procedures.…”
The proposal by Hal Scott and the Doris Behr 2012 Irrevocable Trust, for consideration at J&J’s April 28 annual meeting appears on page 124 of the Annual Meeting Notice & Proxy Statement. Management recommends against adoption, because: “The Board of Directors does not believe that this proposal is in the best interests of Johnson & Johnson or its shareholders…. Notably, other than the proponent of this shareholder proposal, none of our other shareholders have expressed to us an interest in having us adopt a mandatory arbitration bylaw.” The shareholders also brought suit in the District of New Jersey, seeking a preliminary injunction requiring Johnson & Johnson to inform shareholders that arbitration is permissible under federal law.
(ed: *If this seems familiar, it should. We’ve reported several times on this shareholder’s thus-far unsuccessful efforts to promote shareholder arbitration at J&J, most recently in SAA 2021-26 (Jul. 15). **Our editorial comment in # 2021-26 was prescient: “Maybe it’s our natural skepticism, but we suspect this is not the last we’ve heard of this issue.”)
This news item was first published on the Securities Arbitration Alert Blog, here.
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