BOSTON, March 11 Shareholder activist John
Chevedden has won favorable rulings in separate federal suits
brought by Omnicom Group Inc and EMC Corp,
breaking a pattern of legal setbacks for the private investor.
Chevedden, who lives near Los Angeles, is well-known in
corporate governance circles for the proposals he files at
scores of companies each year calling for changes such as having
an independent board chairman. Some companies have successfully
sued to block his measures.
In January, advertising company Omnicom sued Chevedden in
U.S. District Court in New York, seeking a declaration it could
leave off its annual proxy statement to shareholders one of his
proposals calling for shareholder voting tallies to be kept
confidential. Omnicom argued such a change could break New York
But in an order on Tuesday Judge Louis Stanton granted a
motion by Chevedden to dismiss the suit. Stanton noted Chevedden
promised not to sue if Omnicom excludes his proposal and added
that "the possibility of SEC (Securities Exchange Commission)
investigation or action is remote."
In a similar case in January, data-storage company EMC sued
Chevedden and ally James McRitchie in U.S. District Court in
Boston. EMC sought a declaration it could exclude from its proxy
statement their proposal that the company's board chairman
should be independent.
But in a March 7 hearing, Judge Mark Wolf dismissed the
case, according to a transcript issued Tuesday. Like Judge
Stanton, Wolf said there is little risk of an SEC enforcement
action if EMC excluded the proposal.
A spokesman for Omnicom did not immediately return messages
EMC spokesman Dave Farmer via email said Wolf's order "did
not reach the issue of whether the proposal satisfies SEC
rules. EMC is exploring all its options."
In an interview, Chevedden called the rulings
"overwhelmingly positive." With the suits, Chevedden said,
companies are dodging precedents giving shareholders their say.
The New York suit is Omnicom Group vs. Chevedden, U.S.
District Court, Southern District of New York, No. 14-00386.
The Massachusetts suit is EMC Corp vs. Chevedden et al, U.S.
District Court, District of Massachusetts, case No. 14-10233.