## Facts

- A shareholder submitted a Rule 14a-8 proposal for inclusion in Marriott International, Inc.’s 2002 proxy materials.
- The proposal asked Marriott’s board to form an independent committee to study and report on the risk to shareholders associated with Marriott’s ownership of two hotels in Burma (Myanmar).
- The proposal cited reported human-rights abuses in Burma, including allegations of forced labor, as part of the risk analysis the committee should consider.
- Marriott’s connection to the two Burma hotels resulted from Marriott’s acquisition of the Renaissance Hotel chain, through which Marriott obtained the relevant properties.
- Marriott wrote to the U.S. Securities and Exchange Commission (SEC), Division of Corporation Finance, requesting no-action relief to omit the shareholder proposal from its proxy materials.
- The SEC staff’s response is reflected in the no-action letter cited at 2002 WL 571758 (2002).

## Issues

1. Whether Marriott could omit from its 2002 proxy materials, under Exchange Act Rule 14a-8, a shareholder proposal requesting an independent committee to study and report on shareholder risk from owning two hotels in Burma.
2. Whether a proposal framed as a board-level study and report about risks tied to alleged human-rights violations is the type of subject matter that is excludable under Rule 14a-8’s substantive bases for omission (such as ordinary business and related exclusions).
3. What the SEC staff’s no-action position was on Marriott’s request to exclude the Burma-related proposal from the company’s proxy statement.

## Decision

- The SEC Division of Corporation Finance staff issued a no-action response to Marriott’s request concerning omission of the Burma hotels risk committee proposal from Marriott’s 2002 proxy materials.
- Publicly available summaries of this no-action letter confirm the request, the subject matter of the proposal, and the context of Marriott’s ownership through the Renaissance acquisition; they do not supply enough detail to state, from those summaries alone, the specific basis the staff relied on or the precise grant/denial language of the staff’s response.

## Legal Principles

- Exchange Act Rule 14a-8 establishes a process for qualifying shareholders to submit proposals for inclusion in an issuer’s proxy materials and provides bases on which an issuer may seek to omit a proposal.
- In the Rule 14a-8 no-action process, the issuer bears the burden of showing that an exclusion applies, and the SEC staff’s no-action response communicates whether the staff would recommend enforcement action if the issuer omits the proposal.
- Shareholder proposals requesting board-level review and reporting are commonly evaluated under Rule 14a-8 standards that distinguish (a) proposals that address company-wide policy or risk oversight and (b) proposals that intrude into day-to-day operational judgments.
- Proposals tied to alleged human-rights conditions in countries where an issuer has operations or assets can present reputational, legal, and business-risk considerations that shareholders may frame as appropriate for board oversight and disclosure.

## Conclusion

Marriott International, Inc., 2002 WL 571758 (2002), concerns Marriott’s Rule 14a-8 no-action request to omit a shareholder proposal seeking an independent committee study and report on shareholder risk associated with owning two hotels in Burma, which Marriott acquired through its acquisition of the Renaissance Hotel chain, against a backdrop of reported human-rights abuses in Burma.
