Rulemaking Petition-Factsheet
Formal Petition Regarding Amendments to Rule 14a-8
Under the Securities Exchange Act of 1934, Filed with the U.S. Securities and Exchange Commission, July 23, 2026
WHAT THE PETITION REQUESTS
The petition is filed under an SEC rule that invites shareholders to recommend changes to an SEC rule. The Petition asks that, if the SEC conducts a rulemaking on Rule 14a-8, it recalibrate rather than dismantle the rule. If the Commission proceeds with rulemaking, the petition reminds the SEC of its obligation under the Administrative Procedure Act to rigorously evaluate less harmful alternatives before any wholesale change.
NO ACTION PROCESS RECOMMENDATIONS
The no-action process be retained with reforms to sharpen the review process machinery—clarifying timelines, promoting direct engagement between issuers and proponents, and thereby reducing unnecessary demands on Commission staff:
establish a two-week engagement period after an issuer submits a notice of intent to exclude a shareholder proposal, during which the issuer and proponent may seek an agreement that potentially eliminates the need for a staff advisory opinion
provide specific timeframes for proponents to respond to exclusion notices, and confirm that the staff will consider any timely proponent response when issuing an advisory opinion;
extend the deadline for filing exclusion notices from 80 to 90 days, and clarify that the deadline runs from the earlier of the issuer’s proxy print deadline or its EDGAR filing deadline for the definitive Form DEF 14A; and
Set clear timeframes for a proponent to respond if a company requests a staff advisory opinion.
Allow 14 business days for responses to procedural objections such as proof of ownership, and 30 calendar days for responses to substantive exclusions
Eliminate outdated paper copy submission requirements.
Excise obsolete language in the existing Rule requiring the submission of six paper copies, reflecting the modern reality that all submissions are processed electronically.
RECOMMENDATIONS ON EVALUATING LESS HARMFUL ALTERNATIVES
In the event that the SEC proposes reforms to the shareholder proposal rule beyond the no action process, the petition reminds the SEC of its obligation to consider less harmful alternatives that would do less to disrupt the expectations and systems that the market has come to rely upon. Such less harmful alternatives could include retaining the federal framework while leaving dispute resolution to the courts and evaluating the related cost of litigation that this approach would impose. Such evaluation would also consider approaches for reducing the subjectivity of the rules to reduce disputes between proponents and issuers.
Signatories of the petition
The signatories include New York State Comptroller Thomas P. DiNapoli and organizations: Ceres, For the Long-Term, the Interfaith Center on Corporate Responsibility, Shareholder Rights Group, and US SIF
Rulemaking Petition regarding Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934
July 23, 2026
Vanessa A. Countryman, Secretary
U.S. Securities and Exchange Commission
100 F Street, NE, Washington, DC 20549-1090
I. Introduction
The undersigned submit the following pursuant to 17 CFR § 201.192(a) (Rule 192(a) of the Commission’s Rules of Practice) and Section 553 of the Administrative Procedure Act.
Petitioners request that the Commission, in any rulemaking to amend Rule 14a-8 under the Securities Exchange Act of 1934 (“the Rule”), largely retain the Rule, which has, over the course of many decades established and refined a balance among issuers, proponents, and the voting shareholders whose capital is at stake.
The petition addresses both the no-action process as well as the underlying exclusion and procedural rules. We urge that both be retained and staff review be restored effective immediately.
In particular, in any rulemaking we urge that the no-action process be retained with consideration of reforms to sharpen the review process machinery—clarifying timelines, promoting direct engagement between issuers and proponents, and thereby reducing unnecessary demands on Commission staff. The amendments would:
establish a two-week engagement period after an issuer submits a notice of intent to exclude a shareholder proposal, during which the issuer and proponent may seek an agreement that may obviate the need for staff review of the notice;
provide specific timeframes for proponents to respond to exclusion notices, and confirm that the staff will consider any timely proponent response when issuing an advisory opinion;
extend the deadline for filing exclusion notices from 80 to 90 days, and clarify that the deadline runs from the earlier of the issuer’s proxy print deadline or its EDGAR filing deadline for the definitive Form DEF 14A; and
update the Rule to eliminate the archaic requirement that submissions be filed in paper copies.
Petitioners also recognize that Chairman Paul Atkins has signaled his intent for the Commission to abandon its role as an informal “referee” of the excludability of individual shareholder proposals and that the Division of Corporation Finance has paused review of most no-action requests. Therefore, while the petitioners believe that the no-action process should be retained and fully reinstated, the petition urges that any rulemaking not seek to limit the Commission’s role via a heavy handed wholesale rescission or other aggressive modification to the Rule without first rigorously evaluating less harmful alternatives including (a) limiting no-action letters to contested exclusion notices or significant policy matters or using other mechanisms, including those recommended in the petition to reduce the role of the staff or (b) retaining or refining the federal procedural and exclusion rules but leaving consideration of the validity of exclusion decisions to the courts. In the event it proposes substantial modifications or rescission of the no-action process or other elements of the Rule, the Commission should evaluate the impacts and costs associated with increased litigation already evidenced during the 2026 proxy season suspension, and how the existing substantive exclusions and procedures would function in the absence of Commission staff engagement on a proposal-by-proposal basis.
II. Statutory Authority
The Commission’s authority to adopt the requested amendments derives principally from Section 14(a) of the Securities Exchange Act of 1934 and the Commission’s broad authority to regulate corporate proxy statements in the public interest and for the protection of investors. The Commission has repeatedly affirmed its authority to establish and refine Rule 14a-8 in its various rule-making releases including Proposed Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 34-12598 (July 7, 1976), 41 Fed. Reg. 29,982 (proposed July 20, 1976) (to be codified at 17 C.F.R. pt. 240); Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 34-20091 (Aug. 16, 1983), 48 Fed. Reg. 38,218 (Aug. 23, 1983) (codified at 17 C.F.R. pt. 240); Shareholder Proposals Relating to the Election of Directors, Exchange Act Release No. 34-56161 (July 27, 2007), 72 Fed. Reg. 43,488 (proposed Aug. 3, 2007) (to be codified at 17 C.F.R. pt. 240); Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8, Exchange Act Release No. 34-95267 (July 13, 2022), 87 Fed. Reg. 45,052 (proposed July 27, 2022) (to be codified at 17 C.F.R. pt. 240).
III. Interest of Petitioners
Petitioners include pension trustees and asset owners and organizations whose members or funds include individual investors and institutional fiduciaries—with long investment horizons and legal obligations to beneficiaries that make active stewardship not merely a choice but a duty. Many have filed shareholder proposals, and not all take the same perspective. All have relied on the proposal process as a practical tool for engaging companies on material risks, including through voting on shareholder proposals.
IV. Shareholder Proposals and the Rule 14a-8 Framework
Shareholders of public companies can submit proposals for consideration at annual meetings, providing a formal mechanism to influence corporate governance, strategy, and risk oversight. This process, which provides investors with important information about issues being raised by fellow shareholders, is made effective through the SEC’s proxy rules, particularly Rule 14a-8 (“the Rule”), which requires disclosure of eligible proposals in a company’s proxy statement so that shareholders are apprised of matters under consideration during the upcoming meeting and have an opportunity to vote on them through the proxy process.
To qualify a proposal under the Rule, shareholders must meet specified ownership thresholds, hold shares for a defined period, and comply with procedural requirements such as submission deadlines and proof of ownership. Rule 14a-8 also establishes thirteen enumerated grounds on which companies may exclude proposals, designed to screen out proposals that would not be likely to be significant to investors. The exclusions include, among other things, proposals that fall outside proper shareholder authority under state law, relate to ordinary business operations, contain misleading information, duplicate or conflict with other proposals, lack relevance, have already been substantially implemented, or fail to meet resubmission thresholds. The burden of justifying exclusion of a proposal falls on the issuer receiving the proposal, which must submit to the Commission an explanation of its reasons. Rule 14a-8(g), Rule 14a-8 (j)(2)(ii).
V. Removing a “Cornerstone” would Destabilize Corporate Governance in the US
The Commission’s Spring 2026 Unified Regulatory Flexibility Agenda includes a rulemaking to modify Rule 14a-8.[1] The petitioners are aware that Chair Paul Atkins and Commission members have articulated that the rulemaking may severely circumscribe or even rescind Rule 14a-8. Such changes may include allowing state law or corporate bylaws to delineate whether and when a shareholder proposal would be included on the corporate proxy statement or even eliminating entirely the ability of shareholders to submit proposals for the corporate proxy statement. Moreover, Executive Order 14366 (issued December 11, 2025),[2] while focusing on the role of proxy advisors, also asked the SEC to evaluate curtailing environmental, social and governance shareholder proposals through an SEC rulemaking.
Rule 14a-8 creates value and manages risk for shareholders and their companies, and provides structural integrity for investor-company relationships.
The Commission has previously recognized in its July 2022 Proposing Release that:
The shareholder proposal process has become a cornerstone of engagement between shareholders and company management. Shareholder proposals provide an important mechanism for investors to express their views, provide feedback to companies, exercise oversight of management, and raise important issues for the consideration of their fellow shareholders in the company’s proxy statement. Moreover, investor support for shareholder proposal campaigns over the years has helped to shape many current corporate practices and policies, such as annual director elections, majority vote standards for director elections, and proxy access rights for shareholders.[3]
The petitioners believe that eliminating that cornerstone would destabilize corporate governance in America, removing a critical tool for board and management accountability to shareholders that investors rely upon in their investment and stewardship strategies.
The result would be the silencing of many shareholder proposals—and with them, lost value and risk management benefits—followed by an era of uncertainty and chaos in corporate governance, with more litigation, more opposition to director elections and pay packages, and a more adversarial relationship between investors and their companies.
The Commission has honed the Rule over the course of decades to balance the interests of issuers, proponents, and shareholders who vote on the proposals. The Commission should respect that balance, instead of upsetting market norms and expectations. This petition proposes modest adjustments to the shareholder proposal exclusion process to increase predictability and efficiency and limit demands on SEC staff resources. It also proposes that, if the SEC considers radical changes to the Rule, it first consider less harmful alternatives.
VI. The No-Action Process and Its 2026 Suspension
Since 1947, disputes over whether a proposal could be excluded have been addressed through the SEC’s no-action process. The process for staff consideration of shareholder proposal no-action requests was extensively described in the Commission’s 1976 release “Statement of Informal Proposals for the Rendering of Staff Advice with Respect to Shareholder Proposals.”[4]
When a company seeks to exclude a proposal, it submits a request to the SEC’s Division of Corporation Finance explaining the legal basis for doing so. Shareholder proponents may submit a response.
SEC staff then issue an informal no-action letter indicating whether or not they concur that the proposal may be excluded. Staff reasoning is typically brief often just a few sentences—either finding “some basis” for the company’s arguments and stating that the staff would not recommend enforcement action if the company excludes the proposal, or, if they disagree with the company’s arguments, stating that they are “unable to concur.” Staff need not address all bases for exclusion if they concur with the company on one. If staff concur, the company may omit the proposal from its proxy statement with a degree of regulatory assurance; if staff do not concur, most companies allow the proposal to proceed rather than risk enforcement action.
Only a court can definitively determine whether an exclusion is validly applied. Therefore, the informal staff opinions are nonbinding. Nevertheless, the shareholder proposal no-action process has historically provided a relatively fast and even-handed avenue for guiding company action and developing interpretive guidance under Rule 14a-8.
Provisions promulgated in Rule 14a-8 reinforce fairness in the conduct of this informal process:
Rule 14a-8(k) provides that the proponent “should try to submit any response to [the SEC staff], with a copy to the company, as soon as possible after the company makes its submission. This way, the Commission staff will have time to consider fully [proponent’s] submission before it issues its response.”
Rule 14a-8(g) provides that “Except as otherwise noted, the burden is on the company” to persuade the Commission or its staff that it is entitled to exclude a proposal.
November 2025 Announcement
In November 2025, the SEC’s Division of Corporation Finance issued a statement announcing a policy applicable to the 2026 proxy season on how staff will assess and respond to company notifications under Rule 14a-8(j).[5] Under this policy, which was reportedly justified by a 2025 government shutdown that strained SEC staff resources, a company intending to exclude a shareholder proposal was still required to notify the Commission pursuant to Rule 14a-8(j), but the staff would not respond to the request or express any view on the company’s intended basis for exclusion. The Division reserved a single exception: where a company seeks to exclude a proposal under Rule 14a-8(i)(1) as an improper subject for shareholder action under state law.
To the extent that a company wanted a written response from the SEC regarding its exclusion notice, the policy provided for the staff to issue a letter, when requested by a company, stating that, based solely on the company’s or counsel’s unqualified representation and without evaluating its merits, it would not object to the omission of the proposal.
This no-objection process departed from the explicit terms of Rule 14a-8 in two distinct ways:
In issuing such “no objection” letters staff failed to accommodate and consider the proponent’s perspectives, a clear departure from the intent of Rule 14a-8(k);
The staff did not place the burden of persuasion on the company, instead accepting the company’s perspective without evaluating its persuasiveness, which is wholly inconsistent with Rule 14a-8(g).
Implementation of Rule 14a-8 by the Commission and the affected parties has historically depended on a combination of administrative oversight, evolving staff interpretation, and iterative dialogue between companies and investors. With the administrative layer removed during the 2026 proxy season interpretive authority shifted directly to issuers and the courts. Dispute resolution over exclusions migrated to litigation and market pressure.
An analysis of the impacts of withdrawing the no-action process during the 2026 proxy season demonstrated that the results were not neutral.[6] Instead:
Proposals were disadvantaged that sought to surface emerging issues such as the role and risks of AI because there was no applicable staff guidance for application by issuers and proponents.[7]
Proposals revised in form to comport with historical staff guidance on issues like micromanagement were not honored by receiving companies, leading to the exclusion of proposals that, in the normal course of the no-action process, would have been re-evaluated for consistency with the rules.
Issuers excluded proposals based on a risk assessment of whether they were likely to be subject to an injunctive suit by the proponent. In particular, issuers assessed that smaller shareholders with fewer resources were less likely to sue, rendering their proposals more easily excludable. Petitioners conclude that the abandonment of the no-action process was neither beneficial, in the public interest, nor consistent with the SEC’s mission to protect investors and maintain fair, orderly, and efficient markets.
Companies requested and received no-objection letters for proposals on topics for which the staff had consistently over the years refused to concur in a company’s analysis as a basis for exclusion, such as those relating to political spending.
Six lawsuits were filed by proponents seeking injunctive relief to include proposals on the proxy.
The suspension created chaos, not efficiency. Investors who had satisfied every requirement to file a proposal, but who lacked the litigation budget to fight for inclusion in court, were effectively silenced. Issuers fared no better: stripped of substantive SEC guidance, many chose the path of least resistance and included proposals they might have legitimately excluded, simply to avoid the litigation risk of guessing wrong.
The “no objection” letters that replaced substantive review made matters worse. They permitted companies to exclude proposals without presenting evidence (the exact opposite of what the Rule requires) while proponent submissions went unread. The Division’s policy did not merely or appropriately conserve staff resources dedicated to Rule 14a-8. In effect, it repealed a fundamental element of the rule.
Additionally, issuer behavior and outcomes from the most recent proxy season cannot be treated as determinative or predictive of how a permanent system lacking the no-action process would operate going forward. Companies this season were responding to a temporary suspension under conditions of considerable uncertainty; under an established regime without a neutral referee, issuers would likely grow far more aggressive in pursuing exclusions.
VII. Recommended Reforms to the Exclusion Notice Process
The suspension of the no-action process has highlighted areas in which the Rule can be improved for the benefit of both issuers and proponents—including encouraging the parties to resolve more of these disputes prior to SEC staff review. These improvements would reduce costs, ensure the Rule’s provisions are upheld, and restore an orderly, efficient no-action process.
This petition recommends technical reforms to ensure that Rule 14a-8 procedures and proposal exclusions align with the intentions of the Rule, provide clarity to the parties, and update the exclusion process to reflect common modern practices.
Our recommended changes (set forth in Appendix A) would accomplish the following refinements to the shareholder proposal exclusion process:
1. Modify the requirements for company submissions of exclusion notices.
a. Change the deadline for filing an exclusion notice from 80 to 90 days. Specify that this deadline must be calculated in advance of the company’s print deadline or proxy filing, whichever occurs earlier. This rectifies a problem that has emerged in recent years where the window for staff review of an exclusion request has been truncated by accelerated company deadlines for printing proxy statements which precede the formal date for submission of the proxy form for EDGAR.
b. Establish a mandatory two week engagement window for the proponent and issuer to seek a negotiated agreement in the two weeks after submission of the exclusion notice, potentially eliminating the need for a staff advisory opinion.
c. Guarantees that the staff advisory opinions issued after the engagement window continue to place the burden of persuasion squarely on the issuer to present concrete evidence supporting the excludability of the proposal. This procedural safeguard precludes the issuance of “no objection” letters based on the unqualified representations of issuers while ignoring rebuttal evidence from proponents.
2. Set clear timeframes for a proponent to respond if a company requests a staff advisory opinion:
a. Allow 14 business days for responses to procedural objections (such as proof of ownership) and 30 days for responses to substantive exclusions.
b. Reinforce that the staff must consider timely submitted proponent perspectives before issuing any advisory opinion.
3. Eliminate outdated paper copy submissions requirements:
a. Excise obsolete language in the existing Rule requiring the submission of six paper copies. This would reflect the modern reality that all submissions are now processed electronically.
In addition, to the extent that the Commission proposes rescinding the no-action process, we recommend that it consider less harmful alternatives, including our proposed refinements that would reduce the demands on staff time. Other less disruptive alternatives to reduce the resource demand of the no-action process have also been successfully deployed by the staff in prior instances and should be evaluated in lieu of outright rescission of the no-action process. Notably, from 2019 to 2022, the Division of Corporation Finance staff successfully utilized a summary tracking chart[8] to record its perspective on the excludability of individual shareholder proposals for which it had received exclusion notices, but only issuing no-action letters stating a rationale in a limited number of matters where the staff identified a pressing need to clarify a specific interpretive position. This and similar resource saving alternatives must be evaluated as viable options rather than revoking the highly valued no-action process entirely.
VIII. Alternatives to Eliminating the Substantive Framework and Procedures of Rule 14a-8
We are advised that the Commission may also, beyond revoking the no-action process, consider more severe changes to the shareholder proposal rule, such as deferring entirely to state law or corporate bylaws rather than maintaining consistent federal exclusions and procedures. Doing so would severely undermine this cornerstone of U.S. corporate governance, creating unacceptable regulatory uncertainty and litigation risk for both proponents and issuers, and create impediments for access to the Rule for smaller shareholders.
If the Commission issues such a proposed rulemaking rescinding or severely curtailing Rule 14a-8, we urge the Commission to also evaluate alternatives that maintain the federal rules while eliminating the no-action process. This evaluation should include consideration of whether the current rules provide sufficient clarity, or could be refined to be more objective to avoid the need for litigation. It should also consider the potential role of engagement to promote modification or withdrawal of proposals, which would reduce the need for the no-action process.
Outright rescission of Rule 14a-8 would upset a longstanding balance between investors and their companies built around the Rule’s exclusions and procedures for submitting shareholder proposals that appear on corporate proxy statements. For example, the relevance exclusion, Rule 14a-8(i)(5), considered and refined by the Commission over numerous administrations, screens for materiality to the specific issuer, relieving companies of an obligation to respond to, and protecting shareholders from consideration of, trivial or irrelevant proposals. The resubmission exclusion, Rule 14a-8(i)(12), considers the voting outcomes from the previous years and spares shareholders and the board from perennial re-litigation of proposals that have garnered only minimal support. The eligibility thresholds for filing proposals set the entry price, demanding a genuine and durable stake before the Rule may be invoked.
The Rules provide a low-cost and uniform mechanism for proposal access across every public company. Shareholders have an impressive record of deploying this process to elevate corporate consideration of substantial near and long-term risks. Shareholder proposals often raise critical issues that the board or management might otherwise neglect, helping to counteract the natural proclivity of corporate boards and managers to bury issues that could be of concern to investors. As financial economist Michael C. Jensen observed, corporate reporting and market communications are often shaped by incentives to meet or beat market expectations rather than to present a full account of risk.[9] Former SEC Chairman Arthur Levitt similarly warned in 1998 that the drive to satisfy earnings expectations could displace faithful representation with “a game of nods and winks.”[10] Management is often incentivized to short-term profit and setting strategy accordingly, while ignoring long-term risks. These concerns remain salient today, and shareholder proposals play an important role in counteracting positive spin or corporate concealment that can range from mere puffery to greenwashing and securities fraud.[11]
Proposals have called attention to company mismanagement and poor governance, warned of company-related financial collapses, public health crises, environmental failures, labor violations, failure to demonstrate that the interests of investors are being adequately considered and addressed. They have also successfully pushed to improve the governance of emerging technologies that will be central to the 21st century. In doing so, these shareholder proposals identified material risks that management had failed to adequately address before the ultimate costs to shareholders and the company became catastrophic and undeniable.[12]
Eliminating the Rule would harm investors and markets that rely upon consistent standards and procedures for placing proposals on proxies across public companies. It would inevitably create a Tower of Babel comprised of fragmented, conflicting filing and technical requirements spanning disparate state corporate laws and idiosyncratic company bylaws. Interpretation and enforcement would become entirely dependent on the slow, costly machinery of private litigation and evolving inconsistent judicial interpretations. This would suppress the availability of the proposal process and severely reduce transparency on material investor concerns. Costly litigation would permanently destabilize the established working relationships on which issuers and investors rely. Any rulemaking to significantly alter the Rule must fully account for the systemic harm inflicted on the market and exhaustively consider less harmful alternatives, as requested by this petition.
Conclusion
The right to file a shareholder proposal that appears on the corporate proxy statement is not a courtesy extended by management. It is a foundational aspect of corporate ownership. Shares carry voting rights, and under long-established corporate and federal frameworks, those voting rights have long included the ability to put hard questions—about strategy, risk, and disclosure—before fellow owners. Because these proposals are advisory, they do not overrule management. Instead, they inform it, pressure it, and aggregate the judgment of the people whose capital is at risk. This voice is also a source of market efficiency. Engaged owners surface information, press for crucial disclosures that let the whole market price risk more accurately, and discipline managers who would otherwise be insulated from accountability. Empirical evidence on shareholder engagement demonstrates that successful, well-targeted engagements lead to positive abnormal returns at targeted firms, while unsuccessful ones are not value-destructive.[13] Curtailing that voice weakens one of the few mechanisms through which dispersed owners can hold management to account.
The reforms in this petition are narrow, practical, and overdue and will protect a right that has stood for over 80 years. The Commission should adopt them and reject other ideas that would eliminate or harmfully modify this important SEC rule.
Sincerely,
Steven Rothstein
Chief Program Officer, Ceres
Dave Wallack
Executive Director, For the Long Term
Josh Zinner
Chief Executive Officer, Interfaith Center on Corporate Responsibility
Thomas P. DiNapoli
New York State Comptroller
Sanford Lewis
Director, Shareholder Rights Group
Bryan McGannon
Managing Director, US SIF
[1]https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202510&RIN=3235-AN47 (“The Division is considering recommending that the Commission propose rule amendments to modernize the requirements of Exchange Act Rule 14a-8 to reduce compliance burdens for registrants and account for developments since the rule was last amended.”).
[2]https://www.whitehouse.gov/presidential-actions/2025/12/protecting-american-investors-from-foreign-owned-and-politically-motivated-proxy-advisors/
[3] Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8, Exchange Act Release No. 34-95267 (July 13, 2022), 87 Fed. Reg. 45,052 (proposed July 27, 2022).
[4] Statement of Informal Procedures for the Rendering of Staff Advice With Respect to Shareholder Proposals, Exchange Act Release No. 34-12599 (July 7, 1976), 41 Fed. Reg. 29,989 (July 20, 1976).
[5]https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-role-exchange-act-rule-14a-8-process-current-proxy-season
[6]https://static1.squarespace.com/static/5d1f9923ca0f4800011d443a/t/69eff37e7fe4671d80fc6256/1777333118857/
SRG+Report+Final+04.27+%2B+website+link.pdf
[7]Id. at 13. Overall, 28% of exclusions in the 2025–2026 season asserted an (i)(7) ordinary business basis. In a majority of those—roughly 64%—companies excluded proposals even though prior SEC staff precedent did not clearly resolve whether exclusion was appropriate.
That 64% category is not uniform. It consists predominantly of two types of proposals that have historically required staff interpretation: (1) revised proposals that build on earlier models but modify language or scope, often to respond to prior SEC guidance or staff determinations on issues such as micromanagement, and (2) novel or innovative proposals that introduce new topics or structures not previously addressed by staff decisions.
[8]https://www.sec.gov/divisions/corpfin/shareholder-proposals-2019-2020.pdf
[9]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1894304
[10]https://www.sec.gov/news/speech/speecharchive/1998/spch220.txt
[11]https://business.rice.edu/wisdom/companies-talk-more-clearly-when-business-booming
[12]https://www.iccr.org/reports/shareholder-proposals-an-essential-investor-right/
[13]https://www.researchgate.net/publication/253236822_Active_Ownership
Appendix A: Proposed Markup
(j) Question 10: What procedures must the company follow if it intends to exclude my proposal?
(1) If the company intends to exclude a proposal from its proxy materials, it must file its reasons with the Commission no later than 80 90 calendar days before the earlier of its print deadline or the date it files its definitive proxy statement and form of proxy with the Commission. The company must simultaneously provide you with a copy of its submission. The Commission staff may permit the company to make its submission later than 80 90 days before the company files its definitive proxy statement and form of proxy, if the company demonstrates good cause for missing the deadline.
(2) The company must file six paper copies of submit the following:
(i) The proposal;
(ii) An explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority, such as prior Division letters issued under the rule; and
(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law.
The two calendar weeks after submission of a no-action request is considered the engagement period, in which the parties have an opportunity to engage and converge on an agreement for withdrawal of the no-action request.
If the engagement period ends without agreement, SEC staff may review the parties’ submissions and issue an advisory opinion—including but not limited to all instances in which the issuer and proponent have raised contested issues that require resolution.
(k) Question 11: May I submit my own statement to the Commission responding to the company’s arguments?
Yes, you may submit a response, but it is not required. The staff will consider your submission as well as the company’s. After the company makes its submission you should try to submit any response to us, with a copy to the company, within 14 business days of receipt of the exclusion notice for any procedural objection such as proof of ownership, and within 30 days to respond to any of the enumerated exclusions as soon as possibleafter the company makes its submission. This way, the Commission staff will have time to consider fully your submission before it issues its any response. You should submit six paper copies of your response.
Investor Coalition, NY Comptroller Petition SEC to Fix – Not Gut – Shareholder Proposal Rule
July 23, 2026
For media inquires please contact Esperanza@focalpointstrategygroup.com
Petition urges Commission to adopt practical reforms that streamline the no-action process and evaluate less disruptive alternatives before considering major changes to Rule 14a-8
WASHINGTON, D.C. — A coalition of investor groups and New York State Comptroller Thomas P. DiNapoli filed a rulemaking petition today urging the SEC to recalibrate, rather than dismantle, Rule 14a-8, the federal rule governing shareholder proposals on corporate proxy statements.
The petition responds directly to SEC Chairman Paul Atkins, who told the Society for Corporate Governance recently that this season's suspension of staff review of company arguments for excluding proposals cut resource demands and suggested he may make that suspension permanent. Atkins has also floated shifting shareholder proposal oversight to state law or company bylaws, and a White House Executive Order suggested SEC consideration of scrapping the rule outright.
The petitioners - DiNapoli, Ceres, the Interfaith Center on Corporate Responsibility, the Shareholder Rights Group, US SIF, and For the Long Term - argue that if the SEC is going to do a rulemaking, there's a more efficient fix that doesn't require abandoning investor protections.
Two core asks:
Streamline the proposal exclusion process before it reaches the SEC. The petition calls for a mandatory two-week engagement window after a company issues an exclusion notice, clear response deadlines for proponents, modestly extended filing windows, and an end to obsolete paper-filing requirements — changes meant to resolve more disputes privately and make SEC review faster when it is needed.
Require the SEC to test less drastic options first. Before rescinding the no-action process, handing oversight to state law, or otherwise gutting Rule 14a-8, the petition says the Commission is obligated under the Administrative Procedure Act to evaluate less harmful alternatives — including the procedural fixes above.
The petition cites this year's experience as the cautionary tale: with substantive no-action review suspended, costs didn't disappear, they moved — onto investors and companies navigating more uncertainty, inconsistent outcomes, and litigation. As the filing puts it: "The suspension created chaos, not efficiency."
Alongside the petition, investors also filed:
Citizen petitions with nearly 32,000 signatures opposing rescission of the rule
A FOIA request (Shareholder Rights Group and Democracy Forward) seeking records on the SEC's reported "previewing" of rulemaking plans with select constituencies
U.S. Senator Elizabeth Warren (D-MA): “Rescinding SEC Rule 14a-8 would be another giveaway to corporations and their executives at the expense of workers and retirees. From preventing shareholders from bringing lawsuits on company misconduct to rolling back disclosures key to investors, President Trump’s SEC seems more interested in stifling ordinary investors’ voices than protecting their rights.”
Sanford Lewis, Director, Shareholder Rights Group: "Good regulation starts with solving the right problem. If the Commission's objective is to reduce demands on staff resources, there are practical ways to accomplish that without abandoning a regulatory framework that has served investors, companies, and the markets for decades."
New York State Comptroller Thomas DiNapoli: "For more than eighty years, shareholder proposals have been a critical tool for investors to hold boards and management accountable. The right to include shareholder proposals on corporate proxies has driven reforms that strengthened American companies and protected shareholder value. Suspending the no-action process shifted costs onto investors and companies and fostered uncertainty, inconsistency, and litigation. We’re offering the SEC a better option: targeted fixes that ease the burden on staff while keeping a neutral referee on the field. That’s good for shareholders and good for the companies we invest in.”
Illinois State Treasurer Mike Frerichs: "Ultimately, weakening or taking away the shareholder proposal process is not going to make the sustainability risks for companies go away. It’s just going to make it harder for shareholders to raise them," Illinois State Treasurer Michael Frerichs said. "So naturally I am concerned that eliminating the 14a-8 process would reduce the rights of shareholders and limit our ability to engage companies facing material sustainability risks."
Dave Wallack, Executive Director, For the Long Term: "Long-term investors need functioning institutions. The choice before the SEC is not between efficiency and investor rights—it's between thoughtful modernization and unnecessary disruption. Before abandoning a framework that has served our capital markets for decades, the Commission should fully evaluate the practical, lower-cost alternatives already on the table."
The petition calls its recommendations "narrow, practical, and overdue," and comes as the SEC weighs potential Rule 14a-8 amendments on this year's agenda.
About For the Long Term
For the Long Term (FTLT) is a nonpartisan organization dedicated to strengthening the institutions, leaders, and policies that drive long-term economic growth and prosperity. FTLT works with state financial leaders, institutional investors, and market participants to advance practical solutions that promote long-term value creation, effective stewardship, and resilient capital markets. Through convenings, research, and strategic partnerships, FTLT helps public officials and investors navigate emerging challenges—from technological change and demographic shifts to corporate governance and economic competitiveness—while building the capacity of those entrusted with managing public resources. FTLT believes that strong institutions, informed leadership, and a long-term perspective are essential to ensuring that American markets remain the most dynamic, innovative, and trusted in the world.
Additional Quotes
“Our nation's capital markets system works best when investors and companies work together. The shareholder proposal process is an essential tool that allows investors to have direct dialogue with company management about material risks to the business. Rolling back this process will cause immense harm to our capital markets and will undermine investors' freedom to engage with the companies they own.” Andrew Collier, Senior Director, Freedom to Invest, Ceres. Phone: 202-774-0171. Email: acollier@ceres.org
About Ceres
For more than 35 years, Ceres has been at the forefront of building business leadership and supporting innovative market and policy solutions to address the world’s most pressing sustainability issues. We work with investors, companies, and policymakers to advance actions that reduce emissions and build a cleaner, more resilient economy – all in a way that advances justice and equity.
“ICCR has been deeply concerned about the ways this proposed attack on shareholder rights could impact our members and the wider landscape of corporate governance and accountability. These changes being suggested by the administration would undermine a tool that generations of Americans have come to depend upon to safeguard the long-term value and viability of their investments. At a time of growing unease about the condition and direction of the U.S. economy, Chair Atkins should be seeking to strengthen rather than undermine investor protections.” Josh Zinner, CEO, ICCR email: jzinner@iccr.org
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on LinkedIn, Bsky Social, and Facebook.
"Shareholder proposals help investors identify risks before they become larger problems. Making it harder for shareholders to question management does not make those risks disappear. It simply makes it harder for companies, boards, and investors to see them." Jonas Kron, Chief Advocacy Officer, Trillium Asset Management, LLC email:jkron@trilliuminvest.com
About Trillium Asset Management, LLC
Trillium Asset Management offers investment strategies and services that seek to advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on responsible investing. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership.
“Communication between investors and their portfolio companies is mutually beneficial. Restricting investors' ability to express their preferences directly —through filing or voting on shareholder proposals — will produce votes against directors that convey no clear or constructive signal to the companies." Elizabeth R. Levy, CFA, Managing Director, Clean Yield Asset Management email:liz@cleanyield.com
About Clean Yield Asset Management
For more than 40 years, Clean Yield Asset Management has used the power of investing to meet the financial goals of our clients while moving society toward a more just and sustainable future. Clean Yield works with individuals, families, family trusts, foundations, and aligned nonprofit clients to implement an investment strategy aligned with their progressive values. Our strategies ensure that our clients' investments are not only financially rewarding but also aligned with their values and contributing to a more sustainable world.
“The shareholder proposal process benefits the entire capital market value chain, not just proponents. Shareholder proposals are one of the few formal mechanisms investors have to raise material governance and risk issues directly with boards. The process is an efficient means to surface existing and emerging risks and increases transparency leading to better investment decision making.” Bryan McGannon, Managing Director of US Sustainable Investment Forum bmcgannon@ussif.org
US SIF Sustainable Investment Forum
They are the preeminent voice advancing sustainable investing. Members, who represent $5 trillion in assets under management or advisement, support US SIF’s mission to rapidly shift investment practices toward sustainability, focusing on long-term investment, the generation of positive social and environmental impacts and supporting the shift toward a more resilient and equitable planet and society. https://www.ussif.org
Governance Proposals Dominate the 2026 Proxy Season
These are highlights from an article posted by ISS-Corporate analyzing the 2026 season.
Shareholder Proposal Volume Falls to a Five-Year Low
Against these backdrops, the overall volume of shareholder proposals submitted and advanced to a vote has declined to a five-year low.
While the overall volume of proposal submissions and those appearing on the final ballot declined, governance-related proposals recorded an increase in overall volume. This relative resilience highlights the continued prioritization of core shareholder rights and board accountability mechanisms among investors as well as changes in proponents’ tactics.
In contrast, environmental and social proposals extended their downward trajectory with further declines in both the number of proposals submitted and proposals voted, reflecting a more selective investor approach toward these topics. Anti-ESG proposals, which had been rapidly increasing in volume, saw a decline as well, though they continue to comprise a meaningful portion of overall proposal volume.
The shift in proposal activity likely reflects a combination of factors, including the evolving political and regulatory landscape, the mixed success many environmental and social proposals have achieved in recent years, and the impacts of recent SEC actions.
Changes to the SEC’s shareholder proposal framework and no-action process appear to have altered the calculus for proponents, potentially discouraging some submissions while incentivizing others to pursue a more focused strategy. As a result, some proponents appear to have reduced proposal activity altogether, while others have become more selective in targeting issues and companies, or have redirected their efforts toward governance-related topics that historically receive broader shareholder support and face fewer ideological headwinds.
Taken together, these developments suggest that rather than signaling a diminished interest in environmental and social issues, the decline in proposal volume may reflect a strategic recalibration by proponents seeking to maximize impact and improve the likelihood of gaining meaningful shareholder backing.
ISS-Corporate’s Approach to Proxy Season Insight
The 2026 proxy season highlights significant changes in shareholder proposal activity. While overall proposal volume declined, governance-focused proposals remained resilient and continued to receive the strongest investor support, highlighting sustained shareholder focus on board accountability and shareholder rights. Meanwhile, environmental and social proponents appear to be recalibrating their tactics, adopting a more targeted approach.
As the 2026 proxy season concludes, these trends offer important signals about evolving investor priorities and the issues most likely to shape shareholder engagement and voting decisions in the years ahead. ISS-Corporate’s Compensation & Governance Advisory team helps companies analyze shareholder proposal trends, benchmark governance practices against market expectations, assess potential areas of shareholder concern, and develop engagement and disclosure strategies that align with investor priorities. Through data-driven insights and practical governance guidance, we support boards and management teams in preparing for future proxy seasons and strengthening shareholder relationships in an increasingly dynamic governance landscape.
Investors should be alarmed by the retreat of the Big Three asset managers from corporate stewardship
Andrew Behar, April 23, 2026
Not long ago, Larry Fink was writing annual letters to CEOs declaring that “climate risk is investment risk.” BlackRock, Vanguard, and State Street, the Big Three asset managers collectively controlling roughly $25 trillion, were telling corporate America that workforce diversity drives financial performance, that executive pay had to be tethered to long-term value, and that companies ignoring environmental risk were companies ignoring shareholder risk. That stance wasn’t altruism. It was investing logic grounded in deep research and fact.
That logic hasn’t changed. What changed is the political weather.
Under sustained pressure from state attorneys general, congressional threats, and an orchestrated anti-ESG campaign, the Big Three have systematically dismantled the very voting policies they spent years constructing. A new analysis of their 2026 proxy voting guidelines, compiled by Weil, Gotshal & Manges, reads like a before-and-after of institutional capitulation. The reversals are not subtle.
State Street’s policy no longer expects companies to disclose climate transition plans, emissions targets, Scope 3 data, or net-zero pathways. During engagement meetings, State Street now instructs itself to remain in “listen-only mode” during any discussion of climate targets.
BlackRock’s climate focus has narrowed from all companies to only those facing “material climate-related risks,” a loophole large enough to drive an oil tanker through. Vanguard has deleted the language requiring that board oversight failures on environmental and social risk trigger accountability votes against directors.
On workforce diversity, the retreat is equally stark. BlackRock no longer expects companies to disclose their approach to diversity, equity, and inclusion and has removed references to EEO-1 reporting as a baseline for workforce transparency. State Street, which famously placed the “Fearless Girl” statue in front of Wall Street’s Charging Bull, no longer expects any specific DEI disclosure and will not discuss diversity targets with companies.
Vanguard has excised “personal characteristics” like gender and race from its definition of board diversity altogether. These are not refinements. These are board-level decisions that will have negative financial consequences for their clients.
Systemic risk
The financial case for these commitments was never speculative. As You Sow’s research across 1,641 companies over five years demonstrated that greater workforce diversity correlates with outperformance on eight key financial measures: enterprise value growth rate, free cash flow per share, income after tax, long-term growth mean, 10-year price change, mean return on equity, return on invested capital, and 10-year total revenue compound annual growth rate. The data is not ideological. It is the kind of evidence-based analysis investors and asset managers are supposed to demand as a basic fiduciary responsibility, before allocating capital.
The Big Three are not merely asset managers. They are the largest shareholders in virtually every major publicly traded company in America. When they vote, they move markets. When they go silent on climate risk, they give corporate boards permission to look away. When they stop evaluating board diversity, they remove the single most effective mechanism shareholders have to hold boards accountable for the composition of their oversight function.
The downstream consequence falls not on the asset managers — they collect their fees either way — but on the underlying investors: pension funds, endowments, retail shareholders, retirees who cannot diversify away from systemic risk.
This is precisely the problem with surrendering long-term risk analysis to short-term political winds. Climate change does not operate on an election cycle. Extreme weather events, regulatory disruption, stranded assets, and supply chain fragility are not hypothetical future scenarios — they are present tense, priced into insurance markets, and showing up on balance sheets now. Boards that lack the expertise or mandate to oversee these risks are not just bad on governance grounds; they are expensive to own.
As You Sow’s own As You Vote 2026 Proxy Voting Guidelines take a different view of what responsible stewardship looks like. We continue to vote against directors who fail to set Paris-aligned net-zero targets. We oppose board slates lacking gender diversity below 40% female or racial diversity below 40% non-white. We vote against CEO pay that exceeds 100 times median worker pay, because the data shows that extreme pay disparity destabilizes corporate culture and distorts executive incentives away from long-term performance. We support transparent disclosure of political spending, because investors deserve to know whether their capital is financing lobbying that contradicts the company’s own stated strategy and values.
None of this is radical. It is the application of risk analysis, the fundamental job of any investor who intends to hold diversified portfolios over a horizon longer than the next quarterly earnings call.
The Big Three’s retreat will not go unnoticed by the companies they own. Corporate boards are watching, and the signal they are receiving is that the largest shareholders in the room have stood down. That is a signal that responsible investors, those who manage capital across decades, not news cycles, should consider very carefully.
Markets cannot price risk they refuse to measure. And stewards of capital who stop asking the questions do not stop bearing the consequences of the answers.
Even Musk Admirers Should Be Troubled by SpaceX’s Governance
Posted by Lucian Bebchuk (Harvard Law School) and Kobi Kastiel (Tel Aviv University), on Tuesday, June 2, 2026
This is an excerpt from an article posted on the Harvard Law School Forum on Corporate Governance.
SpaceX is planning to go public in mid-June with a governance structure that would free Elon Musk from constraints on his power. Many investors regard Musk’s talents so highly that they might be willing to overlook this lack of constraints. In their view, freeing Musk from constraints would not be a bug but a beneficial feature. However, the loosening of constraints on Musk’s power should be viewed as troublesome even by his most fervent admirers.
(We wrote a post earlier about this subject based on media reports published prior to the release of the SpaceX prospectus. Now that the prospectus has been released, the discussion below updates and further develops our earlier critique.)
To understand the governance problems of SpaceX, it is important to distinguish among different types of investor beliefs about Musk. One set of investors views Musk as having the best ability to maximize the size of the SpaceX pie (that is, the total value that the company will generate to be shared among its shareholders). Such investors might favor governance provisions that would enable Musk to set company strategy with minimal interference from outsiders.
However, there are at least four aspects of the IPO structure that should nonetheless trouble these Musk admirers. First, a belief that Musk knows best how to maximize the pie does not necessarily imply any belief about how Musk would split that pie between public investors and himself.
A major role of corporate rules and governance arrangements in public companies is to constrain the extent to which insiders can split the pie in their favor. The design of the SpaceX IPO — namely, the company’s incorporation in Texas combined with the wide array of provisions in its charter — would give Musk expansive freedom not only to set the company’s strategy as he sees fit but also to allocate the pie as he wishes.
Among other things, Musk would be free (by an explicit provision of the charter) to take for himself any business opportunities presented to SpaceX. He would also be able to arrange related-party transactions that would benefit himself at the expense of public investors, sell himself a large fraction of SpaceX’s assets at a favorable price, and secure giant pay awards. Musk would be able to make such decisions in ways that would confer very large private benefits on him; he would then obtain a substantially disproportionate slice of the pie, leaving public investors with considerably less than their pro rata share.
Second, a strong belief that Musk is by far the best leader for SpaceX now and in the coming years does not imply that he will remain so forever. The pages of business history are full of individuals who were at the very top of their game at one time but later turned subpar and value-destroying.
Accordingly, even the most fervent fans of Musk should worry that Musk’s control is so deeply hard-wired into the SpaceX structure. Can they be certain that Musk, who is 54, will still be a fitting leader at 74 or 84? And if he were to pass away, or become incapacitated or incompetent, control would presumably pass to his heirs or to those managing the trusts through which he holds his superior-voting shares. The prospectus does not disclose who these individuals are, making any assessment of this risk difficult.
Third, even if Musk were to remain the most fitting leader for decades, his incentives would matter. For any given leader, performance could be affected substantially by how closely his interests align with those of public investors. It is therefore important to recognize that the SpaceX structure would enable Musk to cash out any fraction of his equity stake without weakening his lock on control. If Musk were to move to a small-minority controller structure, public investors would be significantly harmed. (For a detailed analysis of the value-reducing costs associated with such a structure, see our article The Perils of Small-Minority Controllers.)
Fourth, no matter how exceptional a leader is believed to be, his performance will likely depend on the time and attention he devotes. At Tesla, despite Musk’s massive pay package, he was not required to limit his outside activities or commit any specific amount of time and attention to the company. Musk took advantage of that freedom by spending substantial time away from Tesla during the months in which he focused on the Twitter acquisition and subsequently on leading DOGE. Importantly, although the IPO design of SpaceX includes an ironclad commitment not to remove Musk from the CEO and Chair positions, Musk would be entirely free to choose how much time and effort to spend elsewhere.
Of course, none of these risks is certain to materialize. But they are all serious risks. Even investors who believe that Musk walks on water should give these risks significant weight when assessing how much they are willing to pay for SpaceX shares.
Defend Shareholder Rights: A Citizens Petition
Promoted by Shareholder Rights Group, Interfaith Center on Corporate Responsibility, Friends of the Earth, Green America, and Public Citizen
Endorsed by 19,245 Individuals or Organizations as of July 20, 2026
To: Securities and Exchange Commission
Dear Chairman Atkins and Commissioners Peirce and Uyeda,
We write as retirees, pension beneficiaries, and individual and institutional investors whose savings depend on the integrity of America's capital markets. We urge you to preserve the shareholder proposal rule as a cornerstone of property rights and free-market accountability.
Shareholder proposals are an expression of ownership. For eighty years, the ability of shareholders to raise questions before the companies they own has been one of the most effective free market-based checks on corporate mismanagement. The need for regulators to intervene is reduced when owners can speak directly. That is the genius of the system — and precisely what is at risk.
Shareholders have advanced sound governance of their companies through decades of governance reforms, adopted first through the shareholder proposal process and then as general market practice.
When investors ask a clothing retailer to account for supply chain vulnerabilities, they are protecting brand equity and long-term profitability. When they ask a pharmaceutical company to address legislative risk embedded in its earnings guidance, they are doing the analytical work that sound investing requires. When they flag water scarcity exposure for agricultural, beverage, semiconductor, or mining companies, they are surfacing risks that conventional financial filings routinely omit — risks that eventually become losses borne by ordinary shareholders.
Other investors have a right to inquire whether environmental or social commitments of a company are undercutting shorter term profitability. Regardless of the time horizons of investing, this is a critical right of investors to engage a fundamental American value — the marketplace of ideas.
If the shareholder proposal process is curtailed, the practical result is not quieter markets. It is a transfer of power: away from diverse owners, and toward a narrow class of the largest institutional players. Smaller investors — retirees, pension funds, individual savers — will lose one of the only shareholder protection tools scaled to their resources. Blind spots will accumulate. Risks that could have been surfaced early will compound, spreading across companies and sectors until they become systemic.
The boards and executives of public companies should answer to their owners. That principle is not progressive or conservative — it is foundational to capitalism.
We urge the Commission to honor its mandate to protect investors and maintain fair, efficient markets by keeping this rule intact.
Let America's public companies be guided by their shareholders — not shielded from them.
This petition is sponsored by investment organizations: Interfaith Center on Corporate Responsibility, the Shareholder Rights Group, US/SIF, Freedom to Invest and For the Long-Term.
Shareholder Proposals and Corporate Governance in a Season of Regulatory Uncertainty
Access the full text here.
Executive Summary
In the 2026 proxy season, the Securities and Exchange Commission (SEC) Division of Corporation Finance upended a long-standing practice of issuing informal decisions on whether shareholder proposals are excludable by the companies receiving them.
Although the SEC shareholder proposal rule, Rule 14a-8, remained in force, the SEC’s administrative dispute resolution mechanism—neutral staff review through the no-action process—was gone. The Division cited resource constraints and the sufficiency of existing guidance to justify suspending the no-action process for the current proxy season. As it stated on November 17, “due to current resource and timing considerations… as well as the extensive body of guidance from the Commission and the staff available to both companies and proponents… the Division has determined to not respond to no-action requests…” How did these changes affect the ability of shareholders to use the proposal process to raise potentially material issues with their companies and fellow shareholders? How did the SEC’s absence as a neutral arbiter of exclusion claims affect how issuers and proponents behaved? How did it affect the efficiency and effectiveness of the shareholder proposal process as a means of placing important questions before shareholders on corporate proxy statements? This analysis examines how the shareholder proposal process functioned during the 2025–2026 proxy season to identify patterns in how companies and shareholders navigated the process in the absence of routine staff review, to assess issues of fairness, balance, and efficiency and to make recommendations based on the lessons from the season.
The data indicate a chilling effect on both proponents and issuers. Shareholders filed approximately 20% fewer proposals for the 2026 season. Companies filed over 100 fewer exclusion notices.
Many companies, it seems, made a prudent judgment: without SEC staff guidance on individual proposals, unilateral exclusion carried too much risk, including proponent litigation, reputational risk, potential fuel for a proxy fight over director elections, and other concerns. Rather than exploit the absence of oversight, many companies receiving proposals let the proposals go to the proxy, sometimes even explicitly citing the lack of SEC guidance as their reason for including proposals they believed might otherwise be excludable. Other companies similarly situated engaged with proponents to produce settlement agreements.
The rate at which proposals were excluded by companies in proportion to the number of proposals filed, in the absence of the SEC’s informal determinations, was similar to the rate excluded last year after SEC determinations. Yet, analysis of these exclusions revealed several important trends.
Comparison of 2025 and 2026 Process Outcomes
One of most common justifications for excluding proposals was the ordinary business rule—a determination that typically turns on subjective factors and has historically benefited from substantive SEC staff evaluation. Unfortunately, the largest portion of these exclusions clearly disadvantaged proponents who were either filing proposals on emerging risks on which staff had not previously opined or had refined a prior proposal’s language to address prior SEC staff concerns about prescriptive language. In both categories, the absence of SEC involvement undermined an orderly process and fair resolution of disputes over excludability, allowing exclusions to proceed despite the lack of staff guidance.
This exclusion trend is particularly troubling for proposals addressing an issue on which the staff has never opined. Even if the proposal concerned a significant emerging risk, exclusion could proceed despite the lack of staff guidance.
For example, at proposal at Amazon requesting company-specific disclosure of workforce risks tied to evolving U.S. immigration policy was excluded despite the absence of prior staff guidance on the topic. Proponents sought analysis of how recent and anticipated changes to immigration rules—particularly those affecting H-1B visa holders, warehouse labor, and truck drivers—could disrupt workforce, logistics capacity, and operating costs. Given the scale of Amazon’s workforce and reliance on these labor segments, this is an issue that a reasonable investor could view as financially material and decision-useful, yet the proposal was excluded without the benefit of any staff position addressing similar subject matter.
Similarly, on a year-to-year basis, the SEC sends signals to proponents and issuers regarding whether proposal language is too prescriptive, allowing proponents to revise proposals accordingly. This iterative feedback loop aligns proposal drafting with evolving staff interpretations. However, in the 2026 proxy season, such revisions were not ratified by staff review. As a result, issuers exercised unilateral discretion, and even proposals that may have been revised in good faith to conform with prior SEC guidance were nevertheless excluded.
For example, at AbbVie Inc., shareholders requested that the board oversee human rights due diligence to produce an impact assessment identifying actual and potential adverse human rights impacts in the company’s operations and supply chain, including effects on the right to health. Notably, this proposal appears to have been drafted to be less prescriptive than a prior 2025 proposal seeking a human rights impact assessment submitted to Eli Lilly, which the staff had permitted to be excluded on micromanagement grounds. The Eli Lilly proposal explicitly mandated the assessment cover “operations, activities, business relationships, and products”. By contrast, the AbbVie proposal narrowed and generalized the request—focusing on board oversight and an impact assessment framework rather than dictating exhaustive coverage parameters. Despite this apparent effort to align with prior staff reasoning and reduce prescriptiveness, AbbVie relied on the earlier Eli Lilly determination to justify exclusion. This illustrates how, in the absence of updated staff review, even materially revised proposals that address prior deficiencies can be excluded based on inapposite precedent.
Thus, an analysis of the ordinary business exclusions reveals that exclusions during this season disproportionately blocked (i) proposals addressing emerging issues lacking precedent and (ii) proposals that had undergone compliance-oriented revisions based on prior staff signals. The absence of no-action letters was therefore not neutral—it both impeded shareholders’ ability to surface new, financially relevant risks and disrupted the established corrective process that typically refines proposal language over time.
In another significant portion of exclusions, the companies claimed that their own activities substantially implemented the proposal. SEC staff is better positioned to provide a neutral evaluation of whether the company activities go as far as a proposal requests. These determinations are not appropriately left to the issuers.
Technical grounds—such as providing inadequate documentation that the proponent owned the necessary shares, or missing filing deadlines—accounted for another meaningful portion of exclusions. Some of these deficiencies seemed clear-cut. But without a structured opportunity for proponents to respond, questions remained about whether some of these technical exclusions rested on incomplete or disputed records that SEC staff would historically have scrutinized.
The disappearance of routine administrative review also caused at least six proponents to bring their disputes into federal court. Three of these cases resolved quickly after the companies agreed to include the proposals or provide the requested disclosure. These cases underscore how, in the absence of staff intermediation, formal legal action began to substitute for what had previously been an administrative and negotiated process. As proponent driven litigation became the primary enforcement mechanism for Rule 14a-8, a structural imbalance also took shape: the ability to defend a proposal increasingly depended on having the financial and legal resources to sue, in contradiction of the rule’s share ownership thresholds—which were designed to give even modest Main Street shareholders a voice.
This shift reflects a broader reconfiguration of how the rule operates in practice. Rule 14a-8 has historically depended on a combination of administrative oversight, evolving staff interpretation, and iterative dialogue between companies and investors. When the administrative layer was removed, interpretive authority shifted to issuers, and dispute resolution migrated to litigation and market pressure.
In that environment, the dynamics between proponents and companies changed materially. Proponents—who typically seek collaborative engagement with the company and dialogue with fellow shareholders—were forced into a position where they must consider escalation, including litigation, to ensure inclusion of proposals on the proxy.
The report concludes with five key recommendations for strengthening Rule 14a-8 and the shareholder proposal framework:
Preserve Rule 14a-8. The shareholder proposal mechanism is a vital communication channel between investors and corporate management. Weakening or eliminating it would undermine shareholders’ ability to raise governance concerns and hold management accountable.
Restore the no-action process. The SEC should revive its administrative process for resolving proposal exclusion disputes. Without it, conflicts are pushed into costly federal litigation or contentious shareholder campaigns. Some streamlining is possible for clear-cut procedural defects, but contested or fact-dependent claims still require meaningful staff review.
Eliminate “no-objection” letters. The practice of issuing no objection letters based solely on a company’s own unverified representations is inconsistent with Rule 14a-8’s intent. It implies administrative endorsement of unilateral exclusions regardless of consistency with the rule, and should be discontinued.
Issue clearer, more objective guidance. While appropriately restoring clarity about ensuring that proposals are relevant to the companies receiving them, Staff Legal Bulletin 14M also introduced excessive subjectivity into key exclusion determinations—particularly on “ordinary business” and “micromanagement” grounds. The subjective criteria provide staff with too much discretion; returning to more objective standards would improve predictability and reduce the need for repeated case-by-case adjudication.
Protect smaller shareholders’ access. Any reforms should ensure the process remains accessible to individual investors and smaller asset managers, who are unlikely to pursue litigation and who have historically filed some of the most important proposals on potentially material issues for their companies.
The 2025–2026 proxy season ultimately demonstrates both the resilience and the fragility of the shareholder proposal system. Shareholders kept raising concerns about governance, risk oversight, and corporate conduct. Some companies kept engaging constructively. But the absence of consistent regulatory oversight has introduced uncertainty, uneven outcomes, and shifted investor-company relations onto a more adversarial footing, dependent on litigation and escalatory tactics, rather than orderly SEC staff assessment of whether a proposal is consistent with the rule.
Preserving Shareholder Rights Protects Workers, Retirees, and the Integrity of American Capital Markets
March 26, 2026
Posted by Elizabeth Steiner, Oregon State Treasurer
Securities and Exchange Commission (SEC) Chair Paul Atkins recently reiterated his preference to loosen corporate accountability standards at a conference hosted by the Council of Institutional Investors. As the fiduciary for a state pension fund, I believe that weakening shareholder engagement creates risks that beneficiaries and state governments cannot afford.
Stories of CEOs raking in multimillion-dollar bonuses while middle-class workers struggle to pay rent or save for retirement have become all too familiar. Those disparities didn’t arise overnight but they have sharpened investor and public scrutiny of corporate governance. That’s why the federal administration’s effort to weaken shareholder rights is so concerning. Shareholders must have a voice in corporate governance given the capital they have invested in American businesses.
As Oregon State Treasurer I am charged with managing a diversified institutional portfolio of more than $148 billion in assets under management, including the Oregon Public Employees Retirement Fund (OPERF), one of the largest public pension funds in the country. Treasury staff invest these assets to achieve strong, risk-adjusted returns for beneficiaries. Public employees’ and retirees’ financial security depends on the long-term health of the assets we help steward.
We take our shareholder stewardship role seriously. During the 2024 proxy voting season Oregon Treasury voted in 5,333 meetings on over 50,305 individual items. The proxy votes we cast and the shareholder rights that underpin them are tools we use every year in service of the workers and retirees whose money is entrusted to us.
In December I urged SEC Chair Paul Atkins to reconsider recent SEC changes that restrict shareholder rights. In a letter co-signed by half a dozen state financial officers, we warned Chair Atkins that changes to the long-standing processes that protect shareholders would “suppress shareholder governance, diminish corporate transparency and accountability, and create risks to profitability and reputation for companies—further undermining the confidence that has attracted global investors to American firms and markets.”
Thanks to the efforts of shareholders, most S&P 500 companies now publish environmental, social, and governance disclosures that investors use to understand long-term risk and strategy. For example, shareholder engagement has codified “say on pay” votes. It has encouraged wider adoption of independent board leadership and strengthened oversight practices improving accountability for long-term investors. It has prompted hundreds of companies to disclose political spending with corporate funds and data on sustainability efforts.
For large institutional investors such as OPERF these votes are about value. Pension funds, asset managers, and other institutional investors representing millions of workers and retirees — including those whose pensions and savings we manage here in Oregon — advance governance improvements because these activities directly affect risk and value over decades.
Investors are owners. CEOs and corporate boards work for owners. We shouldn’t trade the shareholder voice for managerial autonomy. Weakening the proposal process by stripping the SEC of its oversight role, raising burdensome thresholds, or shifting governance to a patchwork of state laws would reduce transparency and leave investors with fewer tools to manage risk.
What’s at stake is safeguarding shareholder democracy by maintaining the SEC’s oversight role. Removing the Commission as referee would tip the balance toward management and leave investors with fewer practical tools to hold companies accountable.
American investors deserve a voice at the table. Let’s make sure it continues to be heard.
Please access the full article here.
Investor Representatives File Lawsuit Challenging Unlawful Restriction of Shareholder Rights
March 19th, 2026
Lawsuit Seeks to Block Change by SEC that Encourages Companies to Exclude Shareholder Proposals from Company Proxy Materials
A pair of investor representative groups dedicated to corporate responsibility and the rights of investors today filed a legal challenge to a new policy from the Securities and Exchange Commission’s (SEC) Division of Corporation Finance. The policy undermines a long-standing rule that governs shareholder proposals, which have been a linchpin for decades of productive engagement between companies and shareholders on matters related to long-term corporate value.
The Interfaith Center on Corporate Responsibility (ICCR) and As You Sow, represented by Democracy Forward, seek to stop implementation of the new policy, which gives companies an effective rubber-stamp from the SEC to stop investors from presenting and voting on proposals regarding issues directly relevant to a company’s long-term performance and risk profile.
The SEC’s revised policy allows companies to omit shareholder proposals by filing a simple letter and receiving a “No Objection” statement from the SEC, without benefit of any analysis by the SEC of the company’s claims or proponents’ response. Omitting a proposal from the company proxy prevents shareholders from making and voting on proposals that raise concerns about a company’s long-term performance and risk profile.
“The SEC’s actions in undermining the shareholder proposal process are a short-sighted departure from decades of precedent in which shareholder proposals, a critical tool in a private ordering process, have led to important improvements in corporate governance and corporate practices that benefit both companies and investors. This long-standing process has given generations of American investors greater voice and power, in turn helping build a stronger and more dynamic economy, and safeguarding the investments that millions of American families depend upon,” said ICCR CEO Josh Zinner.
“Both companies and investors benefit from the give and take provided by the shareholder proposal process,” said Danielle Fugere, President & Chief Counsel of shareholder representative As You Sow. “Eroding shareholders’ right to bring issues of concern to a vote of shareholders weakens an important check on company action and reduces information to shareholders. Since proposals are generally non-binding, the only real benefit of these changes appears to be shielding companies from having to consider hard issues that would be easier to sweep under the rug. This ultimately weakens the fundamentals of capitalism and investor confidence in the market.”
The SEC has long had an effective process, pursuant to Rule 14a-8, that generally requires companies to include shareholder proposals in a company’s proxy materials unless a company challenged the proposal. Under the prior process, SEC staff exercised its independent judgment by assessing the validity of a company’s claim that the proposal could be excluded. Proponents and companies were not formally bound by the SEC’s decision, but they almost universally respected them as conclusive. Under the new process, a company need not meet Rule 14a-8’s burden of proving that their omission of a shareholder proposal is justified. Now, the SEC accepts at face value a company’s “unqualified representation” and issues a letter stating that the SEC has “No Objection” if the company omits the resolution.
“The new SEC policy is an undemocratic hall pass to corporate mismanagement that sends a message to investors to ‘sit down and shut up’ about how the company they own is managed,” said Skye Perryman, President and CEO of Democracy Forward. “This policy is inconsistent with existing SEC rules, and was adopted without following the legally-required process to consider a policy change. We are honored to work with corporate responsibility advocates to challenge this new policy and to fight for the rights of shareholders to have a say in how their investments are managed.”
The case is ICCR et al. v. SEC et al. in the U.S. District Court for the District of Columbia. The legal team at Democracy Forward on this case includes Simon Brewer, Brian Netter, and Victoria Nugent.
Read the complaint here. Access the full article here.
Democracy Forward Foundation is a national legal organization that advances democracy and social progress through litigation, policy, public education, and regulatory engagement. For more information, please visit www.democracyforward.org.
Why Would the SEC Silence Shareholders?
By Steven M. Rothstein and Peter Flaherty
Feb. 24, 2026
The original article was posted on WSJ.
Markets work best when businesses are guided by owners.
We head nonprofit organizations concerned with corporate governance and policy and are often on opposite sides of important issues. But we agree on this: When shareholders’ voices are silenced, our capital markets lose accountability. The system becomes more political, not less.
Paul Atkins, chairman of the Securities and Exchange Commission, recently suggested that the shareholder proposal process be shut down. He would do this by deferring to state law to determine whether nonbinding shareholder proposals are a “proper subject” for inclusion in proxy materials—stepping back from the SEC’s longstanding role as referee between companies and proponents. Since it is impractical for activists to sue under state law every time a proposal is filed, Mr. Atkins would essentially hand the decision over to management.
He says he wants to reduce regulatory disclosures, but shareholder proposals aren’t disclosures imposed by regulators. They are communications initiated by shareholders, the company’s owners, directed at fellow shareholders.
Mr. Atkins contradicts his own past statements. In a 2003 address, during an earlier term as a commissioner, he affirmed that “stockholders own the corporation.” That principle hasn’t changed. What has changed is the political climate. Politics rather than the underlying logic of ownership increasingly dictates how certain issues are framed and who has the power to speak.
On issues like diversity, equity and inclusion, shareholders routinely file proposals on opposite sides: Some urge companies to expand DEI initiatives, while others call for their reduction or elimination. Closing the process doesn’t remove politics from markets; it prevents owners from resolving policy disagreements through market mechanisms.
Shareholder proposals aren’t mandates or regulations. They are tightly constrained requests—limited to 500 words—that allow owners to place an issue before fellow shareholders for a vote. Even when proposals receive majority support, companies aren’t legally required to act. What they are required to do is listen.
For decades, shareholder proposals and the SEC’s adjudication process over whether a company may exclude a proponent’s resolution—known as a “no-action relief” decision—have been a feature of U.S. capital markets, supporting governance and long-term risk management. The SEC Division of Corporation Finance has already stopped responding to most no-action requests. This marks a break from that role and—as Caroline Crenshaw, who stepped down as an SEC commissioner last month, warned—threatens shareholder democracy. Critics say shareholder proposals are excessive or misused, but the system includes safeguards that allow companies to exclude proposals that are irrelevant, duplicative, vague or improper.
Markets work best without political interference and without government-imposed silence—when businesses are guided by their owners, not by regulators deciding which voices count.
Mr. Rothstein is chief program officer of Ceres. Mr. Flaherty is chairman of the National Legal and Policy Center.
Elizabeth Warren Writes SEC Chair Atkins on Executive Order
Senator Elizabeth Warren, in her capacity as Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Securities and Exchange Commission (“SEC”) Chairman Atkins, in response to an White House executive order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors” (the “Executive Order”). Senator Warren’s letter argues that the Executive Order seeks to undermine investor influence over the management of public companies by asking the SEC to conduct a “sweeping review aimed at unwinding policies designed to help shareholders influence the actions of corporate directors.” Among other things the letter points to the Executive Order’s direction that the SEC review, and possibly revise or rescind, Rule 14a-8.
Senator Warren concludes by asking the SEC to explain how compliance with the Executive Order will impact institutional investors’ ability to make “timely, informed voting decisions,” as well as the impact that compliance will have on other agency actions.
Link to executive order.
New Securities and Exchange Commission Policy Bars Main Street Investors From Posting on Its Public Database
Shareholder Rights Group asks the SEC to rescind policy change
January 28, 2026 — The U.S. Securities and Exchange Commission Division of Corporation Finance announced last week that it will bar shareholders who own less than $5 million in a company's stock from use of the SEC's EDGAR database, which heretofore was a taxpayer-paid public service for stockholders of all sizes to share material information ahead of upcoming stockholder meetings.
On January 28, representatives of the Shareholder Rights Group and other organizations, including Ceres, the AFL-CIO, Interfaith Center on Corporate Responsibility and As You Sow met with representatives of the Division of Corporation Finance to express concerns about this new policy as well as other recent developments that undercut shareholder rights.
For decades, stockholders of every size have posted informational filings, called exempt solicitations, to the SEC website as part of their efforts to provide fellow investors with material information and recommendations ahead of stockholder votes. The posting via EDGAR, together with other dissemination, helps to ensure that the notices reach fellow shareholders and analysts. By cutting off this channel, the policy erects a very high bar that Main Street investors cannot meet - in order to share the information via Edgar, one must hold $5 million in shares in a single company of concern. This effectively reserves the SEC platform as available only to the largest investors.
Sanford Lewis, Director and General Counsel of the Shareholder Rights Group, was among the delegation who met today with representatives of the SEC Division of Corporation Finance. In the meeting, he urged the Division on behalf of the Shareholder Rights Group, to rescind the new policy:
The SEC's EDGAR database is the leading public forum and record for disclosures regarding upcoming annual meeting votes.The new measure strikingly tilts the playing field and this public record - allowing companies to post to the SEC record their solicitations regarding support for directors or other company initiatives and opposition to shareholder proposals, but cutting off access for most investors to respond.
The SEC Division of Corporation Finance should immediately reverse this guidance and restore equitable access to EDGAR for notices of exempt solicitations, or risk further eroding investor confidence and market transparency.
Lewis also notes that the new exempt solicitations policy change is unfair, unnecessary, and contrary to the SEC’s investor protection mission.The result is direct harm to investors and the market as a whole. Capital markets function best when participants have access to more information, not less. These policies severely disadvantage Main Street investors, aligning with the current administration’s apparent tilt toward wealthy, plutocratic interests, and also harm companies by eliminating notice of their shareholders’ activities, reducing visibility into their own investor base and eliminating an opportunity to respond and for a record of investor-company dialogue to be accessible within the SEC database.
Posting these notices on EDGAR does not expend substantial taxpayer funds – the system is automated. It is hard to discern a justification for the change in guidance, other than as part of the broader, coordinated rollback of shareholder rights reflected in the SEC’s decision to suspend substantive no-action relief for the 2025-2026 season and signals about paring back Regulation S-K disclosures.
The imposition of this new and discriminatory policy withholds a public right from smaller shareholders and blocks all but the largest investors from participation. The implications seem to be that only the wealthy can participate and only the rich have insights or ideas worthy of consideration, resulting in the democratic ideals of fair play and equal access being lost.
See also the statement from ICCR.
Conservative Investor Group, NLPC challenges recent SEC policies
This article includes excerpts from the original publication. To access the full text, go to National Legal and Policy Center.
Atkins’ SEC: Where Billionaires and Their Woke Corporate Allies Find Protection
by NLPC staff, 27th January, 2026.
With the Trump administration, we were promised a return to property rights and accountability. Instead, the President’s hand-picked SEC Chairman Paul Atkins has tried to mute shareholders with a muzzle professionally fitted by the same law firm that spends its days teaching “woke” CEOs how to ignore the people who actually own their companies.
The most egregious act of this new regime came on Friday. In a blunt update to its Compliance and Disclosure Interpretations, the Moloney-led staff declared they would now “object” to voluntary submissions of Notices of Exempt Solicitations to the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) platform. NESes are informative reports that NLPC has circulated to investors at various companies over the last few years to advocate our positions on proxy voting items like proposals and board nominees.
The SEC’s excuse for this crackdown is as insulting as it is transparent. They claim these filings are used for “generating publicity.” That’s an interesting conclusion, considering no one at the SEC within the cubicles under Moloney’s authority bothered to call us to ask us what our motives are. Since NLPC, along with a few others who we assume were not consulted, were singled out as “frequent filers” of the reports, you’d think someone at the SEC might be curious.
Instead, Moloney the mind-reader and his fellow seers jumped to their own biased conclusions and took action. Atkins and Moloney have decided that if you don’t have $5 million in stock, you don’t have the right to speak on the SEC’s digital public square. They are treating the EDGAR system—a public resource—like an elite country club where the dues are $5 million, and the only topic allowed for discussion is how great corporate management is doing. We are sure CEOs like Bank of America’s Brian Moynihan, Comcast‘s Brian Roberts, and General Motors‘ Mary Barra are ecstatic at this development.
The SEC likes to pretend this is about “saving the taxpayer money” following the government shutdown. This is a flat-out lie. The EDGAR system is automated. Organizations like NLPC pay thousands of dollars a year to outside filing services to format and upload our documents (itself a costly regulatory burden, like having to pay a CPA to do your taxes for what should be a simple process). But it costs the taxpayer literally nothing for us to hit “submit” to EDGAR.
At NLPC, we’ve seen this movie before. We know that when the powerful try to silence you, it’s usually because you’re telling a truth they can’t afford to hear. Atkins and Moloney can lock the gates of EDGAR, but they can’t stop the shareholders from realizing they’ve been sold out by the very people hired to protect them.
Weinberg Center’s Distorted Interpretation of Its Shareholder Proposals Survey Data: A Critical Examination
Sanford Lewis, Director and General Counsel
Khadija Foda, Associate Counsel
Shareholder Rights Group
The Delaware-based Weinberg Center for Corporate Governance recently released a report regarding shareholder proposals based on a survey it administered in late 2025. The survey collected responses regarding participation in, and perspectives on, the shareholder proposal process from just over 500 people, including 168 investors, 156 professional advisors, 52 public company representatives, and 28 corporate directors.
While the survey generated some useful data, unfortunately the report’s interpretive analysis is marred by errors and selective framing, despite being framed as an effort to “center on facts” that can inform shareholder proposal reform discussions. The report’s distortions risk materially misinforming such debates and therefore we believe that the SEC and other policymakers should not rely on the report’s narrative description of its findings when evaluating any changes to the shareholder proposal process. The report’s characterizations have already begun to appear in media coverage and public commentary, creating a risk that its purported “findings” will be repeated without independent examination of the survey instrument, the underlying data, or the methodological limitations that directly affect the validity of its conclusions.
This analysis is intended to make clear the survey report’s methodological weaknesses and embedded biases, enabling policymakers, practitioners, and commentators to assess its claims with appropriate skepticism.
The Survey’s Distorted Analysis of Costs
The survey asked companies for total costs of shareholder proposals over four years. However, the narrative in the report describes these four-year costs as “annual” costs, leading to distorted conclusions about purported “cost asymmetries” between proponents and issuers.
Question 31 of the survey asked company respondents to “[a]pproximate total direct costs your company incurred complying with Rule 14a-8 over the past four proxy seasons.” (emphasis added). However, the survey report characterizes the question and responses as “public company representatives responding to a question about annual direct costs to comply with Rule 14a-8” (emphasis added). The report’s author reiterated this misleading conclusion in a public blog post about the survey, stating “[c]ompanies, by contrast, encounter the system episodically and firm by firm, under heavier procedural and legal constraints, and with more external legal and compliance costs – reported to exceed $500,000 annually for some larger issuers” (emphasis added).
The largest group of company respondents, nine in total, reported total direct costs over four years between $100,000 and $250,000. Seven respondents reported less than $100,000, and six respondents reported between $250,000 and $500,000. Five respondents reported costs above $500,000, and four respondents reported spending more than $1 million.
Framing these amounts as annual costs in the narrative multiplies by four the figures reflected in the data. When divided across four proxy seasons, these figures imply approximate annual costs of $25,000 or less; $25,000–$62,500; $62,500–$125,000; more than $125,000; and more than $200,000, respectively.
Further, the highest reported figures—those exceeding $1 million—are concentrated among a very small number of companies (four) that, because of their scale and impact on the economy, receive the largest number of proposals. Treating those outliers as representative risks conflating proposal volume with the marginal cost of any single proposal. For large-capitalization issuers, expenditures in the hundreds of thousands of dollars are relatively immaterial. For example, for a company with $100 billion in annual profits, $100,000 is an extremely small expense, it represents just 0.0001% of its profits—equivalent to someone earning $100,000 spending ten cents. However, in reality, any reported numbers associated with the purported “cost” of the process often collapse under basic scrutiny and, across a U.S. public market capitalization of roughly $62 trillion, the cost of shareholder democracy is not even a rounding error.
One positive takeaway from the survey is that, even as framed in the report, the figures regarding aggregate costs to companies of shareholder proposals undercut more extreme claims circulating in policy debates, where the cost of a single shareholder proposal is sometimes asserted to be $500,000 or more. *
The survey figures should also be interpreted with caution. The board and management of public companies, who typically oppose most shareholder proposals, have strong incentives to overstate costs. The self-reported aggregate cost estimates related to shareholder proposals may blur the line between proposal-related expenses and routine governance and proxy-season costs. Reviewing shareholder proposals, engaging with investors, and preparing disclosures are routine board and management responsibilities. The wording of the survey and the reported estimates do not clearly separate what is incremental from core responsibilities of board and management.
Third, companies retain substantial discretion over how costly their responses to shareholder proposals become. According to respondents, outside counsel is the primary cost driver. Decisions about whether to seek no-action relief, how aggressively to detail their objections, and how heavily to rely on outside counsel all affect reported costs. Presenting those choices as fixed structural burdens overstates the degree to which costs are imposed by the rule itself.
Survey Results
Q60: The benefits of shareholder-sponsored proposals are:
Minimal – 34.07% (n=77)
Modest – 27.88% (n=63)
Substantial – 25.22% (n=57)
Irreplaceable – 8.41% (n=19)
Other (please specify) – 4.42% (n=10)
Q61: Overall, do the benefits of Rule 14a-8 outweigh its costs?
Yes – 50.89% (n=114)
No – 27.68% (n=62)
Roughly equal – 6.70% (n=15)
Insufficient basis to judge – 10.71% (n=24)
Other (please specify) – 4.02% (n=9)
The survey’s failure to include questions about quantified benefits of shareholder proposals is further evidence of its imbalanced presentation of the costs and benefits of shareholder proposals. While the survey does ask respondents to assess the benefits of shareholder proposals in question 60, it does not ask for an associated dollar figure. Tellingly, in response to question 60, almost 62 percent of respondents selected benefits were in the range of “modest” to “irreplaceable”, whereas 34 percent selected “minimal” benefits as an option.[Q60] Moreover, almost 51 percent of respondents selected “yes” in response to question 61: “[o]verall, do the benefits of Rule 14a-8 outweigh its costs?”[Q61]
In this context, the survey commentary’s focus on the so-called “asymmetrical” costs imposed on companies by the process is telling. No analysis or estimate, symmetrical or otherwise, is provided regarding the value of the benefits.
Survey Question Bias: Framing “Legitimacy” to Exclude Non-Governance Proposals
Survey Results
Q47: Which, if any, of the following topics are outside the legitimate scope of proper shareholder proposals?
Micromanagement of ordinary business matters – 85.59% (n=202)
Not relevant to the specific company – 77.12% (n=182)
Primarily public policy issues – 48.73% (n=115)
Primarily political issues – 59.32% (n=140)
Primarily societal issues – 41.95% (n=99)
Primarily environmental issues – 35.59% (n=84)
Re-submission of topics that did not receive a majority of votes – 35.17% (n=83)
Other (please specify) – 7.63% (n=18)
The survey language and report contained evident bias against the legitimacy of so-called “environmental” or “social” proposals. Survey question 47 asked “[w]hich, if any, of the following topics are outside the legitimate scope of proper shareholder proposals?” and goes on to include the following response options. [Q47]
Q49: Which subject-matter areas are legitimate for shareholder-sponsored proposals?
Board accountability – 87.23% (n=205)
Executive compensation – 79.57% (n=187)
Takeover defenses – 68.09% (n=160)
Corporate risk – 60.00% (n=141)
Financial – 57.45% (n=135)
Strategic – 53.62% (n=126)
Environmental – 47.66% (n=112)
Social responsibility – 42.98% (n=101)
Civil or human rights – 38.30% (n=90)
Portfolio-wide or systemic risk – 37.02% (n=87)
Societal concerns – 29.36% (n=69)
Political matters – 23.40% (n=55)
Other (please specify) – 6.38% (n=15)
None of the above – 3.40% (n=8)
By grouping entire subject areas—such as environmental, societal, or political issues—together with procedural defects like micromanagement or lack of company relevance, this framing implicitly treats those subject matters as a flaw, regardless of context. The modifier of “primarily” may imply to some respondents that these are, perhaps, not addressing material or relevant issues for the company that receives them. Labeling an issue as “primarily societal” functions as a proxy for presumed immateriality or irrelevance, rather than reflecting an assessment grounded in the company’s actual operations, exposures, or governance practices. Notably, the framework does not include a corresponding category such as “primarily governance,” underscoring that these qualifiers are not neutral descriptors.
The companion question 49, which asks “[w]hich subject-matter areas are legitimate for shareholder-sponsored proposals?”, presents governance and non-governance subjects without similar qualifiers.[Q49] Regardless, the framing of response options is again problematic. Topics framed in conventional governance terms, such as “executive compensation” or “board accountability,” are comparatively uncontroversial, whereas labels like “social responsibility” are more contestable. For example, so-called “social” concerns could instead be framed as a governance issue of human capital risk oversight.
Even with this survey bias, survey respondent support for environmental, social, systemic risk, and political proposals remains substantial, often in the 30 to 50 percent range. Despite these results, the survey report concludes “[s]upport declines as topics move further from traditional governance and firm-specific economic oversight”, mischaracterizing both the nature of these proposals and the levels of respondents’ support. This interpretation also overlooks the well-known fact that many investors view environmental and social issues as potentially material investing issues at their companies because of the scope of risk involved to both short-term and long-term value. Investor support for proposals concerning these topics is consistent with empirical findings of positive correlations between ESG factors and corporate financial performance. For long-horizon investors, particularly diversified investors with broadly indexed or benchmark-tracking portfolios, support for such proposals may reflect a portfolio-level risk management strategy to manage systemic threats that can affect returns across the entire market. While the traditional “governance” topics receive the strongest support, characterizing other areas as marginal or illegitimate discounts a significant portion of respondents.
More fundamentally, the report’s reliance on “traditional governance” as a benchmark for legitimacy assumes that governance norms are fixed rather than evolving. Historically, many practices now viewed as core governance principles, such as routine financial disclosures, were once departures from prevailing norms. Movement beyond traditional categories is not inherently suspect but reflects adaptation to changing market conditions, risks, and expectations.
Moreover, the use of the term “political” in this context is itself contestable. Labeling a proposal as “political” does not reflect an objective characteristic of the proposal, but rather a judgment about the acceptability of its underlying premise. Issues are not inherently political or non-political; they may become politicized. Climate change, for example, is no more inherently political than board structure or executive compensation, yet it is routinely described as such because of opposition from actors with vested interests in the status quo.
The data regarding the level of support for environmental and social proposals among investors also reflects the range of investors responding to the survey. From the data reported, 75 of the 500 respondents to the survey have submitted at least one shareholder proposal within the last four years. In contrast, a little more than half of the investors who responded to the survey have not submitted shareholder proposals. It is well known that the largest investment organizations have little need to submit shareholder proposals because they already have access to board and management. The total numbers of respondents treating political, environmental, and social proposals as being “illegitimate” corresponds well with the number of non-proponent investors, public company representatives, and directors.
Consensus on Federal Oversight, Not a Push to the States
The Weinberg Center for Corporate Governance is based in Delaware, and therefore a significant interest of the center relates to potential state policies that might restrict shareholder proposals or enable companies incorporated in the state to limit such proposals through restrictive bylaws. A recently enacted Texas law allows companies incorporated in the state to dramatically increase the threshold shareholdings required to submit a proposal. The current federal thresholds include $25,000 of shares held for a year or $2000 held for a longer minimum holding period of three years. In contrast, the Texas law would allow companies to block shareholder proposals for any shareholder with less than $1 million in holdings in the company. Since there is concern in Delaware about competition between the states for corporate incorporations, the subtext of recent convenings by the center is whether Delaware should compete by following the lead of Texas.
In his blog post about the survey, the author, Lawrence Cunningham, suggests that the survey results show “substantial disagreement over whether responsibility for the shareholder proposal process should remain primarily federal or shift toward states,” and the survey report states “[r]espondents split about whether to retain federal authority over the shareholder proposal process or devolve responsibility to states.”
This outcome was based on survey question 66 and results:
Q66: Preferred long-term approach:
Retain rule federally, even with policy variation over time – 37.44% (n=82)
Retain federally but fix SEC flexibility to limit variation – 32.42% (n=71)
Devolve to states for local definition and administration – 13.24% (n=29)
Permit each company to define its own proposal rules – 11.42% (n= 25)
Other (please specify) – 5.48% (n=12)
The survey results contradict this conclusion. Nearly 70 percent of respondents (153 out of 219) favor retaining Rule 14a-8 at the federal level when asked about their “[p]referred long-term approach”. While respondents disagree about how much discretion the SEC should have (some preferring flexibility, others favoring clearer limits), support for devolving authority to the states or allowing companies to define their own proposal rules remains a clear minority position. Only 13 percent, or 29 respondents, favored devolution to the states, and only 11 percent, or 25 respondents, favored permitting each company to define its own proposal rules.[Q66]
This pattern holds even among public company representatives and directors. While these groups express stronger preferences for predictability and constraint, they largely support continued federal administration rather than institutional relocation (“public company representatives (n=18) express a strong preference for retaining the rule federally but curbing SEC flexibility (66.7%, n=12)” and “[a]mong public company directors (n=17), a plurality favors constrained federal retention (41.2%, n=7)”). The real disagreement reflected in the data is not about who should administer the rule, but about how flexibly it should be applied.
Redefining Ownership Thresholds
The survey failed to adequately contextualize the series of questions regarding appropriate ownership thresholds for filing shareholder proposals, which may have skewed the results toward radically divergent outcomes for shareholder and company respondents.
The survey reports that shareholders tend to favor lower ownership thresholds for eligibility, while company representatives and directors prefer substantially higher dollar- and percentage-based requirements:
“When eligibility is framed in terms of ownership magnitude—whether measured in dollars (n=220) or percentages (n=223)—responses diverge sharply by role. Among shareholders, preferences cluster toward lower thresholds: for dollar-based tests, pluralities favor thresholds in the thousands (35.6%, n=16) or tens of thousands (31.1%, n=14); for percentage-based tests, the largest portions favor less than 1% (38.3%, n=18) or 1–2% ownership (19.1%, n=9).
By contrast, public company representatives and directors gravitate toward higher thresholds. Among company respondents, 41.2% (n=7) favor dollar thresholds of $1 million or more, and 61.1% (n=11) favor percentage thresholds of 1–2% or higher.”
Respondents were not provided the essential baseline of existing Rule 14a-8 eligibility standards, which currently allow shareholders with as little as $2,000 held for three years to submit proposals. Instead, question 52 asked whether proponents should be required to meet ownership thresholds in the thousands, tens of thousands, hundreds of thousands, or $1 million or more—most of which would represent significant increases over the existing thresholds.
Question 53 went further and asked whether eligibility should require ownership of less than 1 percent, 1 percent, 2–3 percent, 3–4 percent, or more than 5 percent of a company’s shares.
These percentage thresholds would effectively eliminate all shareholder proposals. At a typical public company, those levels would translate into tens of millions, or billions, of dollars. For example, acquiring even one percent of Amazon would require an investment well above $20 billion, a level that is presumably beyond the reach of all filers—including state pension funds and other institutional investors. Even the lowest of those options would eliminate nearly every shareholder proponent currently active in the market, curtailing almost all proposals, including those addressing matters the survey report characterizes as “legitimate”, such as proposals on board structure or executive accountability.
An Incomplete Account of Reported Satisfaction with the SEC Process
The report’s narrative distorts the sense of “dissatisfaction” with SEC administration of Rule 14a-8 by characterizing the results of the survey as demonstrating that “strong satisfaction” with the SEC is rare, rather than noting that most respondents find the process somewhat to very fair.
The author’s blog post summarizing the survey contends that “[o]ne of the report’s most striking findings is the breadth of dissatisfaction with the SEC’s administration of Rule 14a-8. Unlike views on the legitimacy of particular proposals, dissatisfaction with the process itself is widespread and consistent across respondents.” The report echoes this conclusion.
However, of the 166 respondents to question 38 “how fair is the SEC’s shareholder-proposal process to all parties?”, 20 selected “very fair”, 38 selected “fair”, 42 selected “somewhat fair”, 24 selected “unfair”, 33 selected “insufficient basis to judge” and 9 selected “other”.* In other words, a majority of respondents to this question, around 60%, said that the SEC’s shareholder proposal process was somewhat to very fair to all parties. In a process in which parties on both sides will often not get the outcome that they seek, some level of dissatisfaction with the fairness of the process on all sides should seem about par.
In fact, a more telling point from the survey is that there was broad agreement that the SEC’s no-action process is preferable to litigation. Respondents consistently cite faster resolution, lower cost, reduced adversarial risk, and the value for predictability of an SEC referee with subject-matter expertise.
Read together, these results support the sense that the system operates in a fundamentally fair manner—no one is entirely happy, but most prefer the system to the available alternatives. No doubt there is avoidable subjectivity and unpredictability, suggesting the potential value of modest reforms aimed at improving clarity, consistency, and administrability.
It should be noted that some of the changes implied by the report’s author, such as restricting the ability to file environmental, social, or other non-governance proposals would not resolve dissatisfaction with process administration. Instead, they would disenfranchise the portion of shareholders who view these issues as material to their investment strategies.
The Report’s Narrow Conceptualization of Shareholder Democracy
The report notes that most shareholder proposals never reach a vote, instead being resolved through withdrawal or the SEC’s no-action process and that when proposals do reach the ballot, they rarely receive majority support. This is characterized as inconsistent with “shareholder democracy.” That framing is misguided and risks reinforcing a broader narrative that marginalizes the shareholder proposal process, obscuring its role as a valuable structural mechanism that can help to surface potentially material issues meriting attention at companies and facilitates engagement between investors and the companies they own.
The reality is that the shareholder proposal process has always been an important equalizer among shareholders, democratizing the ability of blocs of smaller investors to engage with their companies in a manner that otherwise is only available to the largest investors. In practice, Rule 14a–8 is one of the only tools available to most shareholders, outside of the largest, to place items on the corporate agenda without incurring the extremely high costs and risks of proxy contests or litigation. Within this structure, the ability to raise issues, prompt engagement, and secure negotiated changes is itself a core democratic feature of the system, distinct from whether any individual resolution crosses a majority-vote threshold.
High withdrawal rates may indicate that proposals raise issues boards and management take seriously, particularly where there is meaningful investor support or where concerns can be addressed at relatively low cost. As Nell Minow has observed, agreements with proponents are more likely when companies anticipate broader shareholder backing. In that light, negotiated resolutions are not evidence of democratic failure but of the system working effectively to surface investor concerns that boards can effectively address, sometimes without needing to go to a vote.
Further, focusing on majority voting outcomes offers a distorted picture of how the shareholder proposal process actually operates in a heterogeneous investor environment. Shareholders differ widely in size, time horizons, and objectives. A process designed to surface issues, prompt engagement, and influence corporate behavior should not be evaluated by whether proposals win 50 percent plus one of the vote. Implying that a resolution only has an impact if it receives a majority vote is also flawed. Many companies see a vote of 25 percent plus as a significant signal from owners leading to changes in policy, practice, and disclosure.
The conclusion that the proposal process does not function as an example of shareholder democracy reflects an interpretive choice that downplays the important role of engagement, transparency, and negotiated change in producing private ordering through the proposal process.
Conclusion
We raise these points because the Weinberg Center survey has the potential to influence how the shareholder proposal process is evaluated and debated going forward. The Center’s director and author of the survey report, Lawrence Cunningham, has indeed expressed the view that the shareholder proposal process is ripe for reform to, among other things, limit the number of non-governance proposals that he regards as managerial distractions.
If the survey report’s findings are cited in policy discussions or reform efforts without making its striking biases and errors clear policymakers will be misdirected toward restricting important shareholder rights that are not based on “facts” but rather on a survey report’s clear biases.
As with any self-reported, self-selected group of respondents, the data collected is inherently limited in its scope, which is compounded by the lack of disaggregation in reporting of many survey responses by shareholder type, issuer size, or proposal activity. However, the larger foundational issues are flaws in the survey instrument compounded by the highly distorted narrative interpretation of the results.
The Weinberg Center, if it continues to conduct such research, would do well to invest in quality control and internal assessment from the perspective of different stakeholders, or alternatively, use a truly independent, credible and neutral third party that considers the diverse perspectives regarding the shareholder proposal process. Question framing, data collection choices, and interpretive errors and assumptions materially shaped the report’s conclusions. Uncritical reliance on these conclusions could lead to misguided policy outcomes—particularly in a regulatory and policy environment where shareholders’ rights to file proposals are already under attack. Accordingly, the SEC and other actors with meaningful influence over the shareholder proposal process should not rely on this report as a basis for policy or regulatory action.
References:
* See Testimony of Witness Ferrel Keel, Congressional Hearing “Hearing Entitled: Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value” (Sept. 10, 2025), https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=410856 at 2:53:57. In discussing costs of shareholder proposals Witness Keel stated “SEC has said it’s maybe upwards of $150,000. There have been other studies that put that at a top of 600,000” and providing additional testimony about “intangible” costs not captured by those figures.
* In the “other” category, eight respondents specified varied ratings over time and leadership and one respondent specified “practically random”.
Investment Organizations Letter to Chairman Paul Atkins re Rule 14a-8 Jan 14, 2026
January 14, 2026
Dear Chairman Atkins and Mr. Moloney,
Thank you for taking the time to meet with us on December 17, 2025 to discuss ourconcerns regarding recent changes to the Division of Corporation Finance no-actionletter process for shareholder proposals and potential changes by the Commission toRule 14a-8.We appreciate the opportunity for an exchange of perspectives. However, we continue to have concerns.
Specifically, changes to the shareholder proposal process conflict with the Commission's tripartite mission of promoting capital formation, investor protection, and maintenance of fair and orderly capital markets. The ability of shareholders to vote by proxy on proposals made by their fellow shareholders has long been an integral part of the U.S. corporate governance system. We believe that this private ordering processhas helped facilitate capital formation.
In the intervening days since we met, we have seen a number of companies avail themselves of the opportunity to notify proponents of their intent to exclude proposals without the benefit of the Division of Corporation Finance staff’s substantive no-action letter review process. We believe the elimination of the no-action letter process for shareholder proposals will deprive investors of the opportunity to vote on numerous valid proposals. It will also work against the interests of many issuers who are now unable to obtain the Rule 14a-8 guidance that the Division staff have historically provided.
Moreover, the new approach seems inconsistent with Rule 14a-8(k). That provision contemplates that the shareholder proponent may respond in writing to a company’s stated intention to exclude a proposal, the Commission staff will then “consider fully” the proponent’s submission, and the staff will then issue a “response”, presumably that either agrees or disagrees with the company or the proponent.
In addition, we have continuing concerns about the approach outlined by Chairman Atkins to the Division Staff in his October 9th, 2025 speech at the John L. Weinberg Center for Corporate Governance. The right of shareholders under Delaware law to vote on precatory proposals is well-established, long-standing and highly beneficial for both shareholders and issuers. Indeed, a recent study (copy enclosed) concludes that shareholder activism “can positively influence firm value” and can “meaningfully shape long-term firm performance.” See “The Value of Being Heard” at page 40. Moreover, theproposed approach conflicts with the Commission’s longstanding position that “mostproposals that are cast as recommendations or requests that the board of directors takespecified action are proper under state law” as memorialized in Rule 14a-8’s note to paragraph (i)(1).
We urge the Division to engage in a robust effort to collect information from all concerned market participants regarding the shareholder proposal process to guide its consideration in this area. For example, in 2018 the SEC staff held a series of roundtables on the proxy process with investor, issuer and asset manager perspectives. As part of these roundtables, the staff invited interested members of the public to provide written comments that were considered as part of the Commission’s 2019proposed revisions to Rule 14a-8. We believe that a similar information gathering process would be beneficial if further changes to the shareholder proposal process are contemplated.
In the spirit of promoting dialogue and to better inform the Commission about the manybenefits that have resulted from the private ordering process of the shareholder proposal rule, we would like to share the following resources for your consideration:
Profs. Jill Fisch, Sarah Haan, Ann Lipton, and Amelia Miazad, Stockholder Proposals—Law and Policy Considerations, Harvard Law School Forum on Corporate Governance (December 9, 2025)
Letter to Chairman Atkins from various state fiscal officers (December 3, 2025)
Letter to Chairman Atkins from various investor organizations (November 5, 2025)
Letter to Chairman Atkins from the Council of Institutional Investors (December 30, 2025)
Letter to Chairman Atkins from the International Corporate Governance Network (October 12, 2025)
Shareholder Rights Group, Interfaith Center on Corporate Responsibility, and USSIF, Shareholder Proposals: An Essential Right (2025)
Letter to Chairman Atkins from the National Legal and Policy Center (December 18, 2025)
Christina Sautter, Texas Corporate Reforms Silence Retail Shareholders—By Design, Bloomberg (January 6, 2026)
Jasmijn Vandenberk, The Value of Being Heard: Board Responsiveness to Shareholder Proposals (September 11, 2025)
For additional resources on the shareholder proposal process, please see the InvestorRightsForum.com website.
Thank you for taking our concerns into consideration. As representatives of investors who have submitted or voted upon many successful shareholder proposals at the companies in which we invest, we welcome the opportunity to provide you with further information and perspectives as you evaluate the benefits of the shareholder proposal process.
Respectfully submitted,
Brandon Rees, Deputy Director of Corporations and Capital Markets, AFL-CIO
Steven M.Rothstein, Chief Program Officer, Ceres
Josh Zinner, CEO, Interfaith Center on Corporate Responsibility
Sanford Lewis, Director and General Counsel, Shareholder Rights Group
Maria Lettini, CEO, US SIF
Danielle Fugere, President and Chief Counsel, As You Sow
The Value of Being Heard: Board Responsiveness to Shareholder Proposals
While prior research has primarily focused on the short-term market reactions to shareholder proposals and examined their outcomes in isolation, this study adopts a broader perspective by investigating how different levels of proposal responsiveness relate to firm value. We posit that the value effects of shareholder proposals are more pronounced when firms are open to dialogue with shareholders, whether publicly or privately. Using a sample of 9,764 shareholder proposals submitted to S&P 1500 firms between 2005 and 2021, we find that both voted and withdrawn proposals are similarly associated with higher firm value (measured by Tobin's Q) compared to omitted proposals. In the longer term, our results provide modest evidence that the positive effect persists primarily for withdrawn proposals, suggesting that the highest degree of responsiveness yields the greatest value creation. Furthermore, responsiveness appears to be more value-enhancing when proposals are submitted by multiple shareholders or in firms with CEO duality, indicating that both collective shareholder action and CEO power dynamics play a role. These findings imply that regulators, companies and shareholders should recognize that the shareholder proposal process can enhance firm value under certain conditions.
Read full paper
Letter to SEC Chairman Atkins from Council of Institutional Investors
Dear Chairman Atkins:
I am writing on behalf of the Council of Institutional Investors (CII). CII is a nonprofit, nonpartisan association of United States (U.S.) public, corporate and union employee benefit funds, other employee benefit plans, state, and local entities charged with investing public assets, and foundations and endowments with combined assets under management of approximately $5 trillion. Our member funds include major long-term shareowners with a duty to protect the retirement savings of millions of workers and their families, including public pension funds with more than 15 million participants – true and real “Main Street” investors through their pension funds. Our associate members include non-U.S. asset owners with more than $5 trillion in assets, and a range of asset managers with more than $74 trillion in assets under management.¹
We read with interest the Securities and Exchange Commission’s (SEC) “Statement Regarding the Division of Corporation Finance's Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season” (Statement). ² We recognize and appreciate the SEC’s “current resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt staff attention . . . .”³ We, however, are concerned that the Statement could diminish the use of an important shareholder right that for decades has led to improvements in corporate governance that benefit long-term shareholder value.⁴
The Preamble to CII’s membership-approved policies states:
CII believes effective corporate governance and disclosure serve the best long-term interests of companies, shareowners and other stakeholders. Effective corporate governance helps companies achieve strategic goals and manage risks by ensuring that shareowners can hold directors to account as their representatives, and in turn, directors can hold management to account, with each of these constituents contributing to balancing the interests of the company’s varied stakeholders. We consider effective disclosure to be accurate, prompt and useful information on company policies, practices and results. CII advocates for investor protection and robust capital markets, accomplished through a combination of private ordering and market-wide rules and regulations.
CII supports shareowners’ discretion to employ a variety of stewardship tools to improve corporate governance and disclosure at the companies they own. These tools include casting well-informed proxy votes; engaging in dialogue with portfolio companies (including with board members, as appropriate), external managers and policymakers; filing shareholder resolutions; nominating board candidates; litigating meritorious claims; and retaining or dismissing third parties charged with assisting in carrying out these activities.⁵
Consistent with that policy, CII believes that shareholder proposals, which are almost always nonbinding, are an essential and cost-effective tool for expressing the collective voice of a company’s shareowners on particular matters, and have made important contributions to corporate governance over the last 50 years. ⁶ Moreover, because “sound corporate governance is critical to long-term returns — and because poor governance can have a negative result on returns — CII members have a strong interest in seeing that shareholders can submit and vote on shareholder proposals that raise important corporate governance issues.” ⁷
In addition, CII has long publicly supported the view held by most market participants⁸ that the SEC’s Division of Corporation Finance (SEC Staff) is a fair arbiter for implementing the shareholder rule⁹ governing shareholder resolutions.¹⁰ And that “CII members take comfort in the fact that the SEC [S]taff is playing a role in terms of overseeing these proposals.”¹¹ What’s more, we believe corporations also benefit from the SEC Staff reviewing a corporation’s decision to include a shareholder proposal based on enumerated exclusions under Rule 14a-8 and providing an opinion on such exclusion through the no-action process.¹²
As you are aware, the Statement, without the benefit of public comment, ¹³ results in a fundamental change in how the SEC Staff approaches shareholder proposals under Rule 14a-8. ¹⁴As but one example, the Statement indicates that the SEC Staff will accept a company’s representation that it has a “reasonable basis” to exclude a proposal and won’t object to that conclusion. ¹⁵
We note that the Statement could potentially limit the ability of shareowners to file shareholder proposals that would otherwise meet the existing requirements of Rule 14a-8 and improve corporate governance and long-term shareholder value at the companies they own. We believe that good corporate governance practices could lead to special scrutiny of those corporate boards that may elect to respond to the Statement by omitting shareholder proposals from their proxy materials relying on the new process described in the Statement. We also believe that this special scrutiny could lead some institutional investors to holding some companies’ directors or boards accountable through (1) vote no-campaigns, ¹⁶or (2) litigation. ¹⁷ Thus, rather than alleviating pressure on corporate boards, the Statement could result in greater board-level instability through unnecessarily increasing issuers reputational¹⁸ or legal risks. ¹⁹
We also note that the Statement indicated that the new process “applies to the current proxy season (October 1, 2025 – September 30, 2026) as well as no-action requests received before October 1, 2025 to which the Division has not yet responded.”²⁰ We believe, for all the above reasons, the new process should be reconsidered and reversed as soon as practicable, but no later than the end of this proxy season.²¹
Thank you for your consideration of our views on this important matter. We would welcome the opportunity to meet with you and/or your staff to discuss our concerns in more detail and to answer any questions regarding this letter.
Sincerely, Jeffrey P. Mahoney General Counsel
References:
Council of Institutional Investors, Current CII Members, https://www.cii.org/current%20cii%20members.
1 Division of Corporation Finance, Securities and Exchange Commission, Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season (Nov. 17, 2025), https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-roleexchange-act-rule-14a-8-process-current-proxy-season.
2 Id.
3 Letter from Jen Sisson, Chief Executive Officer, International Corporate Governance Network, to Paul S. Atkins, Chairman, Securities and Exchange Commission, et al. (Dec. 10, 2025), https://www.icgn.org/sites/default/files/2025-12/30.%20ICGN%20letter%20to%20SEC%20on%20shareholder%20proposals.pdf.
4 Council of Institutional Investors, Policies on Corporate Governance – Preamble (last updated Mar. 11, 2025), https://www.cii.org/corp_gov_policies#intro.
5 Letter from Kenneth A. Bertsch, Executive Director, Council of Institutional Investors, et al. to Vanessa A. Countryman, Secretary, Securities and Exchange Commission (Jan. 30, 2020), https://www.cii.org/Files/issues_and_advocacy/correspondence/2020/20201030%2014a8%20comment%20letter%20FINAL.pdf.
6 Daniel M. Stone, SEC Suspicion of Shareholder Proposals Hurts Corporate Democracy, Bloomberg Government (Dec. 22, 2025).
7 Brief of the Council of Institutional Investors as Amicus Curiae in Support of Plaintiffs’ Motion for Summary Judgment, ICCR v. SEC, No. 1:21-cv-1620-RBW (D.D.C. Sept. 24, 2021), https://www.cii.org/files/issues_and_advocacy/legal_issues/17_Brief_final.pdf.
8 Amendments to Rule 14a-8 Under the Securities Exchange Act of 1934 Relating to Proposals by Security Holders, Exchange Act Release No. 20091, 48 Fed. Reg. 38218 (Aug. 23, 1983).
9 Shareholder Proposals, 17 C.F.R. § 240.14a-8 (Feb. 18, 2025), https://www.ecfr.gov/current/title-17/chapter-II/part-240/subpart-A/section-240.14a-8.
10 Council of Institutional Investors, Leading Investor Group Defends SEC as Fair Arbiter of Shareholder Proposals as ExxonMobil Goes to Court (Feb. 8, 2024), https://www.cii.org/feb82024-press-release-exxon.
11 Roundtable Discussions Regarding the Federal Proxy Rules and State Corporation Law, Statement of Ann Yerger, Council of Institutional Investors, before the Securities and Exchange Commission (May 7, 2007), https://www.sec.gov/spotlight/proxyprocess/proxy-transcript050707.pdf.
12 Andrew Ramonas & Drew Hutchinson, SEC Prepares Plan to Curb Company Reporting, Investor Proposals, Bloomberg Government (Dec. 29, 2025).
13 Gina Gambetta, Uncharted Territory: How Are Investors Preparing for the 2026 AGM Season?, Responsible Investor (Dec. 17, 2025), https://www.responsible-investor.com/uncharted-territory-how-are-investors-preparing-for-the-2026-agm-season/.
14 ICCR, Statement on Recent Policy Change at the SEC (Nov. 20, 2025), https://www.iccr.org/iccr-statement-on-recent-policy-change-at-the-sec/.
15 SEC to Companies: You’re on Your Own (Sort Of) Under Rule 14a-8, Winston & Strawn Blog (Nov. 24, 2025), https://www.winston.com/en/blogs-and-podcasts/capital-markets-and-securities-law-watch/sec-to-companies-youre-on-your-own-sort-of-under-rule-14a-8.
16 Public Companies in Uncharted Territory Following SEC Announcement It Will Step Back from Responses on Most Shareholder Proposal No-Action Requests, White & Case Alert (Nov. 24, 2025), https://www.whitecase.com/insight-alert/public-companies-uncharted-territory-following-sec-announcement-it-will-step-back.
17 Proposal Free-for-All Sets In as Early Filers Contend with SEC Withdrawal, Agenda, Gallagher (Dec. 15, 2025).
18 Kevin M. LaCroix, Guest Post: Is the SEC Signaling the End of ESG Shareholder Proposals?, D&O Diary (Dec. 16, 2025), https://www.dandodiary.com/2025/12/articles/securities-regulation/guest-post-is-the-sec-signaling-the-end-of-esg-shareholder-proposals/.
19 Leland S. Benton et al., SEC Division of Corporation Finance Announces Major Changes to Rule 14a-8 Shareholder Proposal Process, Morgan Lewis LawFlash (Nov. 19, 2025), https://www.morganlewis.com/pubs/2025/11/sec-division-of-corporation-finance-announces-major-changes-to-rule-14a-8-shareholder-proposal-process.
20 Letter from Elizabeth A. Steiner, Oregon State Treasurer, et al. to Paul S. Atkins, Chairman, Securities and Exchange Commission (Dec. 3, 2025).
21 Letter from Jen Sisson, Chief Executive Officer, International Corporate Governance Network, to Paul S. Atkins, Chairman, Securities and Exchange Commission, et al. (requesting reconsideration of the Statement).
Access the full text here.
Conservative National Legal and Policy Center Writes to SEC Chairman Opposing Recent Changes
This post excerpts a letter written by The National Legal and Policy Center to Chairman Paul Atkins, Securities and Exchange Commission. Access the full text here.
Dear Chairman Atkins:
The National Legal and Policy Center (“NLPC”) writes to express our interest in working with you, the Commission, and staff on any future rulemaking, guidance, or other actions relating to the shareholder proposal process and broader proxy system. As a shareholder advocate that has long used Rule 14a-8 to challenge politicized corporate behavior, we offer a perspective that is both pro-market and skeptical of the “stakeholder” model of corporate governance.
Introduction
The SEC’s mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” To these ends, it has long played a central role in structuring the proxy process and protecting the rights of shareholders as owners. We respectfully submit that preserving a robust, predictable shareholder proposal regime is fully consistent with that mission, and that some of the recent ideas and developments surrounding the proposal process risk undermining it.
We understand that further action regarding shareholder proposals is under consideration by you and the Commission. We welcome discussion of how to reduce abuse and clarify fiduciary duties. However, we are concerned that reducing the SEC staff’s role in the no-action process, encouraging aggressive ownership thresholds, or casting doubt on the legitimacy of non-binding proposals could unintentionally weaken market-based accountability and drive political conflict into more heavy-handed regulatory channels
Shareholder Proposals Are a Capitalist Tool
From a conservative perspective, Rule 14a-8 is best understood not as a vehicle for stakeholder capitalism, but as a property-rights mechanism. It gives owners of a corporation a low-cost way to raise emerging risks and concerns with management, and test those concerns in the marketplace of investor opinion through a shareholder vote. Properly constrained, this is an explicitly capitalist institution. It is voluntary, firm-specific, and mediated by the discipline of capital markets. It is also qualitatively different from political regulation. When a shareholder proposal is adopted or prompts a negotiated change, that outcome arises from private ordering within a particular company, not from a government mandate imposed on the entire economy.
For that reason, shareholder proposals are a constructive alternative to more intrusive political interventions. If owners are denied meaningful tools to discipline management on social, political, or ESG matters that affect the firm, the likely result is more legislative and regulatory activism, not less. We believe conservatives should prefer disputes to be resolved within the framework of corporate law and capital markets rather than by sweeping federal mandates.
****
Conclusion
For these reasons, we respectfully urge the Commission not to weaken the shareholder proposal process or to invite state-law experiments that would, in practical effect, curtail the ability of ordinary investors to raise concerns with management. A clear and stable federal baseline under Rule 14a-8—one that recognizes the legitimacy of precatory proposals, maintains an accessible threshold for smaller but bona fide shareholders, and resists efforts to reclassify ordinary owner oversight as “improper” under state law—is fully consistent with the Commission’s mission to protect investors and promote fair, orderly, and efficient markets. It is also the approach most compatible with a conservative, market-oriented vision of corporate governance, in which disputes over politicized corporate behavior are worked out within firms and among owners, rather than through sweeping political or regulatory mandates.
We would welcome the opportunity to discuss these issues further with you, your fellow commissioners, and your staff, and to provide concrete examples of how the shareholder proposal process has enabled NLPC and similarly situated investors to check managerial excesses, challenge uneconomic ESG initiatives, and refocus companies on their core duty to shareholders. We are confident that, with careful and viewpoint-neutral refinements, the Commission can address concerns about abuse and complexity without sacrificing a vital mechanism of owner oversight.
Sincerely,
Peter Flaherty, Chairman.
The Controversy Over Shareholder Proposal Thresholds
Sanford Lewis, Director
Khadija Foda, Associate Counsel
Shareholder Rights Group
Access to the shareholder proposal process is once again up for debate as recent developments demonstrate renewed efforts to raise the ownership thresholds for filing shareholder proposals. Ultimately, the purpose of the ownership thresholds in Rule 14a-8 is to ensure that proponents who have an ability to file proposals relevant to the companies they are invested in. Since the origin of the rule in 1942, the Securities and Exchange Commission (SEC) has consciously chosen to keep filing thresholds low and the rules written in plain English to empower smaller retail investors to file proposals and engage with their companies.
Now, a growing push to tighten eligibility criteria threatens to turn that principle on its head — restricting participation not to those with a stake, but only to those with exceptional wealth. In May 2025, Texas passed a law 1 effective as of September 1, 2025, which allows certain Texas corporations to impose extreme thresholds on shareholder proposals. Instead of a minimum of $2,000 held for three years, $15,000 held for two years, or $25,000 held for a year, as established by the SEC under Rule 14a-8, the Texas law allows corporations to revise their governance documents to impose a $1 million shareholding threshold for any investor to file a proposal.
SEC Chairman Paul Atkins noted in an October 9, 2025 speech that he would view the extreme Texas thresholds as a basis for exclusion of proposals under Rule 14a-8(i)(1), which allows for the exclusion of proposals “improper under state law”. He further stated his opinion that the Rule 14a-8 standards are merely “default” standards that apply in the absence of state laws and/or corporate arrangements to the contrary, leaving the door open for private ordering around thresholds, among other things. 2
Putting aside questions of whether such changes are legally permissible or preempted by Rule 14a-8, these developments put renewed focus on ownership thresholds. The Texas law would allow companies to raise filing thresholds to a level that would, in practical terms, eliminate access to the proxy for all but the very largest shareholders, investors who already have direct channels to management and do not rely on the proposal process. This type of private ordering risks a “race to the bottom,” in which states competing for incorporations adopt increasingly management-centric rules that work to shield boards from shareholder oversight.
This debate arises at a pivotal moment. Texas and Nevada are openly competing with Delaware to attract corporate charters and have had some success. Major companies such as Tesla, Coinbase, and Dropbox have already left Delaware. 3 It has also been rumored that firms like Meta are considering a similar move.4
There is also a real possibility that the SEC itself may revisit ownership thresholds through federal rulemaking as “Shareholder Proposal Modernization” is once again on the SEC’s rulemaking agenda.5
2020 Rulemaking
The last time the SEC considered the ownership thresholds was in 2020, when it undertook an extensive data-driven review of where to set the bar for shareholder participation in the proxy process. That rulemaking process examined inflation, market capitalization growth, cost impacts, diversification needs, and solicited extensive comments from stakeholders in the process.
The resulting amendments to Rule 14a-8 significantly raised the bar for eligibility. Previously, a shareholder could submit a proposal with $2,000 in shares held for at least one year. The 2020 amendments replaced that single standard with a tiered system: $2,000 held for at least three years; $15,000 held for at least two years; $25,000 held for at least one year.
Notably and unfortunately, the amendments also prohibited aggregation of holdings, preventing smaller shareholders from pooling their shares to qualify.
The Commission justified the threshold changes in 2020 by noting that the eligibility criteria had not been substantively updated since 1998 and that inflation and rising market valuations warranted a recalibration. At the same time, the SEC asserted that these amendments would preserve access for smaller “Main Street” investors, emphasizing that it had given careful consideration to the impacts on smaller investors and concluded that longer holding periods demonstrate meaningful commitment to a company.
Even so, the 2020 amendments were highly controversial. The cost-benefit analysis largely ignored the lost value of shareholder proposals that would be blocked by the new rules, but at least the 2020 rulemaking reflected a deliberate attempt to provide notice, consult stakeholders, and to calibrate based on evidence and market conditions.
However, whatever one’s view of the SEC’s ultimate decision, the Commission did undertake an extensive review of the record, including more than 1,000 comments from investors, issuers, and other stakeholders. 6 Suggestions that states should now consider allowing steeper thresholds overlook the significant analysis the SEC has already completed. Any debate on this topic should be anchored in the SEC’s existing evidentiary record, while acknowledging its gaps, rather than based in political momentum or assumptions that could undermine investors’ ability to collectively manage risk.
Which Retail Investors Can File Currently?
Recent data indicates that access to the shareholder-proposal process is already far narrower than many assume. 7 According to the Federal Reserve’s 2022 Survey of Consumer Finances, only about 21% of U.S. families directly own individual stocks, and the median portfolio for those households is roughly $15,000 spread across multiple companies. Realistically, only a small subset holds even $2,000 in a single issuer, which is the minimum required under Rule 14a-8’s lowest eligibility tier. When portfolio concentration and turnover are taken into account, fewer than 1% of U.S. households are estimated to qualify under the $2,000-for-three-years standard, and the higher $15,000 and $25,000 standards are effectively limited to the wealthiest 1–3% of households. The financial and holding-period requirements thus make eligibility a privilege of a very thin, already affluent segment of the investing public — far from a wide-open channel easily exploited by casual filers.
At the same time, retail interest in exercising shareholder voice is growing. Proxy-voting tools offered through platforms like Robinhood now enable small investors to vote and raise questions with unprecedented ease, and several major index managers are rolling out “pass-through” voting programs that allow underlying fund investors to direct how their shares are cast. Yet these innovations only matter if there are meaningful choices on the ballot. Raising ownership thresholds further would concentrate filing rights even more tightly among ultra-wealthy individuals and a handful of institutions.
In short, the existing thresholds already constrain participation to a narrow and exceptionally well-resourced group. Any tightening from here would not modernize the process; it would effectively eliminate proposal filing rights for ordinary investors.
Why Small Shareholders Matter: The Policy Stakes
The shareholder proposal process serves as a core accountability mechanism in U.S. corporate governance. It allows investors to elevate potentially material issues to the full shareholder base, which can prompt boards and management to evaluate and address risks before they escalate. This is not an administrative burden to be reduced, but a vital check on managerial blind spots and a driver of long-term value creation. Without access to the proposal process, smaller shareholders have no practical mechanism to compel board attention—management can simply choose to disregard and ignore their concerns.
Efforts to raise ownership thresholds overlook this essential function. Today, the largest shareholders are asset managers, such as BlackRock, State Street, and Vanguard, who manage trillions of dollars almost entirely through low-fee passive funds. These asset managers compete on cost and typically lack strong economic incentives to pursue intensive engagement at individual portfolio companies. Academic research shows that their stewardship is frequently “low-cost, largely symbolic,” relying heavily on generalized proxy guidelines and automated voting practices rather than company-specific analysis.8
Smaller, active shareholders fill that gap. For instance, for decades, shareholders like John Chevedden and James McRitchie have submitted proposals that consistently garner high levels of support, including frequent majority approval. Mr. Chevedden’s long-running efforts to promote majority voting standards for directors have succeeded across the market, contributing to widespread adoption of majority voting among S&P 500 companies. Likewise, Mr. McRitchie’s proposals advancing proxy access have regularly received significant backing, with many companies negotiating reforms in response to proposals that earned 40%–50% support or more. These individual proponents, working with minimal resources, have driven significant improvements in corporate accountability and transparency. Yet, if ownership thresholds were increased, shareholders like Chevedden and McRitchie would likely be barred from submitting proposals altogether despite their remarkable track records.
These contributions are not limited to governance reforms. Small shareholders have also played a central role in surfacing environmental and social risks that affect financial performance. Issues such as climate transition, human capital management, supply chain resilience, and community impacts are not simply matters of political preference. They can shape brand value, regulatory exposure, and long-term enterprise risk. Investors raise these risks as part of sensible risk management and oversight in fulfillment of fiduciary duties. Companies themselves acknowledge this reality by producing sustainability reports and setting emissions targets, among other things. Investors filing proposals are responding to those same market signals.
Advisory proposals on environmental and social issues also continue to have significant backing. Morningstar reports pro-ESG proposals averaged 20% support this year, a level which represents a significant portion of a company’s investor base. 20–30% support for a shareholder proposal represents an extraordinary level of investor concern, especially because the baseline is overwhelming support for management. The largest asset managers typically vote with management, and proxy advisory firms recommend in favor of management the vast majority of the time. When dissent rises to this level despite those structural headwinds, it signals serious, material concerns among a diverse range of investors.
Further, voting outcomes confirm that shareholders can distinguish between proposals that add value and those that do not. For example, proposals seeking to eliminate corporate sustainability or diversity programs routinely received 2 percent support or less this year. In contrast, proposals that sought practical transparency received strong engagement. Requests for disclosure of EEO workforce diversity data averaged 33% support. The EEO data is already supplied to the government, so making the reports public improves information to the market at little cost. More resource intensive requests, asking for racial equity audits, received meaningful support around 18% on average.
All of this reflects a straightforward reality: investors vote in support of environmental and social proposals that improve disclosure and accountability on issues that affect corporate performance. Indeed, many proposals never reach a vote at all because proponents frequently agree to withdraw proposals after negotiating commitments on disclosure or oversight. That outcome reflects the board’s fiduciary judgment that the requested measures are relevant to the company and worth addressing.
Nor are proposals on social and environmental issues only of concern to a niche group of investors. Roughly one third of U.S. assets under management, representing tens of trillions of dollars, integrate ESG or sustainability in investment strategies and these investments are expected to grow, not shrink. This is not a narrow constituency and a substantial share of the market is likely to consider some environmental and social shareholder proposals to address material enterprise or systemic risks, even if relevance varies by investor.
Arguing that these proposals are merely political, which detractors often do in support of arguments to raise thresholds, is akin to saying that in buying a house, considering whether it sits in a flood zone or in a neighborhood where crime has been rising. Those are real risks that affect the value of the house, just as environmental and social risks affect the value of a company. Doing so also ignores their track record of identifying material concerns that boards initially failed to address.
For example, shareholder proposals urging banks and real estate companies to evaluate fair-lending practices and exposure to predatory financing helped surface systemic risk in the housing market well ahead of the 2008 crash. Shareholders used the proposal process to raise concerns that proved profoundly material to companies, investors, and the broader economy.
The proposals of small shareholders have strengthened director accountability, improved transparency, and pushed companies to address critical workforce, operational, and sustainability risks. These contributions illustrate that meaningful oversight is not correlated with the size of a shareholder’s position, but with whether the investor is willing and able to act.
Maintaining reasonable and accessible filing requirements is therefore essential to preserving the integrity of the proxy process. Rule 14a-8 is a valuable engagement tool and communication channel because it enables participation from a wide range of shareholders with diverse perspectives and incentives.
Troubling Signals from Delaware
The Texas law authorizing extreme ownership thresholds, Chairman Atkins’ invitation for issuers to challenge the federal framework under Rule 14a-8(i)(1) as improper under Delaware law, and the SEC’s suspension of substantive no-action review for the 2026 season collectively signal a growing risk that access to the proxy will be narrowed through state law, private ordering, or future rulemaking.
As rulemakers and policymakers revisit these questions, the focus should remain on sustaining a shareholder-proposal system that supports early risk detection, protects investor confidence, and strengthens long-term corporate performance. These objectives are incompatible with threshold increases that silence the voice of smaller shareholders, destabilizing a governance framework that has served capital markets for more than eight decades.
Footnotes
- Texas SB1057 (2025)
- Chairman Atkins’ statements were part of his larger speech under which he endorsed an outlier theory that advisory proposals are improper under Delaware law. He further laid out a roadmap for issuers to advance this argument before the Division of Corporation Finance and expressed “high confidence” that the staff would honor this position. For a more detailed discussion of these issues, please see our post here. The recent suspension of the SEC’s no-action process for the 2026 proxy season, except for exclusions under Rule 14a-8(i)(1), signals a significant shift in the Commission’s role and an openness to Chairman Atkins’ theory that private ordering at the state and bylaw level could govern access to the shareholder-proposal process.
- https://www.businessinsider.com/list-corporations-leaving-delaware-elon-musk-spacex-tesla-dropbox-roblox-2025-7#coinbase-8
- Business Insider – Corporations leaving Delaware
- Reuters – Meta considers leaving Delaware
- SEC – Shareholder Proposal Modernization rulemaking agenda
- Analysis by James McRitchie submitted to SEC Investor Advisory Committee on December 4, 2025.
- Lucian Bebchuk & Scott Hirst, Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy, 119 Colum. L. Rev. 2029, 2031–35 (2019); See Morningstar, Passive Fund Managers and Proxy Voting: 2022 Update (August 2022), showing high levels of reliance on proxy advisors and limited individualized engagement.