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”.