Background on the shareholder proposal process under rule 14a-8

Rule 14a-8 allows eligible shareholders to include proposals in a company’s proxy statement for a shareholder vote. The SEC’s no-action process, operating since 1945, historically resolved exclusion disputes by providing both parties with a neutral, low-cost forum for developing precedent under the rule.

2025–2026 Proxy season developments

On 17 November 2025, the SEC’s Division of Corporation Finance announced it would not respond to most Rule 14a-8 no-action requests, citing resource constraints and the sufficiency of existing guidance. Companies could instead request a “no-objection” letter based solely on an unqualified self-representation, effectively removing neutral oversight and tilting the process towards issuers.

On 23 January 2026, the Division also restricted EDGAR access for shareholders owning less than $5 million in a company’s stock (p.7), limiting smaller investors’ ability to communicate ahead of annual meetings.

Methodology and scope

The analysis examines exclusion notices, withdrawal letters, proponent input, and proxy statements through 15 April 2026. It compares proposal and exclusion volumes across the 2024–2025 and 2025–2026 seasons, with a focus on ordinary business exclusions under Rule 14a-8(i)(7).

Diverging company responses this proxy season

Shareholders filed approximately 20% fewer proposals for the 2026 season (p.10). Total exclusions fell about 21%, with 155 exclusions as of 15 April 2026 compared to 197 at the same date the prior year (p.10). Companies also filed over 100 fewer exclusion notices (p.10). Some companies included proposals citing regulatory uncertainty; others excluded them unilaterally. At least six disputes moved into litigation.

Shareholder proposal exclusions this season: Key takeaways

35% of exclusions relied on technical grounds, with 52% of those alleging proof-of-ownership deficiencies (p.12). Ordinary business exclusions accounted for 28% of total exclusions (p.12); of those, approximately 64% involved proposals where prior SEC staff precedent did not clearly resolve excludability (p.13), predominantly covering revised and novel proposals. Around 22% of ordinary business exclusions appeared inconsistent with established staff precedent (p.16).

Substantial implementation claims rose to 23% of excluded proposals, up from 7.8% and 11.6% in the prior two proxy seasons (p.17), raising questions about how the standard is being applied without routine staff engagement.

Examples of company-shareholder dialogue, productive engagement, and transparency

Several companies demonstrated constructive engagement, including McDonald’s, Columbia Sportswear, Home Depot, and Ulta Beauty (p.18). Companies including F5, Floor & Decor Holdings, Marsh & McLennan, CoStar Group, WESCO International, and Teradyne resolved political contributions proposals through negotiated governance or disclosure changes. At least seven settlements on political contributions proposals were reached (p.19).

Evolving proponent strategies

Six lawsuits were filed challenging proposal exclusions (p.21); three resolved quickly after companies agreed to include proposals or provide requested disclosures. On 19 March 2026, ICCR and As You Sow filed an Administrative Procedure Act lawsuit against the SEC challenging the November 17 policy changes (p.26). Non-judicial strategies also emerged, such as Trillium’s threat of an independent proxy solicitation, which secured BJ’s Wholesale Club’s agreement to include a greenhouse gas proposal (p.26–27).

Governance expectations

Proxy advisory firms signalled heightened expectations. ISS stated that failure to clearly explain exclusion rationale could lead to negative voting recommendations against directors (p.27–28). Glass Lewis indicated it would flag omissions in its benchmark proxy research (p.28).

Recommendations

The report sets out five recommendations: preserve Rule 14a-8; restore the no-action process; eliminate “no-objection” letters; issue clearer, more objective guidance on ordinary business and micromanagement determinations; and protect access for smaller shareholders who lack the resources to litigate (p.28–30).