For decades, Rule 14a-8 has been the primary channel for shareholders to submit proposals to companies, preferred by proponents over the more burdensome advance notice bylaw provisions that, although widely adopted by companies, do not mandate inclusion of the proposal in a company’s proxy statement.
The proposed rescission follows the SEC ending the no-action letter process under Rule 14a-8 in August 2026,1 and comments from Chairman Paul Atkins questioning the statutory basis of Rule 14a-8, including in October 2025, when he called for a “fundamental reassessment” of Rule 14a-8.2 If adopted, this would be one of the most meaningful changes to the shareholder engagement landscape since the adoption of the shareholder proposal rule in 1942.
In the same release, the SEC proposed amendments to Rule 14a-4 that would allow companies to obtain discretionary voting authority on shareholder proposals submitted outside of the Rule 14a-8 process pursuant to advance notice bylaw provisions, even if the proponent successfully solicits the percentage of shareholders required to approve the proposal.
The aim of the amendments to Rule 14a-4 is to afford companies more flexibility in dealing with independent solicitations without being forced to include the shareholder proposal in their proxy materials. The SEC notes that these amendments are aligned with its proposed rescission of Rule 14a-8 since independent solicitations may increase if Rule 14a-8 is rescinded and shareholders look for alternative channels to be heard, making this flexibility particularly important to companies.
In a companion release, the SEC also proposed amendments to certain proxy solicitation rules to modernize timing and delivery requirements in light of technological advancements, discussed in more detail below.
Comments are due 60 days after publication of the proposed amendments in the Federal Register, so we expect the deadline will be around November 20, 2026.
Proposed rescission of Rule 14a-8
The SEC makes clear in the release that its “principal basis” for proposing the rescission of Rule 14a-8 is that it exceeds the SEC’s authority under Section 14(a) of the Exchange Act. In his remarks on the release, Chairman Atkins stated that the proposal to rescind Rule 14a-8 reflects one of his “highest regulatory priorities,” namely, that the SEC must not “improperly intrude into state corporate law when applying the federal securities laws.”3 In the release, the SEC argues that rules regarding proper subjects of shareholder action are squarely matters of state law from which the SEC must disentangle itself.
The SEC further argues that there are independent policy reasons to rescind Rule 14a-8, as the assumptions that underpinned the initial adoption of the rule have changed: Rule 14a-8 was adopted against a background of low costs to companies of including shareholder proposals in their proxy statements, shareholder proposals generally receiving management support, and a low volume of proposals.
Now, companies face much higher costs in addressing shareholder proposals in the form of management time, no-action letters, opposition statements and engagement with shareholders, with such proposals rarely receiving majority support and their volume having increased significantly. The SEC also states that technological advancements such as the SEC’s notice and access rules have made independent solicitations a more feasible alternative for shareholders seeking to submit proposals, thereby reducing the utility of Rule 14a-8.
The SEC further states that proponents’ use of Rule 14a-8 no longer aligns with its original purpose. The release states that perennially high shareholder proposal withdrawal rates suggest that proponents often see Rule 14a-8 as a way to engage with companies with a goal of reaching a compromise or accommodation that allows for the ultimate withdrawal of the proposal. The SEC points to online platforms and social media as alternative fora for this type of engagement.
Proposed amendments to Rule 14a-4
Rule 14a-4 governs the form of the proxy card sent by companies to shareholders and is designed to ensure complete and accurate disclosure of the matters to be voted on and voting options on the proxy card. Rule 14a-4(c) specifies the matters on which a proxy may confer discretionary voting authority (authority granted to the proxy holder) to vote as it sees fit rather than in accordance with a specific instruction from the shareholder.
Rule 14a-4(c) is principally relevant for shareholder proposals submitted pursuant to a company’s advance notice bylaws, outside of Rule 14a-8, which can be presented and voted on at the annual meeting but do not have to be included in the company’s proxy materials pursuant to federal or state law.
Under the current Rule 14a-4(c), a company may obtain discretionary voting authority over such a shareholder proposal if the proposal is submitted fewer than 45 days before the date on which the company mailed its proxy materials for the prior year’s annual meeting or does not meet the company’s advance notice bylaw deadline if that deadline is stricter, as long as the company discloses the untimely submission in its proxy statement or proxy card. A company may also obtain discretionary authority with respect to a timely submitted proposal, if it includes in its proxy statement a description of the matter and a statement of how it intends to exercise its vote with respect to the matter.
Under current Rule 14a-4(c), if a proponent: (a) timely informs the company of its intention to solicit the percentage of holders of voting securities required to approve a proposal submitted pursuant to its advance notice bylaws, (b) includes a statement to this effect in its proxy materials filed under Rule 14a-6 and (c) sends such materials to shareholders (and provides evidence to the company of such solicitation), the company cannot use the discretionary voting authority conferred by proxies that the company solicited in connection with the proposal and the annual meeting.
The SEC states that, in such a situation, a company often feels compelled to include the shareholder proposal in its own proxy statement and on its card, since doing so is the only way for the company to solicit proxies on the proposal from shareholders.
The SEC also identifies a related emerging trend arising from the universal proxy rules. A shareholder conducting its own proxy solicitation in support of a proposal may include the company’s director nominees on the proponent’s proxy card, even though the proponent is not nominating any competing directors. This is permitted by the amendments to Rule 14a-4(d) adopted in connection with the universal proxy rules, which relaxed the consent requirement as applied to a company’s own nominees, permitting a soliciting shareholder to list management’s nominees on the proponent’s card without obtaining each nominee’s consent.
The practical effect is that a proponent can now assemble a fully functional proxy card covering the entire slate of management nominees together with its own proposal, at minimal cost and without the company’s cooperation. In these “zero slate” campaigns, shareholders may be more likely to use the proponent’s proxy card because it is the only card that allows them to vote on both the company’s nominees and the shareholder proposal. The company’s card, by contrast, presents an incomplete ballot to any shareholder who wishes to express a view on the proposal.
If a company cannot exercise discretionary authority under Rule 14a-4(c) over a proposal omitted from its own proxy statement, it is left without a defensive response to such a solicitation. Shareholders interested in the proposal would return the proponent’s card, impacting the company’s own solicitation. The result is the pressure to include a shareholder proposal in the company’s own proxy materials to avoid shareholders shifting to the proxy card of the proponent.
To address this, the SEC proposes to amend Rule 14a-4(c)(2) to eliminate the solicitation threshold. A company would be able to obtain discretionary voting authority over a timely submitted shareholder proposal even where a proponent delivers its own proxy materials to holders of the percentage of voting securities required to approve the matter, as long as the company includes:
- a brief statement in its proxy statement describing the shareholder proposal and stating how it intends to exercise its discretionary voting authority with respect to it
- a cross-reference on its proxy card to the location of that disclosure in the proxy statement and
- a check box on its proxy card that allows shareholders to affirmatively opt-out of granting the company discretionary voting authority over the shareholder proposal.4
While, as discussed above, the SEC’s argument for the proposed Rule 14a-4(c) amendments rests on policy justifications independent of its proposed rescission of Rule 14a-8, the release stresses that amendments will become more consequential following the rescission of Rule 14a-8 because independent solicitations by shareholder proponents are expected to rise once proponents can no longer obtain inclusion of a proposal in a company’s proxy statement pursuant to Rule 14a-8, making it important to afford companies flexibility in responding to such solicitations.
The SEC also argues that the opt-out checkbox would give shareholders greater control than they have today because the current rule does not allow shareholders to opt out of providing discretionary voting. The shareholder can only grant the proxy or withhold it. The amendments would not, however, affect a proponent’s ability to use the universal proxy rules to place the company’s nominees on its own card, so a company facing a zero slate campaign with a proposal likely to draw significant attention may still elect to include it rather than risk shareholders returning the proponent’s more complete card.
Proposed amendments to Rule 14a-6
Under current Rule 14a-6, while a company including a Rule 14a-8 proposal in its proxy materials is exempt from the requirement to file preliminary proxy materials, no comparable exemption exists for a company that receives notice of a shareholder proposal submitted outside of Rule 14a-8. The SEC believes that companies choosing to seek discretionary voting authority pursuant to Rule 14a-4(c) by including the required disclosure regarding the proposal in their proxy statements should not be required to file preliminary proxy materials solely on that account, and proposes adding an exemption to that effect to Rule 14a-6.
The proposed exemption would not apply, however, where the shareholder proposal or the director elections involves a “solicitation in opposition.” In that case, the company would still be required to file preliminary proxy materials. A solicitation in opposition would include any solicitation, other than one exempt under 14a-2, that is (a) subject to Rule 14a-19; (b) made to vote against or withhold votes from any of the company's director nominees; (c) made to vote against a proposal that the company expressly supports in its proxy materials, or (d) made to vote in support of a proposal that the company does not expressly support in its proxy materials.
Modernization of certain proxy solicitation rules
In a companion release, the SEC proposed the following amendments to modernize certain proxy solicitation rules and bring them in line with technological advances to reduce compliance burdens on companies.
Removal of the requirement to deliver an annual report to shareholders
Under Rule 14a-3(b), companies, other than investment companies, that undertake proxy solicitation must deliver an annual report to shareholders accompanying or preceding the proxy statement, often called the “glossy annual report.” Many companies satisfy this requirement by “wrapping” their 10-K, since the 10-K and Rule 14a-3(b) disclosure requirements largely overlap. The SEC has proposed that companies could meet their Rule 14a-3(b) obligations by simply filing their 10-K on EDGAR in advance of their proxy statement, though the rule would also give companies the option of meeting this requirement by providing the Rule 14a-3(b) annual report to shareholders.
The SEC has also proposed removing those disclosure requirements in Rule 14a-3(b) that go beyond what is required in the 10-K, or if such information would be available in a different filing by the company. The most significant of these is the stock performance graph. Under the current rules, if the proxy statement relates to a meeting (or written consents in lieu of a meeting) for the election of directors, the annual report to shareholders must also contain the stock performance graph required pursuant to Regulation S-K Item 201(e). Currently, companies frequently include this graph in the 10-K itself. The SEC has proposed removing the stock performance graph requirement for all companies, other than investment companies.
Removal of the requirement to send the proxy statement 20 business days before the annual meeting if it incorporates information by reference
The SEC states that this requirement predates EDGAR and was intended to give shareholders time to obtain the incorporated documents by mail, and given the electronic accessibility of all filed documents, it is no longer needed.
Elimination of exempt solicitation filings
The SEC proposes to eliminate both the requirement and the ability to file a notice of exempt solicitation under Rule 14a-6(g), which currently requires shareholders who beneficially own more than USD5 million of the company’s voting securities to submit a notice of exempt solicitation on EDGAR if they solicit other shareholders with respect to matters to be voted on at the company’s annual meeting.
Over time, a practice developed where shareholders that did not meet the USD5m threshold would file a notice of exempt solicitation in order to publicize their positions on matters subject to a vote by shareholders, using EDGAR as a distribution channel. Until recently, the SEC staff did not object to these filings by shareholders below the threshold, leaving companies to spend the time and resources to respond to them and the questions that these filings generated from other shareholders.
Reduction of the broker search period
The SEC proposes reducing the minimum broker search period in connection with proxy solicitations from 20 business days to five business days. The SEC notes that the 20-business-day period was adopted to address delays in disseminating proxy materials to beneficial owners that no longer occur given technological advances that allow easy coordination among brokers, banks and beneficial owners.
Addition of contact information requirement
The SEC proposes requiring inclusion, on proxy statement and information statement cover pages, of the name, address (which can be an email address) and telephone number for someone who can answer questions about the filing.
Looking ahead
Does this mean shareholder proposals are going away?
No. If the rule is adopted and Rule 14a-8 is rescinded, we expect that shareholders will look to other ways to ensure that companies are listening to their views and that other shareholders are provided with an opportunity to consider and vote on issues that they define. Shareholders have always had the ability, albeit costly, to solicit proxies for their independent proposals to present to shareholders.
As identified by the SEC in the proposing release, we expect that shareholders will turn more directly to rely on the advance notice provisions in a company’s bylaws, which provide the procedure, timing and information requirements necessary to permit a shareholder to present matters directly for consideration at an annual meeting.
It will be important for all companies to review and better understand how their bylaws and state corporate law address the procedural and substantive consideration of advance notice matters and floor proposals.5 We also expect state governments to focus on corporate law statutes that will be looked to following a possible rescission of Rule 14a-8. States could seek to amend corporate law statutes to define (or even restrict) the terms by which shareholders can present matters before shareholders.
Will shareholder advocates demand companies provide an alternative channel?
If Rule 14a-8 is rescinded, shareholders may pressure companies to adopt bylaw amendments that provide a company-specific right, similar to Rule 14a-8, to shareholders who comply with specified procedures to obtain inclusion of their proposal in a company’s proxy materials absent Rule 14a-8. We saw this play out with proxy access. In 2011, the U.S. Court of Appeals for the District of Columbia Circuit struck down the SEC’s proxy access rule, Rule 14a-11, which would have required companies to include in their proxy materials the director nominees of any shareholder that met certain procedural, ownership and timing requirements. In the aftermath of that decision, large public pension funds, labor unions, and institutional investor advocacy groups led a highly effective effort to implement proxy access on a company-by-company basis through private ordering.
Spearheaded by initiatives like the New York City Pension Funds’ “Boardroom Accountability Project,”6 these investors used Rule 14a-8 to submit shareholder proposals demanding that companies adopt proxy access bylaws that largely mirrored the defunct SEC rule. By 2024, more than 85% of the S&P 500 had adopted a proxy access bylaw. Since shareholder advocates may not have the “lower cost” option of a shareholder proposal to drive a new private ordering campaign to replace Rule 14a-8, which is, in part, why it was as successful as it was, advocates would instead have to work through costlier channels, like proposals brought directly under advance notice bylaws, “vote no” campaigns against directors or direct engagement with a company’s largest institutional investors.7
Such a private ordering solution would likely be primarily driven by institutional shareholder interests and the design of the solution would be important to companies. The experience with proxy access bylaws is instructive. While adoption of proxy access among the larger companies was widespread, the ownership and holding period thresholds that triggered it were set high enough that the right is not easily invoked. Therefore, a well-structured “14a-8-like” shareholder proposal right could produce a similar outcome: a path that satisfies shareholder demand for access while, in practice, generating few proposals.
Will a rule adoption impact the 2027 proxy season?
While the timeline for adoption of the amendments is uncertain, it is unlikely that the final rules will be effective before the 2027 proxy season. We expect the deadline for comments to be around November 20, 2026, after which the SEC will have to consider comments and approve a final rule. The proposed amendments are likely to generate a spectrum of comments and, even if the rule is adopted during the 2027 proxy season, it is not going to be effective before the season is over. The final rule is also likely to face challenges in court, which could further delay implementation.8
For the coming proxy season, Rule 14a-8 and Rule 14a-4(c) remain in effect and are unchanged, and shareholders can continue to submit proposals pursuant to these rules, so companies must continue to ensure compliance with each rule when addressing shareholder proposals. Additionally, companies will again this year face the proxy season and shareholder proposals without the no-action letter process, as the SEC ended the shareholder proposal no-action relief process indefinitely in August 20269.
What should we expect for the 2027 proxy season?
It may be the last proxy season for shareholder proposals submitted pursuant to Rule 14a-8, so we could see shareholder advocates attempt to capitalize on the opportunity to present matters before companies and shareholders in a cost-effective way. We may even see the start of a “14a-8 private ordering” effort that seeks to codify the shareholder proposal process in a company’s organizational documents before the federal rule goes away.
These forces, coupled with the Division of Corporation Finance sitting out for another season with respect to considering no-action letters, may mean a bumpy shareholder proposal season for companies and shareholders alike.
What is the impact of the proposed proxy solicitation modernization?
Taken together, the SEC’s proposed amendments are generally favorable for public companies. The removal of the 20-business day advance delivery requirement for proxy statements that incorporate information by reference and the reduction of the minimum broker search period from 20 business days to five, should meaningfully compress transaction timelines in mergers and other extraordinary transactions.
Importantly, eliminating Rule 14a-6(g) exempt solicitation notices removes a persistent thorn, ending a practice in which shareholders below the USD5m threshold used EDGAR filings to publicize their positions.
Further, the proposed removal of the requirement for the Regulation S-K Item 201(e) stock performance graph will mean that for purposes of the calculation of peer group cumulative total shareholder return for the “Pay versus Performance” table required by Regulation S-K Item 402(v), those companies who no longer include the Item 201(e) graph will only have the option of using the peer group used in the company’s Compensation Discussion and Analysis for compensation benchmarking.
Footnotes
1. “SEC ends shareholder proposal no-action relief process,” August 18, 2026, available at https://www.aoshearman.com/en/insights/sec-ends-shareholder-proposal-no-action-relief-process.
2. Paul S. Atkins, “Keynote Address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala,” available at https://www.sec.gov/newsroom/speeches-statements/atkins-10092025-keynote-address-john-l-weinberg-center-corporate-governances-25th-anniversary-gala.
3. Paul S. Atkins, “Statement on Proposals to Rescind Rule 14a-8, Amend Rule 14a-4, and Modernize Proxy Solicitation,” September 16, 2026, available at https://www.sec.gov/newsroom/speeches-statements/atkins-statement-proposals-rescind-rule-14a-8-amend-rule-14a-4-modernize-proxy-solicitation-091626.
4. The SEC would not require companies availing themselves of this mechanism to include individual check boxes where there are multiple proposals. A single checkbox suffices. If a company follows these steps, it will not need to include the proposal in its proxy statement or provide details regarding the proposal on the proxy card, beyond what is specified above.
5. For those companies that do not have advance notice bylaws, which serve, in part, to restrict the matters that can be presented at an annual meeting, they could be blindsided by floor proposals where a new proposal is introduced (or even a director nominated) without notice and little or no opportunity to consider the issue (or the nominees).
6. “Boardroom Accountability Project: Overview,” Office of the N.Y.C. Comptroller, available at https://comptroller.nyc.gov/services/financial-matters/boardroom-accountability-project/overview/.
7. While not exactly a proposal to replace Rule 14a-8, a company has received a shareholder proposal—to be voted on in October 2026—seeking to institutionalize the current ownership and holding period compliance requirements to submit a shareholder proposal so they will continue to apply even if the SEC changes or rescinds Rule 14a-8.
8. While the precise basis of any challenge will depend on the terms of the final rule, possible grounds include that Section 14(a) does in fact authorize Rule 14a-8, which is a reading the SEC itself held for more than 80 years. A challenge would also need to address the SEC’s alternative policy rationale, which the release states is an independent and sufficient basis for rescission. The alternative rationale is that the rule’s original justifications no longer hold, that it now operates as negotiating leverage rather than a route to a shareholder vote and that no narrower version would avoid drawing the SEC into questions of state law. That rationale rests on assumptions and premises that could be contested on traditional Administrative Procedure Act grounds.
9. Division of Corporation Finance, “Statement on Rule 14a-8 Process,” available at https://www.sec.gov/newsroom/speeches-statements/corpfin-statement-rule-14a-8-process-081426.
