SEC Targets Rule 14a-8 and Proxy Mechanics in Pair of New Proposals

On September 16, 2026, the U.S. Securities and Exchange Commission (SEC) issued a pair of proposals that would significantly reshape the proxy season landscape if passed. The first, titled Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4, would eliminate the SEC’s long-standing shareholder proposal rule, Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in its entirety. The proposal would also amend the Rule 14a-4, which governs discretionary voting authority.

The second proposal, titled Proxy Solicitation Modernization, would implement a number of practical amendments to long-standing proxy mechanics in an effort to modernize a number of aspects of the proxy solicitation process.

Public comments will be open until 60 days after the date of publication of the proposing releases in the Federal Register.

Shareholder Proposals and Rule 14a-8

Background

Some context on shareholder proposals is critical to an understanding of the proposal to rescind Rule 14a-8.

The modern shareholder proposal rule has existed in a number of forms since 1942. As currently constituted, Rule 14a-8 provides a federal mechanism for shareholders of public companies to submit matters to be voted on at a company’s annual shareholder meeting. An eligible shareholder proposal will be included both in a company’s proxy statement and on its ballot for voting. Rule 14a-8 provides basic eligibility criteria and thirteen substantive bases for exclusion, but it largely exists as a default rule. If a company wants to challenge the eligibility of a particular proposal, it has historically been required to request “no-action” relief in the form of a written request to the staff of the SEC’s Division of Corporation Finance (the “Staff”), who would analyze the proposal and request and then either concur or disagree with the no-action request. This basic process has resulted in a relatively niche, but consequential, ecosystem wherein companies and proponents battle over proposals every proxy season.

Interpreting Rule 14a-8 has often been a difficult and somewhat subjective process. To aid companies and proponents alike, the Staff began issuing guidance in the form of “Staff Legal Bulletins” (SLBs) that provided guidance on its views of the requirements of Rule 14a‑8. In recent years, however, the Staff’s interpretations had become increasingly variable. As described in greater detail in our February 2025 client alert, from 2021 to 2025, the Staff issued a series of SLBs with competing guidance, reissuing and rescinding guidance from prior administrations. This consequently increased the uncertainty of an inherently uncertain process.

Following comments from current SEC Chairman Paul Atkins in fall 2025 that cast doubt on the propriety of shareholder proposals under state law, the Staff announced in November 2025 that it would suspend most of its no-action review program for Rule 14a-8. More recently, in August 2026, the staff went further, discontinuing responses to Rule 14a-8 no-action requests entirely.

In many ways, therefore, the current proposal is the logical endpoint of this trajectory.

Proposal

Under the proposal, Rule 14a-8 would be rescinded in its entirety. The federal proxy rules would no longer provide a basis for the submission of a shareholder proposal. Instead, the submission and potential inclusion for voting on any shareholder proposal would be left to state law or, if permitted by state law, a company’s governing documents.

The SEC’s primary rationale for this proposal is that it was never appropriate in the first place. The proposing release says that Rule 14a-8 exceeds the SEC’s statutory authority under Section 14(a) of the Exchange Act, noting that the statutory text of Section 14(a) authorizes the SEC to regulate the solicitation of proxies only and not whether a shareholder has the right to present a matter for a vote. Rather, whether a shareholder has the right to present a matter for vote is governed by state corporate law. The SEC notes that Rule 14a-8 began as a mechanism that deferred to state law on what was a “proper subject” for shareholder action but evolved over years and amendments to stray from the rule’s fundamental premise.

The SEC also advances independent policy reasons for rescinding Rule 14a-8. Specifically, the SEC notes that the original justifications for adopting Rule 14a-8 either have not come to fruition or are less compelling. Additionally, the proposal highlights that the rule has produced unintended consequences, including its use as leverage in private negotiations and as a “publicity mechanism” by a small number of repeat proponents.

Discretionary Authority and Rule 14a-4(c)

Recognizing that rescinding Rule 14a-8 could drive motivated shareholders to present proposals through other means, such as by raising “floor proposals” or using the universal proxy rule of Rule 14a-19, the SEC also proposes to amend Rule 14a-4(c) to expand a company’s ability to exercise discretionary voting authority over such proposals. To properly understand how Rule 14a-4(c) interacts with Rule 14a-8, however, it helps to start with a brief discussion of how discretionary voting authority operates today.

When a company solicits proxies for voting at a meeting, its proxy card typically names particular company representatives as proxies and authorizes them to vote shares as directed by the signing shareholder. Rule 14a-4(c) covers a variety of instances when one of those representatives is granted “discretionary authority” to vote as they see fit on matters that are not specifically identified on the card. As it relates to shareholder proposals, Rule 14a-4(c)(1) covers instances where a shareholder informs a company that it intends to bring a proposal before the company’s proxy materials are mailed. Under Rule 14a-4(c)(1), a company will generally retain discretionary authority to vote on a matter if it does not receive “timely” notice of the proposal. In instances where a company has an advance notice bylaw, the company retains discretionary authority if the company did not have notice of the matter by the date specified by an advance notice provision. If a company does not have an advance notice bylaw, the company would retain discretionary authority if it did not have notice of the matter at least 45 days before the anniversary of the prior year’s proxy statement mailing. In both cases, the company would need to include a specific statement in its proxy statement that it intends to exercise discretionary authority on the proposal. Further, if a company receives timely notice of the matter—either under the default 45-day test or because the proposal was submitted in accordance with a company’s advance notice bylaw—it would still retain discretionary authority to vote on a proposal if the company includes in its proxy statement “advice on the nature of the matter and how the issuer intends to exercise its discretion to vote on each matter.”

On the other hand, under Rule 14a-4(c)(2), a company would not be able to exercise discretionary voting authority on a proposal if the shareholder proponent: (i) timely provides the company with a written statement that it intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the company’s voting shares required under applicable law to carry the proposal; (ii) includes the same statement in its own proxy materials filed under Rule 14a-6; and (iii) immediately after soliciting the percentage of shareholders required to carry the proposal, provides proof of that solicitation to the company.

Essentially, Rule 14a-4(c) was adopted to address “floor proposals,” where a shareholder raises a matter to be voted on at the meeting itself. The ability to exercise discretionary authority was granted to companies in order to be able to address surprise last-minute requests from shareholders without disruption to the conduct of the company’s annual meeting. Historically, floor proposals have been relatively uncommon, in large part because Rule 14a-8 offered shareholders a more effective route.

Rescinding Rule 14a-8 removes that route, and the SEC recognizes that some shareholders may respond by turning to floor proposals instead. To address this response, the proposal would amend Rule 14a-4(c) to permit a company to exercise discretionary authority over a timely submitted floor proposal not included in its proxy materials, provided it does the following:

• In the proxy statement, includes a brief description of the matter and a statement of how the company intends to vote through its discretionary authority;
• On the proxy card, adds a cross-reference to the location of the disclosure addressing the proposal in the proxy statement; and
• On the proxy card, includes a check box that, if checked by a shareholder, would withhold the company’s discretionary authority with respect to that shareholder’s shares.

The SEC notes that the Rule 14a-4(c) amendments have independent justification and could be adopted even if the Rule 14a-8 rescission is not.

Proxy Modernization Proposals

The second proposal is aimed at modernizing the proxy solicitation process and contains five substantive proposed amendments:

• Elimination of the requirement to deliver annual reports to security holders and elimination of the performance graph;

• Elimination of the 20-business-day delivery deadline for proxy statements incorporating information by reference;

• Elimination of the requirement to submit a notice of exempt solicitation;

• Shortening the broker search period from 20 to 5 business days; and

• Requiring contact information on proxy statement and information statement cover pages.

Each is discussed in more detail below.

Elimination of the Annual Report to Security Holders and the Performance Graph

Exchange Act Rule 14a-3(b) currently requires that a proxy statement for a meeting at which directors will be elected be accompanied or preceded by an annual report to security holders. The report must contain audited financial statements, MD&A, business and segment information, director and officer information, and market-price and dividend data. As the SEC notes in the proposal, because nearly all of this content is also required in Form 10-K, most registrants comply with this requirement through a “Form 10-K wrap” or integrated report, which eliminates much of the readability benefit that the requirement was meant to provide. Nevertheless, companies have still been required to technically comply with Rule 14a-3(b) and even file an Annual Report to Shareholders (ARS) containing this annual report on EDGAR.

The proposal would eliminate the delivery requirement altogether. A registrant with a Form 10-K on file for its most recent fiscal year could satisfy Rule 14a-3(b) by simply filing that Form 10-K on EDGAR; a registrant without a Form 10-K could instead furnish an annual report to security holders on EDGAR, without delivering it to shareholders. Registrants would remain free to send a fulsome annual report voluntarily, and such a report would continue to be “furnished” rather than “filed,” and thus outside Section 18 liability.

The SEC also proposed to rescind the applicability of Item 201(e) of Regulation S-K for all registrants other than investment companies. Item 201(e) of Regulation S-K currently requires registrants to deliver a stock performance graph to holders in their annual report, which many registrants voluntarily include in Form 10-K. However, the SEC notes that, given technological advancements since the adoption of Item 201(e), investors no longer need a stock performance graph delivered by registrants as they can access stock performance information via the internet.

Elimination of the 20-Business-Day Delivery Deadline for Incorporation by Reference

Note D.3 of Schedule 14A currently requires a registrant to send its proxy statement to shareholders at least 20 business days before the meeting when it incorporates information by reference. Forms S-4 and F-4 impose a parallel 20-business-day minimum when a prospectus incorporating information about the registrant or a target is sent ahead of a shareholder vote. These requirements were designed to give shareholders time to request and receive the incorporated paper documents. However, as the SEC notes in the proposal, the filings that may be incorporated by reference are now freely available on EDGAR. Therefore, the delivery concern that the 20- business-day deadlines were designed to address has largely evaporated. As a result, the SEC is proposing to eliminate the minimum delivery deadlines prescribed by Note D.3 and Forms S-4 and F-4. The practical benefit is greatest in the business-combination context: for a Form S-4 or F-4 merger vote, removing the minimum period can shorten the transaction timeline and reduce the window in which market movement or a competing bid might disrupt the deal.

Recission of the Notice of Exempt Solicitation Filing Requirement

Rule 14a-2(b)(1) exempts from most of the proxy rules a solicitation by a person who does not seek proxy authority. This is used sometimes by shareholders to publicize their views without full proxy compliance. Rule 14a-6(g) requires that a shareholder owning more than $5 million of the registrant’s securities who conducts a written, non-public exempt solicitation must submit a Notice of Exempt Solicitation on EDGAR and must attach the soliciting materials. The notice was intended to give registrants and investors visibility into otherwise-hidden solicitations by large holders.

However, the SEC notes that the vast majority of notices submitted on EDGAR in recent years were not required by Rule 14a-6(g) either because the filer did not have a holding of more than $5 million of the registrant’s securities or because the information was already publicly available. In addition to noting that such voluntary notices do not serve the rule’s original purpose, the SEC notes that such notices may be confusing to shareholders and may make it difficult for shareholders to access required filings on a registrant’s EDGAR page. Accordingly, the SEC proposes rescinding the notices of exempt solicitation pursuant to Rule 14a-6(g) to reduce investor confusion and improve the accessibility of information on EDGAR.

Shortening the Broker Search Period from 20 to 5 Business Days

Rule 14a-13 requires a registrant to ask its record holders—typically brokers and banks—how many sets of proxy materials they will need to forward to beneficial owners. This “broker search” must currently be initiated at least 20 business days before the record date. The 20-business-day requirement was adopted in 1986 and was largely implemented due to delays in a paper-based system. However, as the SEC notes, technological advancements have obviated such delays, and the broker search can now be completed in as few as three days. The SEC has recently taken steps to ease the burden of Rule 14a-13; in January 2026, the SEC published guidance providing that the Staff would not object if a company conducted its broker search less than 20 business days before the record date so long as the company reasonably believed that its proxy materials would be timely disseminated to beneficial owners and the company otherwise complied with Rule 14a-13.

Now, the SEC proposes to codify this position by formally changing the minimum broker-search period from 20 business days to 5 business days.

The change would reduce timing friction in two settings that the release specifically identifies: transactions requiring shareholder approval (where the record date cannot be set until 20 business days after the search, lengthening deal timelines) and contested elections or other proxy contests (where the lengthy search can delay a registrant’s mailing relative to a dissident’s). The SEC acknowledges a trade-off: because the broker search is one of the few points at which an upcoming record date becomes visible to intermediaries, shortening the period may reduce the time dissidents have to accumulate shares or coordinate, and may compress the window for institutions to recall loaned shares in order to vote.

Cover Page Contact Information

The SEC proposes to require that the cover page of a proxy or information statement include contact information—a name, address (which may be an email address), and telephone number— for a representative who can respond to Staff questions about the filing, mirroring a requirement already familiar from registration statements and tender offer statements.

Technical Amendments

The release rounds out with an array of conforming and technical corrections—removing obsolete cross-references, correcting typographical errors, and updating rules and forms to reflect the substantive changes above.

Looking Ahead

The proposals will be subject to a 60-day comment period. The SEC will then consider whether to adopt final rules.

If Rule 14a-8 is rescinded, there will be substantial uncertainty as to the application of state law to shareholder proposals, and companies will need to carefully analyze shareholder proposals with the backdrop of state laws instead of Rule 14a-8. In some instances, states may adopt amendments to their corporate codes to provide greater certainty on the shareholder proposal. This new analytical framework may, at least initially, increase the effort and cost that companies must expend to address shareholder proposals.

On the other hand, the changes proposed in the proxy modernization proposal are relatively straightforward and will likely be welcomed by companies looking to reduce the burden of certain proxy solicitation procedures.

One thing is certain¾if the SEC adopts final rules implementing the proposals, the 2027 proxy season landscape will be greatly different than in years past.