SEC Proposes Rule 14a-8 Rescission and Proxy Solicitation Reforms

On September 16, 2026, the Securities and Exchange Commission (the SEC) issued two proposed rulemakings that, if adopted, would introduce substantial changes to public companies’ annual meeting and proxy solicitation processes.

The SEC’s proposed rule on Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4¹ (the Rule 14a-8/14a-4 Proposal) would substantially alter decades-old practices relating to the submission of and voting on shareholder proposals. Specifically, the Rule 14a-8/14a-4 Proposal would:

• Rescind Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act), which establishes the federal procedural and substantive framework under which companies are required to include qualifying shareholder proposals in their proxy materials; and
• Expand the circumstances in which a public company may exercise discretionary voting authority with respect to matters not included in its proxy materials via proposed amendments to Rule 14a-4 under the Exchange Act.

Separately, the SEC is proposing a number of amendments to its rules regarding proxy solicitation in a separate proposed rule on Proxy Solicitation Modernization² (the Proxy Modernization Proposal), which are intended to reflect developments that have occurred since the rules were initially adopted or last amended.

Rule 14a-8: SEC Oversight of the Shareholder Proposal Process

Background

When initially adopted in 1942,³ Rule 14a-8 required a company to include a shareholder proposal in its proxy statement if (i) the proposal concerned a “proper subject for action by security holders” under applicable state law and (ii) the shareholder proponent provided the company with “reasonable notice” of the proposal.

The rule was intended to “assure to the stockholders . . . those rights that [the stockholder] has traditionally had under State law” relating to presenting and voting on shareholder proposals.⁴

The “proper subject” component of Rule 14a-8 was therefore intended to be evaluated under applicable state law. Over time, however, the SEC amended Rule 14a-8 in ways that, in the current SEC’s view, “incrementally . . . increased [its] role in defining and interpreting"⁵ standards that implicate state corporate law. The proposing release describes a view that Rule 14a-8 now effectively functions “as a Federal common law as to what constitutes a proper subject for shareholder action.”⁶

Although it would be a dramatic departure from decades of SEC precedent, the changes proposed by the SEC in the Rule 14a-8/14a-4 Proposal are in line with SEC Chair Paul S. Atkins’s comments and actions on this topic since the end of the 2025 proxy season. In October 2025, Chair Atkins questioned Rule 14a-8’s “fundamental premise that shareholders should be able to force companies to solicit for their proposals—to the extent that a shareholder proposal is a proper subject for shareholder action under state law—at little or no expense to the shareholder.”⁷ One month later and in effect for the already-underway 2026 proxy season, the SEC’s Division of Corporation Finance (Corp Fin) withdrew from its longstanding role in responding to no-action requests from companies seeking to exclude shareholder proposals from their proxy statements.⁸ At the conclusion of the 2026 proxy season, Chair Atkins remarked that “the world did not end simply because the [SEC] staff stopped responding to no-action requests” and likened Corp Fin’s withdrawal to “removing the training wheels from the shareholder proposal bicycle.”⁹ He repeated his belief that the SEC staff’s “interposition between companies and shareholder proponents is unnecessary to effectively and efficiently resolve whether shareholder proposals should be included in proxy statements.”¹⁰ In his statement accompanying the Rule 14a-8/14a-4 Proposal, Chair Atkins reflected on the “increased competition among states for corporate domicile” and expressed an expectation that “the proposed rescission of Rule 14a-8 should, if adopted, provide states with both the legal clarity and the motivation to implement their own ideas for a sensible shareholder proposal framework.”¹¹

Although less targeted in her critique of Rule 14a-8, SEC Commissioner Hester M. Peirce has also been critical of the widespread use of the shareholder proposal process, particularly in efforts by shareholders to use the process to advance environmental, social, and governance initiatives. In December 2025, Commissioner Peirce said of shareholder concerns (quoting former SEC Commissioner Elad Roisman): “While we all have a right to get on our soapboxes, we have no right to force others to pay for them.”¹² 

Proposed Rescission of Rule 14a-8

The SEC now proposes to rescind Rule 14a-8 in its entirety. If the Rule 14a-8/14a-4 Proposal is adopted, the question of whether a shareholder proposal may be voted on by shareholders and whether a company must include the proposal in its proxy materials would be left to the law of the company’s jurisdiction of organization and, where permitted by that law, the company’s governing documents. According to the proposing release, such rescission is justified on the basis that “the rule improperly intrud[es] into state law without express authorization from Congress.”¹³ Furthermore, even if Rule 14a-8 is found to be within the SEC’s statutory authority, the SEC would propose to rescind the rule on independent policy grounds.

The Statutory Argument for Rescinding Rule 14a-8

In determining that Rule 14a-8 exceeds the SEC’s statutory authority, the SEC grounds its proposal in a narrow reading of Section 14(a) of the Exchange Act, which it views as authorizing the SEC to regulate the proxy solicitation process (i.e., the process of requesting the power to vote on a shareholder’s behalf) rather than the substantive scope of shareholder voting rights.¹⁴ When read narrowly in this manner, the SEC views Rule 14a-8’s regulation of shareholder proposal access as outside the scope of the SEC’s statutory authority. 

The Policy Argument for Rescinding Rule 14a-8

From an independent policy standpoint, the proposing release argues that the shareholder proposal process differs materially from the system in place when Rule 14a-8 was adopted more than 80 years ago: proposal volume is now high, average proposal support is low, and companies’ costs of including proposals are “no longer small.”¹⁵

The proposing release also points out that when the SEC adopted Rule 14a-8 it did so on the assumption that the SEC would be able to easily determine “which matters are proper to present to shareholders for a vote under State law.”¹⁶ The numerous amendments to Rule 14a-8 over the years indicate that the SEC staff has since then continuously struggled to apply these standards. The SEC now argues that the SEC’s job is not to resolve ambiguities where “State law is unclear or silent as to what matters can be presented to shareholders, and it is not the [SEC’s] role to fill those gaps or impose uniformity through the Federal proxy rules.”¹⁷

Potential Impacts of the SEC’s Rescission of Rule 14a-8 

Without Rule 14a-8, the question of what shareholder proposals may be submitted and presented for a vote at a company’s shareholder meeting would be governed by the law of the company’s jurisdiction of organization (and, where permitted by that law, its governing documents). While it is customary for public companies to have advance notice bylaws setting forth specified procedural and informational requirements that shareholders must satisfy to present proposals at a shareholder meeting, these provisions have remained largely undeveloped, in part due to the federal framework provided by Rule 14a-8 for the inclusion of shareholder proposals in the company’s proxy statement.

Significantly, the full rescission of Rule 14a-8, if adopted as proposed, would mean that shareholders would no longer have an express federal right to include a properly submitted shareholder proposal in the company’s proxy materials. Practically, given that voting at a meeting of shareholders is predominantly by proxy, this means that shareholders would be required to conduct an independent proxy solicitation for the proposal. Current state laws and company governing documents do not generally address circumstances beyond Rule 14a-8 by which a shareholder proposal may be presented in the company’s proxy statement (in lieu of an independent proxy solicitation by the shareholder submitting the proposal). As noted in the proposing release, the SEC believes deference should be given to “States and companies to determine if, and under what circumstances, shareholder proposals must be included in company proxy materials.”¹⁸ 

To address this potential gap, a company’s state of incorporation (or, if permitted, its governing documents) could set forth additional standards governing the submission of shareholder proposals, including, among other things, (i) what topics are a proper subject for shareholder action and therefore permissible subjects for shareholder proposals (including the permissibility of precatory proposals), (ii) minimum share ownership thresholds or holding periods required for a shareholder to submit shareholder proposals, (iii) resubmission thresholds for shareholder proposals previously voted on by shareholders, or (iv) other additional procedural or informational requirements for submitting shareholder proposals to companies. Notably, on September 18, 2026, the Council of the Corporation Law Section of the Delaware State Bar Association issued a statement that it is incorporating the potential repeal of Rule 14a-8 into its annual review of Delaware’s corporate statutes, from which it may propose statutory amendments for recommendation to the Delaware General Assembly.¹⁹

The proposing release acknowledges the disruption the rescission of Rule 14a-8 would likely cause to shareholders and companies, who “are likely to have shaped certain governance and engagement practices around the rule’s provisions.”²⁰ Although the SEC believes that “longevity is not a substitute for legal authority” and thus not sufficient justification for retaining Rule 14a-8, the proposing release is seeking comment on potential measures to mitigate the impact of the rule’s rescission or, alternatively, any alternatives to complete rescission that would fall within the SEC’s statutory authority.²¹ 

Rule 14a-4(c): Discretionary Voting for Matters Not Included in a Company’s Proxy Materials

Background

Most shareholders rely on the proxy voting process—a shareholder’s authorization of a company representative, or proxy, to vote the shareholder’s shares on the shareholder’s behalf at a meeting of shareholders—rather than attending and voting in person at the meeting. The company’s named proxies will vote the shareholder’s shares in accordance with the instructions on the company’s proxy card. However, shareholders do not always vote on all matters on the proxy card, and not all matters voted on by shareholders at the annual meeting are included on the company’s proxy card. In these cases, the company may seek discretionary authority to vote the shareholder’s proxies in accordance with the company’s own preference. SEC rules generally permit the company’s named proxies to exercise discretionary voting authority with respect to any matter contained in the company’s proxy materials if the shareholder has properly submitted a proxy but did not specify how its shares are to be voted on the matter, but they take a more restricted approach when matters are not contained in the company’s proxy materials.

Rule 14a-4(c) provides limited circumstances in which discretionary voting authority is generally conferred for a proposal not included in proxy materials, subject to minimal disclosure in the proxy statement, in certain cases. These circumstances include, among others, proposals received without timely notice and proposals that relate to matters incident to the conduct of the meeting. However, under current Rule 14a-4(c)(2), for a proposal timely received outside the Rule 14a-8 process and not included in a company’s proxy materials for a company’s annual meeting, the ability of a company’s named proxies to exercise discretionary voting authority on the proposal with respect to proxies properly submitted to the company depends on specific disclosures made by the company in its proxy materials and, critically, on whether the proponent has delivered its own proxy materials to holders of at least the percentage of the company’s voting shares required under applicable law to carry the proposal.

Significantly, the exercise of discretionary voting authority for timely received shareholder proposals under current rules is predicated on whether the proponent has solicited a minimum percentage of the company’s voting shares, and not on whether the proponent has solicited all of the company’s shareholders. In other words, under current rules, “a single shareholder proponent could effectively prevent a company from seeking and obtaining discretionary voting authority”²² with respect to all proxies received by the company for the annual meeting even if the proponent did not actually solicit the shareholders submitting those proxies (as long as the proponent solicited at least the minimum number of holders necessary to carry the vote on the proposal). In the face of this consequence, a company may determine to include the shareholder proposal in its proxy materials, even when not otherwise required, due to the possibility—even though still a high hurdle--that the proponent’s own solicitation could result in the proposal receiving a sufficient number of favorable votes to approve the proposal.

Following the 2022 adoption of the universal proxy rules, which included an amendment to the “bona fide nominee rule” requiring director consent to be named in “a proxy statement relating to the registrant’s next annual meeting of shareholders” (emphasis added),²³ a practice has developed by some proponents submitting shareholder proposals outside the Rule 14a-8 process to also list the company’s director nominees on the proponent’s proxy card even where the proponent does not have a competing director slate. This “zero slate” strategy increases the risk to the company described above because it is designed to increase the likelihood that shareholders will choose to vote the proponent’s proxy card (and not the company’s proxy card) so that they can vote on both the company’s nominees and the proponent’s proposal(s). This anomaly created by the universal proxy rules has resulted in additional pressure on companies to voluntarily include shareholder proposals submitted outside the Rule 14a-8 process in their proxy materials and form of proxy, even though they are not required to do so.

Proposed Amendments to Rule 14a-4(c)(2)

The SEC staff is proposing to amend Rule 14a-4(c)(2) to facilitate the ability of companies to exercise discretionary voting authority with respect to proposals that are timely received outside of the Rule 14a-8 process (which will be all proposals if Rule 14a-8 is rescinded as proposed) and not included in the company’s proxy materials.

If the proposed amendment to Rule 14a-4(c)(2) is adopted, a company may exercise discretionary voting authority with respect to any timely received shareholder proposal received outside of the Rule 14a-8 process, even if the proposal is not included on the company’s proxy card, so long as the company:

• Includes in the proxy statement “a brief description of the matter or matters and how the registrant intends to exercise its discretion to vote on each matter”;
• Includes on the form of proxy “a cross-reference to such description in the proxy statement”; and
• Includes on the form of proxy “a box by which a security holder may elect not to confer discretionary voting authority on the same matter(s).”

Potential Impacts of the SEC’s Amendments to Rule 14a-4(c)(2)

The proposed amendment to Rule 14a-4(c)(2) eliminates the consequence under existing Rule 14a-4(c) that would prohibit a company from exercising discretionary voting authority with respect to any proxies it receives if the proponent delivers its own proxy materials to the minimum percentage of the company’s voting shares required under applicable law to carry the proposal. While the “bona fide nominee” rule would remain intact as amended by the universal proxy rules, the SEC intends by the proposed amendment to address the issues created by the current rule and further compounded by recent “zero slate” campaigns by expanding a company’s ability to retain discretionary voting authority on a shareholder-solicited proposal and thereby lessen the pressure on companies to voluntarily include the proponent’s proposal in its own proxy materials. Through the proposed amendments, the SEC is also seeking to counterbalance this expansion by allowing shareholders, via a check box on the company’s form of proxy, to prohibit the company from exercising this discretionary voting authority on behalf of that shareholder.

If adopted, the proposed Rule 14a-4(c)(2) amendments, taken together with the proposed rescission of Rule 14a-8, are intended to better align with the SEC’s goal to leave decisions about whether and when shareholder proposals should be included in company proxy materials to the states and a company’s governing documents. As explained in the proposing release, the SEC is concerned that, without the proposed amendments to Rule 14a-4(c)(2), a company may still feel pressure to voluntarily include a proponent’s proposal in its proxy materials even if not required to do so, which would be counter to the SEC’s goal in rescinding Rule 14a-8. The SEC has indicated, however, that it will consider the amendments to Rule 14a-4(c)(2) separately from Rule 14a-8 as well due to the independent justifications for them as described above.

Other SEC Rules Relating to the Proxy and Proxy Solicitation Process

Background

The Proxy Modernization Proposal that the SEC separately proposed on September 16, 2026 includes additional proposed amendments to various other rules governing aspects of the proxy solicitation process, which are intended to address technical advancements and other changes since the rules were initially adopted or last amended.

Proposed Amendments to Rules Relating to Proxy Voting and Proxy Solicitation

The Proxy Modernization Proposal, if adopted, would modernize several aspects of proxy delivery and solicitation to reflect the widespread availability of EDGAR filings, electronic delivery, and related technological developments. Among other changes, the SEC proposes to eliminate the annual-report delivery requirement, eliminate certain 20-business-day delivery periods for incorporated-by-reference materials, eliminate the Notice of Exempt Solicitation requirement, shorten the minimum broker-search period from 20 business days to five business days, and require specified contact information on proxy-statement and information-statement cover pages.

Next Steps

Comments on each of the Rule 14a-8/14a-4 Proposal and the Proxy Modernization Proposal are due on November 20, 2026.