On September 16, 2026, the U.S. Securities and Exchange Commission (SEC or Commission) issued two proposals to amend the federal proxy rules to implement priorities of SEC Chairman Paul S. Atkins:

• The first, and more consequential, proposal would rescind Rule 14a-8, the shareholder proposal rule, and would amend Rule 14a-4 to provide companies with more flexibility, and shareholders more control, over the use of discretionary voting on proposals that are presented at a shareholder meeting but not included in the company’s proxy materials.
• The second proposal would modernize rules related to certain aspects of proxy solicitations to reflect changes in technology and shareholder communications and reduce compliance burdens and investor confusion.

Proposed Rescission of Rule 14a-8

Background

Securities Exchange Act Rule 14a-8 requires a company to include shareholder proposals in its proxy statement unless one of the procedural or substantive bases for exclusion applies. Shareholders have long relied on Rule 14a-8 to submit proposals to the companies in which they invest, and companies have availed themselves of the SEC staff’s informal process to seek no-action letters concurring with their views that a proposal may be excluded under the rule. Proposals submitted under the rule are typically non-binding.

The proposal to rescind Rule 14a-8 advances a priority for Chairman Atkins, who over the years has raised questions about the intersection of Rule 14a-8 and state corporate law, and the proper role and authority of the SEC.¹ It also follows actions by the SEC’s Division of Corporation Finance to curtail and then cease the no-action letter process.² 

The SEC’s Rationales for Rescission

The proposing release offers two independent rationales for rescission, and the Commission says either one would justify the action on its own.

The first is statutory. Exchange Act Section 14(a) authorizes the SEC to regulate how a proxy solicitation is conducted and what must be disclosed. It does not, in the Commission’s view, enable the SEC to decide the threshold question of whether a matter may be put to a shareholder vote, which is the purview of state corporate law and a company’s charter and bylaws. The release notes that the Commission has stated that Section 14(a) and its rules are intended to facilitate shareholders’ state law rights so that the corporate proxy process “functions, as nearly as possible, as a replacement for an actual, in-person gathering of security holders.”³  According to the Commission, rather than providing a procedural mechanism that facilitates rights that shareholders already hold under state law, Rule 14a-8 imposes eligibility criteria and exclusion standards that are not grounded in state law. The release states that, over time, “the Commission has increasingly assumed responsibility for defining and interpreting standards that implicate core State law concepts of corporate governance,” and that Rule 14a-8 today effectively operates as a “Federal standard governing when a matter is properly put before shareholders for a vote through the proxy.”⁴ 

The second rationale is based on policy and provides an independent basis for rescission. The Commission argues that the rule’s original justifications either have not been substantiated in practice or are less compelling today. Among the points made are:

• including a shareholder proposal in a company’s proxy statement is no longer inexpensive for companies;
• most of the shareholder proposals submitted today are not supported by management and, when voted on, draw little shareholder support;
• proposal volume has grown sharply over the years; and
• it is often not straightforward to determine which matters are properly subject to a shareholder vote under state law, in part because state law is frequently silent, which the Commission believes is likely attributable to companies and proponents looking to Rule 14a-8 and the Commission rather than the states on these matters.

The release also flags what the Commission views as “unintended consequences” of the rule, including that the rule:

• is used as a tool to gain leverage in negotiations with management or a means to secure private benefits;
• draws the Commission into interpreting state law; and
• has contributed to a lack of state frameworks related to the submission of shareholder proposals.

Practical Impacts of Rescission

Rescission of Rule 14a-8 would eliminate the federal requirement to include shareholder proposals in a company’s proxy statement. Whether and how a shareholder could bring a proposal to a vote would be governed solely by the law of the company’s state of incorporation and the company’s organizational documents. Procedural and substantive parameters for proposals, such as ownership thresholds, eligible subject matter, procedural steps, and the forum for resolving disputes, would be subject to state law and private ordering. States are likely to take different approaches to shareholder proposals.⁵ 

The proposed rescission is subject to public comment and the release specifically seeks input on whether companies and proponents have reliance interests in the existing rule that the Commission should weigh, and on narrower alternatives within the Commission’s authority.

The Related Rule 14a-4(c) Amendments

The SEC also proposed to amend Rule 14a-4(c), which governs a company’s discretionary authority. When a shareholder submits a proposal outside of Rule 14a-8 and the company does not include that proposal on the company’s proxy card, the company can generally vote the proxies that it receives in the company’s discretion, so long as the company describes the matter in its proxy statement and states how it intends to vote. This discretionary authority is not available if the proponent solicits holders of enough shares to carry the proposal and satisfies the related procedural requirements. As a practical matter, most companies include shareholder proposals submitted under the governing documents in their proxy statement and on their proxy card so that the company can collect shareholder votes on the proposal and the vote does not turn solely on the shareholder’s solicitation.

Under the proposed amendment, a company could vote the proxies that it receives in its discretion on a proposal omitted from the company’s proxy card no matter how widely the proponent has solicited, as long as the company briefly describes the proposal, states how it intends to vote, and adds a check box to its proxy card that any shareholder could mark to prevent the company from exercising its voting discretion. The change would give companies some flexibility and would enable individual shareholders to choose whether to allow or prevent the company from exercising discretionary authority. The Commission notes that these amendments are independent from, and would not be dependent on, whether Rule 14a-8 is ultimately rescinded.

Proxy Solicitation Modernization

In a separate release, the SEC proposed updates to the proxy solicitation rules aimed at reducing burdens and reflecting changes since the rules were adopted or last amended. The principal changes are to:

• Eliminate the requirement to deliver an annual report to security holders. The proposal would amend Rule 14a-3 to eliminate the requirement to deliver a separate annual report to security holders for a company that already has a Form 10-K on file on EDGAR for its most recent fiscal year.⁶  In practice this would end the need to print or deliver a Form 10-K, “Form 10-K wrap,” or “glossy” annual report.
• Eliminate the requirement to disclose a stock performance graph. In a related change, the proposal would remove the stock performance graph under Item 201(e) of Regulation S-K for all registrants other than investment companies, on the view that comparable performance data is now readily available online. Investment companies and business development companies would keep the requirement, to preserve parity among regulated funds. Smaller reporting companies are already exempt from this requirement.
• Shorten the broker search period to five business days. The “broker search” is the inquiry a company sends to banks and brokers before the record date to determine how many sets of proxy materials these intermediaries need to forward to beneficial owners of the company. The proposal would shorten the minimum broker search period from 20 business days to five business days before the record date, on the view that electronic coordination among intermediaries has made the longer period unnecessary. The Commission notes that this would give companies more flexibility in scheduling meetings and transactions, and acknowledges that it could negatively impact market participants that learn of the record date via a broker search.
• Eliminate the 20-business-day incorporation-by-reference delivery deadline. The proposal would remove Note D.3 to Schedule 14A and the parallel 20-business-day requirements in Forms S-4 and F-4. Those provisions require a proxy statement or prospectus that incorporates information by reference to be delivered at least 20 business days before the meeting or, where no meeting is to be held, at least 20 business days prior to the date that the votes, consents, or authorizations may be used to effect the corporate action. The same change would apply to information statements under Schedule 14C.
• Eliminate the requirement and the option to submit Notices of Exempt Solicitation. The proposal would rescind Rule 14a-6(g) and eliminate both the requirement and the option to file a Notice of Exempt Solicitation on EDGAR. A notice is currently required when a holder of more than $5 million of a company’s securities conducts a written exempt solicitation. Its original purpose was to give companies and other market participants visibility into non-public exempt solicitations by large shareholders. The Commission notes that most recent notices have been filed voluntarily by holders below the threshold, cites concern about investor confusion, particularly where a shareholder files multiple notices and where the filings appear on EDGAR alongside the company’s own materials, and points to other avenues for public dissemination.
• Require the inclusion of contact information on proxy statement and information statement cover pages, with similar householding change. The proposal would revise the cover pages of Schedules 14A and 14C to require the name, address (which may be an email address), and telephone number of a representative who can answer questions about the filing. A parallel change to the householding disclosure in Schedule 14A would let companies provide an email address rather than a mailing address.

Key Takeaways

• Rule 14a-8 still applies. Even if adopted, the rules are unlikely to be effective for the 2027 proxy season.
• Rescission of Rule 14a-8 is likely to draw a court challenge. Rescission would rest on the Commission’s reading of its authority under Section 14(a), an issue the release addresses at length. A rule adopted on that basis could be tested in court. The initial views expressed on the proposal from some quarters of the shareholder community have been swift and negative. Given how significant the rescission of Rule 14a-8 would be, interested parties in the shareholder proponent community may be motivated to challenge the rescission.   
• The intersection with state law is likely to be a key area of debate in the coming months. The potential rescission of Rule 14a-8, and the proposing release itself, focus attention on state law and how states will respond to these developments. A debate on that front is likely to ensue in the coming months and become part of the ongoing debates concerning the state of incorporation for public companies.
• The Commission is seeking public comment on a broad array of questions. Each proposal includes an extensive request for comment and interested parties should consider whether to submit a comment. The comment period for each proposal runs through November 20, 2026.

For more information on these proposals, including how they may affect your company, please contact any member of the firm’s Public Company Representation practice or Corporate Governance practice.

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[1]  See, e.g., Paul S. Atkins, Keynote Address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala (Oct. 9, 2025), available at https://www.sec.gov/newsroom/speeches-statements/atkins-10092025-keynote-address-john-l-weinberg-center-corporate-governances-25th-anniversary-gala; Paul S. Atkins, Remarks at the Society for Corporate Governance Conference (July 9, 2026), available at https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-society-corporate-governance-07-09-2026-remarks-society-corporate-governance-conference; and Paul S. Atkins, Shareholder Rights, the 2008 Proxy Season, and the Impact of Shareholder Activism (July 22, 2008), available at https://www.sec.gov/newsroom/speeches-statements/spch072208psa-shareholder-rights-2008-proxy-season-impact-shareholder-activism. 

[2]  For more information on these developments, please see our previous client alerts on the October 2025 keynote address (link), the November 2025 announcement from the Division of Corporation Finance (link), and the August 2026 announcement from the Division of Corporation Finance (link).

[3]  See Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4, Exchange Act Release No. 34-106383 (September 16, 2026) footnote 46 and accompanying text, available at https://www.sec.gov/files/rules/proposed/2026/34-106383.pdf (proposing release).

[4]  See proposing release.

[5]  See, e.g., Tex. Bus. Orgs. Code Ann. section 21.373 (for eligible publicly traded companies that opt in, requires a shareholder or group of shareholders to hold a minimum amount of a company’s securities for a minimum amount of time, and to solicit a minimum percentage of shares entitled to vote on the proposal, in order to submit a matter for a shareholder vote). Delaware and Nevada law currently do not explicitly address shareholder proposals.

[6]  Existing Rule 14a-3(b) requires that a proxy statement that relates to an annual (or special meeting in lieu of the annual) meeting of security holders, or written consent in lieu of such meeting, at which directors are to be elected, be accompanied or preceded by an annual report to security holders. The annual report disclosure requirements are set forth in Rule 14a-3(b).