On December 11, 2025, the President signed an Executive Order titled “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors” (the “EO”).  The EO focuses on the influence of proxy advisory firms, specifically Institutional Shareholder Services (“ISS”) and Glass, Lewis & Co. (“Glass Lewis”).  According to the EO, ISS and Glass Lewis control over 90% of the proxy advisory market.

Among its directives, the EO instructs the Securities and Exchange Commission (the “SEC”) Chair to review all rules, regulations, guidance, bulletins, and memoranda relating to proxy advisors.  The EO further instructs the SEC Chair to consider revising or rescinding any such materials that are inconsistent with the purposes of the order.  The EO particularly targets policies and guidance that implicate diversity, equity, and inclusion (“DEI”) and environmental, social, and governance (“ESG”).  In addition, the EO directs the SEC Chair to consider revising or rescinding rules, regulations, guidance, bulletins, and memoranda relating to shareholder proposals, including Rule 14a‑8.  Further, the EO directs the SEC Chair to:

  • Enforce antifraud provisions of the federal securities laws with respect to material misstatements or omissions contained in proxy advisors’ proxy voting recommendations.
  • Assess whether proxy advisors whose activities fall within the scope of the Investment Advisers Act of 1940, as amended, and the rules promulgated thereunder, should be required to register as investment advisers.
  • Consider requiring proxy advisors to provide increased transparency regarding their recommendations, methodologies, and conflicts of interest, especially with respect to DEI and ESG factors.
  • Analyze whether, and under what circumstances, a proxy advisor may serve as a vehicle for investment advisers to coordinate and augment their voting decisions with respect to a company’s securities and, through such coordination, form a “group” for purposes of Sections 13(d)(3) and 13(g)(3) of the Securities Exchange Act of 1934, as amended.
  • Direct SEC staff to examine whether the practice of registered investment advisers engaging proxy advisors and following their recommendations regarding non-pecuniary factors in investing—including, as appropriate, DEI and ESG factors—is inconsistent with advisers’ fiduciary duties..

The EO also directs the Chair of the Federal Trade Commission (“FTC”), in consultation with the Attorney General, to review ongoing state antitrust investigations into proxy advisors and determine whether there is a probable link between the conduct that is at issue in those investigations and violations of federal antitrust law.  Further, the EO directs the FTC Chair to determine whether proxy advisors engage in unfair methods of competition or unfair or deceptive acts or practices.  The review focuses in particular on collusion, undisclosed conflicts of interest, misleading information, conduct that impairs informed investor decision making, or other antitrust violations.

Finally, the EO directs the Secretary of Labor to take steps to revise all regulations and guidance regarding the fiduciary status of individuals who manage, or advise those who manage ERISA (Employee Retirement Income Security Act of 1974) plans, including handling proxy voting and corporate engagement, and to consider whether paid proxy advisors meeting certain criteria should be treated as ERISA investment advice fiduciaries.

The EO underscores the Trump Administration’s continued scrutiny of the role proxy advisory firms play in shaping shareholder voting and engagement at public companies.

Webinar | January 13, 2025
8:00 a.m. – 9:00 a.m. EST
Register here.

During this session, Mayer Brown panelists will discuss US SEC disclosure priorities and other recent developments for foreign private issuers (FPIs) that should be priorities as they draft their annual reports. Topics will include:

  • Financial reporting issues, including non-GAAP/non-IFRS disclosures
  • Policy shifts under the current administration, including shareholder engagement, climate, and areas of likely SEC focus in 2026
  • Considerations related to risk factor disclosures, including tariffs, inflation, and geopolitical conflicts
  • Artificial Intelligence and cybersecurity disclosure trends
  • Cybersecurity and climate change disclosure trends
  • China-related matters, including the HFCAA

In November 2025, ISS Governance (“ISS”) announced its global Benchmark Proxy Voting Guidelines for shareholder meetings with dates on or after February 1, 2026.  Consistent with prior years, the 2026 updates were derived from extensive outreach to institutional investors, companies and other affiliated organizations.  According to ISS, its proxy voting guidelines “are guided by the four tenets of ISS’ Global Voting Principles on accountability, stewardship, independence and transparency” and consider input from stakeholders on topics such as “corporate governance standards and practices, shareholder rights, board elections, executive compensation, shareholder proposals, board governance and risk management.”  Significant changes to U.S. policy recommendations in 2026 include the following:

Policy AreaPolicy Change/Update
Problematic Capital Structures – Unequal Voting RightsGenerally vote withhold or against directors individually, committee members, or the entire board for companies with multi-class capital structure with unequal voting rights; i.e., unequal voting rights are problematic regardless of whether superior voting shares are classified as “common” or “preferred.”
Exceptions are expanded to include:
– Convertible preferred shares that vote on an “as-converted” basis
– Situations where enhanced voting rights are limited in duration and applicability, such as to overcome low voting turnout and ensure approval of a specific non-controversial agenda item and “mirrored voting” applies
Vote against proposals to create a new class of preferred stock with voting rights superior to the common stock, subject to certain exceptions.
Long-Term Alignment in Pay-for-Performance EvaluationISS’s pay-for-performance analysis will assess pay for performance alignment over a longer-term time horizons, as follows:
– The degree of alignment between a company’s annualized “total shareholder return” rank and the CEO’s annualized total pay rank within a peer group, and the rankings of CEO total pay and company financial performance within a peer group, will be measured over a five-year period; and
– the multiple of the CEO’s total pay relative to peer group median will be measured over one- and three-year periods.
By way of background, ISS peer groups are generally comprised of 14-24 companies that are selected using factors such as market cap, revenue, assets, Global Industry Classification Standard (“GISC”) industry group, and the company’s selected peers’ GICS industry group.
Time-Based Equity Awards with Long-Term Time HorizonUpdate to reflect the importance of longer-term time horizons for time-based equity awards; provides a flexible approach in evaluating the equity pay mix in qualitative pay-for performance reviews.
Compensation Committee ResponsivenessStreamlines policy language by cross-references the factors listed under Company Responsiveness (below).
Company ResponsivenessThese updated factors, now also referenced with regard to Compensation Committee responsiveness, create flexibility for companies to demonstrate responsiveness to low say-on-pay support, especially following February 2025 guidance from the U.S. Securities and Exchange Commission on Schedule 13G vs. 13D filing (read more here).
When (i) a previous say-on-pay vote received less than 70% support and (ii) the company subsequently discloses meaningful engagement efforts but also states that it was unable to obtain specific feedback, ISS will assess the company’s actions as well as why the company says that such actions are beneficial for shareholders, including the following new factors:
– Significant corporate activity, such as a recent merger or proxy contest; and
– Any other compensation action or factor considered relevant to assessing responsiveness.
Less than 50% support for a say-on-pay vote warrants the highest degree of responsiveness under the factors noted above.
Vote case-by-case on Compensation Committee members (or, in exceptional cases, the full board) if an advisory vote on executive compensation is implemented on a less frequent basis than the frequency that received the plurality of votes.
High Non-Employee Director PayUpdates previous policy regarding high non-employee director pay practices by allowing for adverse recommendations (i) when a pattern emerges across two or more consecutive or non-consecutive years and (ii) in the first year if pay issues are egregiously problematic, without disclosure of any “compelling rationale or other mitigating factors.”
Compensation is defined expansively to include performance awards, retirement benefits and perquisites.
Enhancements to Equity Plan Scorecard (“EPSC”)By way of background, ISS’s EPSC evaluates equity incentive plan proposals using positive and negative factors.  These factors are grouped under three “pillars”: Plan Cost, Plan Features, and Grant Practices, which are weighted and scored; generally, a total EPSC score determines whether ISS provides a “For” or “Against” recommendation.
The EPSC will now assess whether plans that include nonemployee directors disclose cash-denominated award limits (this was previously informational only and not scored).  In addition, there is a new negative overriding factor for plans that lack sufficient positive features under the “pillars” above, even though the plan overall receives a passing score.
Global Approach: E&S Shareholder ProposalsGlobally, ISS evaluates social and environmental shareholder proposals addressing topics such as consumer and product safety, environment and energy, labor standards and human rights, workplace and board diversity, and political issues.  Now, in addition to existing factors, ISS will consider if a proposal addresses substantive matters that may impact shareholder’ interests, including impacts on shareholders’ rights. 
U.S. Only: E&S Shareholder Proposals    Based on the decline in shareholder support for the types of E&S shareholder proposals discussed below and on the increasing variation of regulations, as well as recent improvements in disclosure, recommendations are updated from a “vote for” to a “case-by-case” approach for proposals regarding:
– Climate change/greenhouse gas emission;
– Diversity/equality of opportunity;
– Human rights; and
– Political contributions (note that the decline in shareholder support for related proposals was not a factor with regard to these proposals).

Read ISS’s Proxy Voting Guidelines Benchmark Policy Changes for 2026: U.S., Brazil Canada, and Americas Regional here.

Webinar | December 10, 2025
12:00 p.m. – 1:00 p.m. EST
Register here.

The proxy and annual reporting season may seem a long way off. However, in light of the amount of work and planning that goes into the proxy statement, annual report, and annual meeting of shareholders, this is the ideal time to begin preparations. Join this Intelligize session as speakers from Mayer Brown, Georgeson and Veralto discuss key issues companies should consider while preparing for the upcoming 2026 proxy and annual report season, including:

  • Recent proxy statement and annual report developments
  • Considerations for risk factor disclosures
  • Cybersecurity, artificial intelligence, and climate change disclosure trends
  • Proxy voting matters and trends in shareholder proposals
  • Environmental and social matters, and more

Read our Legal Update: 2026 U.S. Annual Report and Proxy Season: It’s Go Time! for an overview of key issues companies should consider as they address their annual report and proxy disclosure requirements.

The John L. Weinberg Center for Corporate Governance, in coalition with several major industry organizations, seeks to gather practical insights from companies, investors, and related professionals about the scope and effectiveness of the current federal shareholder proposal rule (Rule 14a-8) through a new survey.

Recent remarks from the Chairman of the U.S. Securities and Exchange Commission (the “SEC”) at the Weinberg Center indicate that aspects of Rule 14a-8 may be reconsidered, including possible changes in how federal and state roles are defined. Recent statements from the SEC’s Division of Corporation Finance suggest that this topic is likely to be an area of continued focus.

All responses will be kept confidential and reported only in aggregate form. Findings from this survey will inform a public report and related programs convened by the Weinberg Center and the University of Delaware’s Institute for Public Administration through their joint venture, The Corporate Collaborative @ UD.

The survey will be open until December 24, 2025, and is designed to take less than 15-20 minutes. Take the survey.

The Weinberg Center is grateful to the coalition of partnering organizations, including Council of Institutional Investors, Manual of Ideas, Nareit, National Association of Corporate Directors, National Association of Manufacturers, Shareholder Rights Group, Society for Corporate Governance, U.S. Chamber of Commerce Center for Capital Markets Competitiveness, and others, for their contributions to this survey.

Guest post by The Society for Corporate Governance

For decades, corporate boards have wrestled with the role of proxy advisory firms—trying to understand their recommendations, spending more time on shareholder engagement, and, from time to time, questioning the focus of advisory firms on particular issues.  This article, published in Directors & Boards, analyzes the role and influence of proxy advisory firms and suggests a constructive way in which public companies, both individually and collectively, can address this subject.

Read more: The Impact and Influence of Proxy Advisory Firms.

Although it may seem early, it is already time to start preparing for the 2026 annual report and proxy season.  While many disclosure requirements remain consistent from prior years, there has been a significant shift in the focus of, and discourse relating to, the priorities of the Securities and Exchange Commission.  Practitioners started to see the impact of these developments over the past year, and these developments are likely to have an even more significant impact on disclosure and governance practices during the 2026 season.

This Legal Update provides an overview of key issues companies should consider as they address their annual report and proxy disclosure requirements.  

On November 17, 2025, the Staff of the Securities and Exchange Commission’s (the “SEC”) Division of Corporation Finance published a new statement (the “Statement”) regarding the review of requests to exclude shareholder proposals by both the Division of Corporation Finance and the Division of Investment Management (together, the “Divisions”) during the 2026 proxy season (including no action requests received by the Divisions prior to October 1, 2025 and to which the Divisions had not responded as of November 17).  Specifically, due to a shortage of resources following the recently-ended government shutdown in combination with the “extensive volume” of Staff guidance regarding shareholder proposals, the Divisions will not respond to or express views on requests to exclude shareholder proposals other than requests under Rule 14a-8(i)(1) of the Securities Exchange Act of 1934, as amended. The Staff’s approach represents a dramatic departure from past proxy seasons. 

Further, the Divisions’ decision to continue to review requests to exclude proposals under Rule 14a-8(i)(1) appears temporary, based on “uncertainty in the application of state law and Rule 14a-8(i)(1) to precatory proposals,” such that these reviews may stop when “there is sufficient guidance available to assist companies and proponents in their decision-making process.” 

By way of background, Rule 14a-8(i)(1) permits a company to exclude a proposal that is not a “proper subject” for shareholder action under state law, which raises a question as to whether precatory, or non-binding, shareholder proposals are, indeed, “proper subjects.”   In October, SEC Chairman Paul Atkins questioned whether Rule 14a-8(i)(1) actually permits companies to exclude precatory shareholder proposals as not being proper subjects, and concluded that this is likely the case, at least with regard to Delaware companies (read more here).  Chair Atkins also suggested that a company could, on advice of counsel that a proposal is not a “proper subject” under state law, seek to rely on Rule 14a-8(i)(1) to exclude the proposal, expressing his “high confidence” that the SEC Staff would “honor” this position, at least with regard to that specific company.  Further, should a conflict with a proposal proponent arise, Chair Atkins raised an open question as to whether the SEC would take the issue to the Delaware Supreme Court (perhaps leading to the “sufficient guidance” referenced in the Statement).

In addition, the Statement reminded companies of the notice requirement in Rule 14a-8(j), under which companies that intend to exclude shareholder proposals from their proxy materials must provide timely notice (no later than 80 calendar days before filing a definitive proxy statement) to both the SEC and proponents. While this notice is still required, the Statement noted that it is informational only, and that there is no requirement that companies seek the Staff’s views regarding their intended exclusion of a proposal, and no response from the Staff is required.  However, if a company that provides notice wishes to receive a response from the Divisions for any proposal that it intends to exclude pursuant to a basis other than Rule 14a-8(i)(1), the company or its counsel must include “an unqualified representation that the company has a reasonable basis to exclude the proposal based on the provisions of Rule 14a-8, prior published guidance, and/or judicial decisions.” The relevant Division will respond with a statement that, based solely on the aforementioned opinion, it will not object if the company omits the proposal from its proxy materials. No substantive views or opinions will be expressed.

Commissioner Crenshaw’s Response

In a fiery response, Commissioner Caroline Crenshaw described the Statement as an “act of hostility toward shareholders.”  In her view, by not expressing substantive views on requests to exclude certain proposals, but still responding with a letter “indicating that, based solely on the company’s or counsel’s representation, the Division will not object if the company omits the proposal from its proxy materials,” the Division is indirectly blessing the company or its counsel’s views, even where the Division might have disagreed had it substantively analyzed these views.  In her words, “[t]oday’s missive will give the false impression that the Division is ‘not objecting’ to a company’s position because it agrees with the grounds of the submission; when in fact the Division is ‘not objecting’ because staff have been ordered to rubber stamp those submissions irrespective of their content.”

Commissioner Crenshaw also addressed the exclusion of no action requests pursuant to Rule 14a-8(i)(1) from the Statement, describing the exclusion as a change in “institutional policy” rather than law.  She described Chair Atkins speech, detailed above, as “leav[ing] the uncanny impression that the Commission is now anointing itself the newest Vice Chancellor on the Delaware Court of Chancery, effectively creating new state law (which it can then itself bless), to carry out an agenda that affords companies sweeping rights to reject shareholder proposals without impediment or regard for precedent.” 

In sum, the potential magnitude of this change to the shareholder proposal process cannot be understated, and practitioners and companies will need to carefully consider how the new guidance impacts their actions in the 2026 proxy season.

Read the Statement here and Commissioner Crenshaw’s statement here.

Conference | November 18, 2025
Learn more here

Mayer Brown is pleased to sponsor The Character of the Corporation 2025.  This forum brings together public company board members, institutional shareholders, proxy advisors, judicial and governmental representatives and corporate governance thought leaders to discuss effective governance, geopolitical conflict and crisis management.

If you are interested in attending the conference and would like to receive exclusive registration discounts, please email Hanson Hairihan.

10-K and Disclosure TrendsProxy Statement and Annual Meeting Preparation
Webinar | November 10, 2025
12:00 p.m. – 1:00 p.m. EDT
Register here.

The proxy and annual reporting season may seem a long way off. However, in light of the amount of work and planning that goes into the proxy statement, annual report, and annual meeting of shareholders, this is the ideal time to begin preparations. Companies will have to weigh various considerations this upcoming proxy season, including the objectives of new leadership at the U.S. Securities and Exchange Commission.  Join a team of Mayer Brown panelists for a series of two webinars to discuss the key issues for the upcoming 2026 season.

This first session, on November 10, 2025, will focus on considerations for the preparation of annual reports, including disclosure trends, hot topics, and compliance tips. Themes to be discussed include, among others:
– Considerations related to risk factor disclosures
– Artificial intelligence
– Cybersecurity and climate change disclosure trends
– Financial reporting issues, including non-GAAP disclosures, critical accounting estimates, and segment reporting
– Beneficial ownership reporting
– Filer status determinations
– Director and Officer questionnaires		Webinar | November 19, 2025
1:00 p.m. – 2:00 p.m. EDT
Register here.

Join us for the second of two webinars to discuss the key issues for 2026, including the objectives of new leadership at the U.S. Securities and Exchange Commission. During this session, Mayer Brown lawyers Ryan Liebl, Ali Perry, Liz Walsh, and Jennifer Zepralka, as well as Edward Greene, Managing Director, Georgeson Advisory, will discuss the following topics, among others:
– Recent proxy statement developments
– Proxy voting matters and trends in shareholder proposals
– Environmental and social matters
– Shareholder engagement
– Executive compensation disclosures
– Recent SEC guidance relevant to proxy statements and shareholder proposals