On November 17, 2025, the Divisions of Corporation Finance and Investment Management (together, the “Divisions”) of the U.S. Securities and Exchange Commission (the “SEC”) published a statement (the “Statement”) regarding their respective reviews of requests to exclude shareholder proposals from annual proxy statements under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, during the 2026 proxy season (read more here).  Specifically, the Divisions stated that they would not respond to or express substantive views on requests to exclude shareholder proposals other than requests under Rule 14a-8(i)(1).  In addition, the Statement provides that, if a company 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.”  As detailed below, we are already seeing the impact on no action requests of this guidance, which is dramatically different from that in effect in the prior proxy season.

  • To date, approximately 54 no action request letters from this proxy season are posted on the SEC’s website.  This includes 17 requests dated between August 17-November 13, 2025, prior to publication of the Statement, that did not request or receive a response from the Divisions, and eight requests dated prior to November 17 that were subsequently withdrawn.  None of the letters includes a request to exclude a shareholder proposal under Rule 14a-8(i)(1).
  • Following the Statement’s publication, five companies that had previously submitted no action requests amended these requests to include the “reasonable basis to exclude” language required to receive a response from the Divisions.
  • All but one of the no action requests submitted after the Statement was published include the “reasonable basis to exclude” language.
  • There are approximately 25 no action requests currently posted on the SEC’s website that include the “reasonable basis to exclude” language.[1]  Seventeen (approx. 70%) of these letters include a variation on the following language, mirroring that suggested in the Statement: “the Company represents without qualification that it has a reasonable basis to exclude the Proposal based on the provisions of Rule 14a-8, prior published guidance and/or judicial decisions.” 
  • The remaining eight letters generally reference the specific prong of Rule 14a-8 on which the company is relying to exclude, for example, “the Company believes it has a reasonable basis to exclude the Proposal pursuant to Rule 14a-8(i)(10).”
  • The average incoming letter length prior to the Statement’s publication was about 11 pages; the average incoming letter length after publication was approximately six pages.  This change likely reflects that incoming letters include less detailed legal and procedural analysis under the new regime, perhaps due to the fact that the Divisions will not express substantive views in response to any such analysis.

Proxy season is just beginning.  We will continue to monitor these issues, as well as other questions that have arisen in response to the Statement, as the season continues—stay tuned for updates on what remains an interesting time for companies, proponents and their counsel.

[1] This includes a few letters that were initially submitted prior to November 17 and later amended to include the “reasonable basis to exclude” language.

Update: The National Defense Authorization Act for Fiscal Year 2026 was signed into law on December 18, 2025.  As a result, the new Section 16(a) reporting requirement for directors and officers of foreign private issuers will take effect on March 18, 2026.  The SEC is still required to enact final rules implementing the amendments.  Issuers and their counsel should prepare to comply with the reporting requirements on March 18, but should stay tuned for SEC guidance, proposed rules and potential exemptive relief.

For those that haven’t had a chance to read the new National Defense Authorization Act for Fiscal Year 2026 that was passed by the US House of Representatives on December 10, 2025, the $900 billion spending package includes more than the typical items you would expect to see in the annual defense spending bill.  The bill is now on its way to the Senate.

Starting on page 2,718 of the bill, there is a section entitled the “Holding Foreign Insiders Accountable Act.”  Under this section, the bill proposes amendments to the disclosure requirements under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  More specifically, the amendment would add directors or officers of foreign private issuers (“FPIs”) to the list of persons subject to the Section 16(a) disclosure requirements.  It also adds a provision giving the Securities and Exchange Commission (“SEC”) authority to exempt any persons, securities or transactions where a foreign jurisdiction’s laws impose substantially similar requirements, which will be particularly relevant for dual‑listed FPIs.

The bill directs that, not later than 90 days after enactment, the SEC must issue final rules to carry out these amendments.  In practical terms, the earliest these reporting obligations could become effective is Q2 2026, though SEC rulemaking will likely push the effective date to later in 2026.  The SEC’s implementation and any related guidance could also address whether certain home‑country regimes warrant exemptions and whether the Form 20‑F will pick up any new timeliness disclosure requirements around late filings.  The SEC must also, within one year of the bill’s enactment, conduct a study regarding “the transparency and cooperation” of broker-dealers and registered investment advisers controlled by, or organized in, the People’s Republic of China and submit such study to Congress.

Prior to these amendments, FPIs (and directors and officers of FPIs) have been exempt from the reporting requirements under Section 16 of the Exchange Act.  As a reminder, in summary, Section 16(a) requires directors, officers and 10% or greater shareholders of public companies to publicly disclose their direct and indirect ownership of, and transactions in, the company’s equity securities to the SEC using Forms 3, 4, and 5.  The bill does not amend the short swing profit rules under Section 16(b) (which requires disgorgement of profits from buying and selling within six months) or the restrictions in Section 16(c) that prohibit directors, officers and 10% or greater shareholders from engaging in short-sale transactions, so for the time being, insiders of FPIs will remain exempt from Sections 16(b) and 16(c).  See the proposed amendments marked against current Section 16(a).

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.