SEC Withdraws Proposed Amendments to Shareholder Proposal Rule

On June 12, 2025, the Securities and Exchange Commission (“SEC”) issued a notice formally withdrawing proposed rule amendments to Exchange Act Rule 14a-8, the shareholder proposal rule, which requires companies subject to the federal proxy rules to include shareholder proposals in their proxy statements, subject to certain procedural and substantive requirements. The proposed rule titled “Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8,” which was published in 2022, proposed to revise three substantive bases for excluding shareholder proposals – the substantial implementation, duplication and resubmission exclusions. The SEC announced it does not intend to issue a final rule with respect to the proposed rule amendments, and that if the SEC decides to pursue future regulatory action on the subject, it will issue a new proposed rule.

On June 26, 2025, the SEC will host a roundtable discussion with panelists from public companies, compensation consultants and law firms on executive compensation. The first panel will focus on how public companies set compensation for their executive officers and how investors consider executive compensation in making investment and voting decisions. The second and third panels will focus on the evolution of executive compensation disclosure requirements and discuss whether the rules have achieved their policy objectives, challenges in disclosure preparation, what disclosure is material to investors and what future disclosure requirements should be. David Lynn, chair of Goodwin's Public Company Advisory Practice, will participate on the second panel. A link to watch the roundtable discussions will be available on June 26 on the SEC’s website, and a recording will also be available later on the SEC’s website.

On June 9, 2025, the Deputy Attorney General of the U.S. Department of Justice sent a memorandum outlining Guidelines for Investigations and Enforcement of the FCPA (“Guidelines”). The memorandum notes that the Guidelines have the goals of (i) limiting undue burdens on American companies operating abroad and (ii) conducting enforcement actions that are targeted against conduct that directly undermines U.S. national interests. The memorandum indicates prosecutors should focus on individuals engaged in criminal activities and not attribute nonspecific malfeasance to corporate structures; proceed as expeditiously as possible in their investigations; and consider collateral consequences, such as potential disruption to lawful business and the impact on company employees, throughout an investigation. Going forward, in determining whether to pursue an FCPA investigation or enforcement action, prosecutors are to consider several strategic factors, including but not limited to, factors that support the goals of (i) the total elimination of cartels and transnational criminal organizations; (ii) safeguarding fair opportunities for U.S. companies; (iii) advancing U.S. national security; and (iv) prioritizing investigations of serious misconduct. All new FCPA investigations or enforcement actions must be authorized by the Assistant Attorney General for the Criminal Division or a more senior official.

Texas Senate Bill No. 2337, which regulates proxy advisory firms, was signed in the Texas State Senate on June 1, 2025 and in the Texas House of Representatives on June 2, 2025 and was sent to Governor Greg Abbott to sign or veto the bill before June 22, 2025. If the Governor signs the bill or opts not to veto it, the bill will be effective on September 1, 2025. The bill would mandate disclosures when proxy advisory firms recommend casting a vote for “non-financial reasons” or provide conflicting advice to multiple clients. The “non-financial” reasons include a recommendation wholly or partly based on environmental, social or governance investing, diversity, equity or inclusion, social credit or sustainability scores or membership in or commitment to an organization or group that bases its assessment of a company’s value on nonfinancial factors. Proxy advisory firms would be required to include a notice with the recommendation that the recommendation is not being provided solely in the financial interest of the company’s shareholders because it is based on one or more nonfinancial factors, explain the basis of the recommendation and immediately provide a copy of the notice to the relevant company. Proxy advisory firms are also required to conspicuously disclose on the home or front page of their website that their services include advice and recommendations that are not based solely on the financial interest of shareholders. The bill would also require proxy advisors, if they provide clients who have not expressly requested services for a nonfinancial purpose either advice or a recommendation on how to vote on a proposal that is materially different from that provided to other clients, to (i) provide additional disclosure, (ii) notify each client, the relevant company and the Texas attorney general, and (iii) disclose which of the conflicting advice or recommendations is provided solely in the financial interest of shareholders and supported by specific financial analysis.

On June 16, 2025, the SEC issued an updated Volume II of the EDGAR System Filer Manual that will be effective on September 15, 2025. Among other things, the changes reflect that individual account credentials from Login.gov will be required starting September 15, 2025 to access the EDGAR Filing and Online Forms websites instead of a filer’s CIK and password. In connection with the transition to EDGAR Next, filers are currently able to continue using their CIK and password even though enrollment for EDGAR Next was opened in March 2025. Beginning September 15, 2025, filers will no longer be able simply to use only their CIK and password in order to file on EDGAR. EDGAR Next enrollment is open through December 19, 2025.