SEC Proposes to Rescind Rule 14a-8 and Expand Discretionary Voting Authority

Summary

On September 16, 2026, the U.S. Securities and Exchange Commission (SEC) issued a proposing release titled “Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments to Rule 14a-4.” If adopted, the SEC’s proposal would change how shareholder proposals will be considered by public company shareholders.

The SEC proposes to rescind Rule 14a-8 under the Securities Exchange Act of 1934, as amended (Exchange Act), which permits eligible shareholders to require companies to include qualifying proposals in their proxy statements and proxy cards. If the SEC’s proposal is adopted, state law and, where permitted, a company’s charter or bylaws would instead determine how a shareholder proposal would be presented for consideration at a shareholders’ meeting. Rescission of Rule 14a-8 could result in greater reliance on “private ordering” with respect to shareholder proposals, meaning the development of governance arrangements by companies and shareholders under applicable state law, rather than through an SEC-imposed uniform federal shareholder proposal rule. Further, states could seek to enact legislation that addresses the presentation of proposals to shareholders in the absence of the process contemplated by Rule 14a-8. The SEC’s proposed rescission of Rule 14a-8 would apply to operating companies and regulated funds, including registered investment companies and business development companies.

The SEC also proposes to amend Exchange Act Rule 14a-4 so that a company could exercise discretionary authority to vote the proxies it receives on a shareholder proposal to be considered at a shareholders’ meeting, even if the proponent conducts an independent solicitation with respect to that shareholder proposal. Each shareholder could withhold that discretionary authority by checking a box on the proxy card of the company.

The rescission of Rule 14a-8 does not mean an end to shareholder proposals, just an end to relatively easy and costless shareholder proposals. Proponents seeking to advance their proposals at annual meetings will need to comply with company advance-notice requirements and conduct their own solicitations, which will certainly add to the complexity and cost of pursuing a shareholder proposal. The SEC is soliciting comments on the proposal until November 20, 2026. Companies should continue following Rule 14a-8 and their existing shareholder proposal procedures until the SEC acts to adopt amendments that rescind Rule 14a-8.

The principal proposed changes and their practical effects are summarized below.

Summary of Proposed Amendments

Subject	Current rule	Proposed change	Practical effect for companies
Rule 14a-8 proposals included in company proxy materials	Eligible shareholders may require the company to include qualifying proposals in the company’s proxy materials A company includes the proposal in its proxy materials	Rule 14a-8 would be rescinded The inclusion of a shareholder proposal in a company’s proxy materials would depend on state law and, where permitted, a company’s charter or bylaws	Federal proxy rules would no longer require the inclusion of shareholder proposals in a company’s proxy materials, so companies would look to state law and their governing documents to determine whether a proposal must be included
Proposals submitted outside Rule 14a-8	A proponent may present a proposal under state law and the company’s governing documents A proponent generally must conduct its own proxy solicitation to obtain proxy authority; exempt solicitations also remain available	An independent solicitation could become the principal pathway for seeking action on a shareholder proposal if no alternative process for including proposals in company proxy materials applies	Companies could face more independent solicitations, direct engagement with shareholders, and disputes involving advance-notice provisions
Rule 14a-4 discretionary voting authority over proposals omitted from the company’s proxy card	A company may seek authority to vote its proxies on a timely proposal submitted outside Rule 14a-8 A qualifying independent solicitation by the proponent prevents the company from exercising its discretionary authority	A company would be permitted to exercise discretionary authority despite the proponent’s independent solicitation A company’s proxy card would include a shareholder opt-out checkbox	A company could vote those proxies without the opt-out checkbox checked against a shareholder proposal The company’s proxy statement would briefly describe the proposal and how the company intends to exercise its voting discretion
Preliminary proxy statement filings	Rule 14a-8 proposals do not trigger a preliminary proxy statement filing Different requirements apply to proposals submitted outside Rule 14a-8	No preliminary proxy statement filing would be required solely due to inclusion or omission of a proposal A preliminary proxy statement filing generally would be required for a nonexempt solicitation in opposition known or reasonably known to the company	Companies would need to monitor proponent filings and communications when planning their proxy statement filing schedules
Schedule 14C information statements	Item 4 requires disclosure of certain timely received shareholder proposals	Item 4 would be eliminated	Information statements would no longer be required to include the disclosure

Background and Rationale for the Proposal

Rule 14a-8 provides a federal mechanism under which an eligible shareholder may have a qualifying proposal and supporting statement included in a public company’s proxy statement and on the company’s proxy card — unless a basis for exclusion applies. The rule establishes ownership and procedural requirements and provides 13 substantive bases for exclusion. When a proponent includes its shareholder proposal in a company’s proxy statement and on the company’s proxy card pursuant to Rule 14a-8, the proponent generally does not need to conduct a separate proxy solicitation of proxies in support of the proposal.

The SEC’s proposed rescission of Rule 14a-8 has been foreshadowed by recent statements from SEC Chairman Paul Atkins. For example, in July 2026 remarks, Chairman Atkins indicated that the SEC was “holistically evaluating” Rule 14a-8, reiterating concerns about the relationship of Rule 14a-8 with state corporate law that he had expressed as early as 2008. In his statement accompanying the proposal, Chairman Atkins describes limiting federal intrusion into state corporate law and modernizing the proxy rules as “two of my highest regulatory priorities.”

In the proposing release, the SEC indicates that Rule 14a-8 exceeds the SEC’s authority under Section 14(a) of the Exchange Act. In the SEC’s view, Section 14(a) permits the agency to regulate the proxy solicitation process and require disclosure, but not to determine which matters shareholders have a right to present for a vote. Those rights, the SEC indicates in the proposing release, are governed by state law.

The SEC also cites policy concerns in support of the rescission of Rule 14a-8. The proposing release states that Rule 14a-8 imposes costs on companies, allows proponents to use company resources to reach the shareholder base, and increases the negotiating leverage of shareholder proponents. In this regard, the SEC notes that proponents can submit or threaten to submit shareholder proposals and seek corporate commitments in exchange for withdrawing them. The SEC points to the frequency of negotiated withdrawals as an indication that Rule 14a-8 sometimes serves as leverage in private negotiations, rather than as a mechanism for obtaining a shareholder vote on a specific matter.

The proposed rescission of Rule 14a-8 and amendments to Rule 14a-4 are discussed below.

Proposed Rescission of Rule 14a-8

State Law and Company Governing Documents

The SEC proposed to rescind the federal eligibility, procedural, and exclusion standards that are specified in Rule 14a-8.

The proposing release notes that state laws do not currently provide a complete replacement for Rule 14a-8. It is possible that states could adopt laws that would address the ability of proponents to include shareholder proposals in a company’s proxy statement and on a company’s proxy card.

In the absence of Rule 14a-8, an analogous state law, or applicable provisions in a company’s governing documents, a proponent seeking to solicit proxies in support of a shareholder proposal would generally need to prepare and distribute its own proxy materials in accordance with state law and the SEC’s proxy rules.

Proponents could also use exempt solicitations, direct engagement, public campaigns, and social media to obtain support for a shareholder proposal. Although an independent solicitation generally would be more costly than a proposal that is included in a company’s proxy statement pursuant to the current Rule 14a-8 process, electronic delivery and other developments may reduce the cost of some solicitations.

Rescission also could change negotiation dynamics between shareholders seeking to advance proposals and public companies. As the proposing release observes, proponents would lose some of the leverage that comes from requiring a company to distribute a proposal, but they could respond through independent solicitations, binding bylaw proposals where permitted by state law, director-focused campaigns, or efforts to establish company-specific inclusion rights.

Companies could continue to include shareholder proposals voluntarily. A company might decide that inclusion is preferable to litigation, an independent solicitation, a public campaign, or prolonged negotiations. The response may vary based on the particular proposal, the shareholder base of the company, a company’s governance profile, or its historical approach to engagement.

Proposed Amendments to Rule 14a-4

In addition to rescinding Rule 14a-8, the SEC proposes changes to how companies may vote proxies on shareholder proposals to be considered at shareholder meetings.

Current Framework

Today, a shareholder may submit a proposal for consideration at an annual meeting outside Rule 14a-8. The proposal must comply with state law and the company’s governing documents. If the shareholder wants to solicit proxy votes in support of the proposal, the shareholder generally must conduct its own solicitation.

Rule 14a-4 determines when a company may exercise discretionary authority to vote the proxies it receives on a proposal that is not included on the company’s proxy card.

Under current Rule 14a-4(c)(2), a company may seek discretionary voting authority over a timely proposal submitted outside Rule 14a-8. The company must describe the proposal in its proxy statement and disclose how it intends to vote. The company cannot exercise that authority if the proponent satisfies specified requirements. Those requirements include notifying the company of its intent to solicit enough shares to approve the proposal and providing evidence that it completed the solicitation.

Proposed Framework

The SEC proposes to amend Rule 14a-4 so that a company could exercise discretionary voting authority even if the proponent completes the specified independent solicitation. To do so, the company would provide the following:

• A brief description of the proposal in its proxy statement
• Disclosure of how it intends to vote the proxies it receives
• A cross-reference on its proxy card to that disclosure
• A checkbox allowing each shareholder to withhold discretionary authority for its shares

If a shareholder leaves the box unchecked, the company generally could vote that shareholder’s shares on the proposal. If the shareholder checks the box, the company could not do so.

A company could use one checkbox for all proposals subject to discretionary voting authority. It could also provide a separate checkbox for each proposal. The company would control the description of the proposal, subject to Rule 14a-9 (the antifraud rule governing proxy solicitations), and the proponent would not have a right to review or revise it.

The proposed amendments to Rule 14a-4 could be adopted even if the SEC does not rescind Rule 14a-8. If the amendments to Rule 14a-4 are adopted, companies will need to consider how the opt-out checkbox mechanism would affect proxy card design, proxy statement disclosure, and vote tabulation procedures.

Zero-Slate Campaigns

In the proposing release, the SEC addresses the prospect of increased “zero-slate” campaigns. In a zero-slate campaign, a shareholder submits a proposal outside Rule 14a-8, conducts its own solicitation, and places both its proposal and the company’s director nominees on its proxy card. The shareholder does not nominate competing directors.

If the company leaves the shareholder proposal off its own proxy card, an investor that wants to vote on both the proposal and the company’s director nominees may prefer the proponent’s proxy card. That possibility can pressure the company to add the shareholder proposal to its own proxy card.

The proposing release states that the SEC staff observed at least three zero-slate campaigns after the universal proxy rules became effective in 2022. In each case, the company included the proponent’s proposals on its own proxy card. The SEC also identified at least two threatened zero-slate campaigns during the 2026 proxy season.

The proposed Rule 14a-4 amendments are intended to reduce the pressure on companies in these zero-slate campaign situations. Under the proposed amendments, a company could leave the shareholder proposal off of its proxy card but still retain discretionary voting authority over the proxies it receives, except where a shareholder checks the opt-out box.

The SEC acknowledges that the effect of the proposed amendments is uncertain. Proponents may use zero-slate campaigns more frequently after the rescission of Rule 14a-8, or they may turn to exempt solicitations, public campaigns, or informal engagement.

Related Amendments

Preliminary Proxy Statements

Including or omitting a shareholder proposal by itself would not require a company to file preliminary proxy materials under Rule 14a-6(a). A preliminary filing generally would be required if the company knows or reasonably should know that the proposal is subject to an independent, nonexempt solicitation in opposition.

A company may be deemed to know about materials filed or furnished on its EDGAR page or notices delivered under its advance-notice bylaws. Proponents conducting independent solicitations would continue to file their proxy materials in preliminary form.

Information Statements

The SEC proposes to eliminate Item 4 of Schedule 14C. Item 4 currently requires a company distributing an information statement to identify certain timely received shareholder proposals and describe their proposed disposition.

Regulated Funds

The proposed amendments would apply to regulated funds. The proposed amendments would not change voting rights expressly provided by the Investment Company Act of 1940, including rights involving fundamental investment policies, advisory agreements, and certain director elections.

The SEC recognizes that regulated funds present different considerations. They receive fewer shareholder proposals, but proposals reaching a vote have historically received higher support. Funds with diffuse retail ownership also may face distinct proxy solicitation costs and challenges in obtaining sufficient votes. The SEC seeks comment on whether regulated funds should be treated differently. Fund boards and advisers may wish to consider how the proposed rescission could affect their shareholder-proposal and proxy processes while recognizing that existing Investment Company Act voting rights would remain unchanged.

Potential Practical and Economic Effects

The SEC highlights several statistics that illustrate the possible effects of the proposed amendments:

• Shift to Independent Solicitations: From 2022 through 2025, shareholders submitted 3,205 Rule 14a-8 proposals. During the same period, the SEC identified only 69 proxy contests involving an independent solicitation for one or more proposals. Moving even a small percentage of Rule 14a-8 proposals into the independent solicitation channel could increase those contests materially.
• Effect on Individual Proponents: Individuals submitted approximately 45% of identified Rule 14a-8 proposals from 2022 through 2025. The higher cost of an independent solicitation could disproportionately affect individuals and smaller organizations.
• Concentration Among Proponents: Ten proponents submitted 455 proposals in 2025, representing 58% of the 786 proposals identified by the SEC. The effects of rescission therefore may be concentrated among a relatively small number of frequent proponents.
• Potential Cost Savings: The SEC estimates a direct company cost of approximately $49,000 to address a Rule 14a-8 proposal and aggregate annual savings of approximately $39.6 million from rescission.

These estimates do not capture all potential costs. Companies may incur new expenses for state law analysis, litigation, independent solicitations, and the transition to new state or company-specific frameworks.

Litigation and Transition Risk

The SEC proposal could move disputes from the SEC no-action letter process to the courts. Potential issues include whether a proposal is a proper subject for shareholder action, whether a charter or bylaw provision validly creates or restricts the rights of shareholders to advance proposals, whether a proponent complied with advance-notice requirements, and whether the company accurately described a proposal omitted from its proxy card.

The SEC acknowledges that the resulting period of uncertainty could last several years. Its length will depend on how quickly state legislatures, courts, companies, and shareholders develop alternative frameworks.

Selected Requests for Comment

The proposing release contains 49 requests for comment. Selected topics relevant to public companies and regulated funds include the following:

Rule 14a-8 Rescission, State Law, and Transition

• Rescission and Alternatives: Whether Rule 14a-8 should be rescinded in its entirety or replaced with a more limited federal framework
• State Law and Private Ordering: Whether state law adequately addresses shareholder proposals — including precatory proposals — and what state law or company-specific frameworks may develop
• Reliance and Transition: Whether companies and proponents have relied on the existing framework and what transition costs may arise while alternative frameworks develop

Alternative Proposal and Engagement Channels

• Alternative Engagement Methods: Whether proponents would shift to independent or exempt solicitations, direct engagement or public campaigns, and the costs and effectiveness of those alternatives
• Voluntary Inclusion: Whether companies would continue to include some shareholder proposals and what factors would influence those decisions

Rule 14a-4 Voting Mechanics

• Discretionary Voting Authority: Whether companies should be permitted to exercise discretionary voting authority despite a proponent’s independent solicitation and whether the shareholder opt-out appropriately balances the interests involved
• Checkbox Design and Voting Mechanics: Whether the proxy card should include one checkbox or separate checkboxes, how the default should operate, and how instructions across multiple or later-dated proxy cards should be treated
• Description of Proposals: What information a company should provide when describing a proposal not included on its proxy card, including whether it should identify the proponent or provide access to the complete proposal

Regulated Funds

• Fund-Specific Framework: Whether rescission would affect regulated funds differently and whether a separate shareholder proposal framework should apply to them

Actions for Companies to Consider Now

Continue Current Rule 14a-8 Practices

The SEC’s proposal does not change current obligations. Unless and until final rules become effective, companies and proponents must continue to comply with Rule 14a-8, including its procedural requirements, substantive grounds for exclusion, and Rule 14a-8(j) notice requirement.

On August 14, 2026, the staff of the SEC’s Division of Corporation Finance announced that it would no longer respond to Rule 14a-8 no-action requests or issue letters indicating that it would not object to an intended exclusion. Companies must nevertheless continue to submit notices under Rule 14a-8(j), generally no later than 80 calendar days before filing their definitive proxy materials, unless the SEC permits otherwise.

Companies receiving proposals should continue their existing practices for reviewing potential grounds for exclusion, engaging with proponents, documenting their analysis, involving the board or an appropriate board committee, and managing the process against the proxy statement filing and annual meeting calendar.

Account for Litigation Risk

Excluding a proposal can carry litigation risk, particularly without an SEC staff no-action response. During the 2026 proxy season, proponents brought litigation challenging exclusion of shareholder proposals by companies, with outcomes including settlements, injunctive relief requiring inclusion, and denials of preliminary relief.

A proponent may seek expedited relief shortly before proxy materials are scheduled to be filed or mailed. Early analysis and engagement can give a company more time to decide whether to include the proposal, exclude it, or negotiate its withdrawal.

Review Governing Documents and State Law Developments

Although uncertainty about the final rules and potential state law developments may lead many companies to defer bylaw changes, companies should begin assessing how their existing governing documents would operate if Rule 14a-8 were to be eliminated.

The review should include advance-notice provisions, requirements governing proposals presented at shareholder meetings outside Rule 14a-8, informational and procedural requirements for proponents, and other provisions governing shareholder meetings. Companies also should be prepared for proponents to advocate for companies to adopt new bylaw provisions establishing company-specific proposal inclusion rights. Depending on the existing provisions of a company’s governing documents, jurisdiction, shareholder profile, and annual meeting calendar, some companies may decide that targeted amendments are appropriate, while others may wait for greater regulatory and state law clarity.

Monitor the Rulemaking and Consider Commenting

Companies with substantial experience responding to shareholder proposals may wish to comment on the proposal. The SEC is seeking information about proposal-related costs, independent solicitations, alternative forms of shareholder engagement, and the expected transition to state law and company-specific frameworks.

Companies also should monitor the final terms and effective date of any adopted amendments, as well as developments under applicable state law.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.