Here’s an excerpt from this Cooley Alert about last week’s Corp Fin statement saying that it won’t respond to no-action requests – at least until September 30, 2026 – unless a company is seeking relief under Rule 14a-8(i)(1)’s “not a proper subject under federal or state law”:
“Although the staff’s new approach ostensibly makes it easier for companies to exclude shareholder proposals under Rule 14a-8, it may ironically result in more proposals in proxy statements this year.
Outside of clear procedural or substantive exclusion bases (e.g., failure to prove ownership or unquestionable substantial implementation arguments), some companies may feel they are now left with no “safe” predictable options. If they exclude proposals from their definitive proxy materials absent a substantive staff no-action letter, they risk that the proponent (especially if it is a well-funded institutional proponent) sues and throws a wrench into their annual meeting process.
Even if they believe they have a basis to exclude a proposal under the new Rule 14a-8(i)(1) state law opinion strategy (discussed herein) and seek a substantive response from the staff, there is risk that the proponent submits a competing opinion and forces the matter to state court. In both scenarios, companies face uncertainty and litigation risks.
Given the declining support for most proposals in recent years, particularly social and environmental proposals, some companies may conclude that it is more prudent to allow proposals to go to a shareholder vote in 2026 and revisit their approach next year once market practice and the regulatory landscape are more settled.”
Authored by
Broc Romanek