Here’s an excerpt from this Cooley Alert penned by Beth Sasfai, Brad Goldberg, Michael Mencher, Vince Flynn, Victoria Peluso, Reid Hooper and Justin Kisner:
“An even earlier look at 2027:
Prospects for Rule 14a-8 repeal
The SEC’s 2026 rulemaking agenda includes a potential proposal addressing Rule 14a-8, and many observers have speculated that the SEC may seek to rescind the rule entirely. Any such proposal would be subject to the SEC’s standard rulemaking process, including notice-and-comment procedures. Given Rule 14a-8’s central role in the shareholder proposal landscape, a rescission proposal would likely generate a substantial volume of public comments (e.g., investor groups are already petitioning to keep Rule 14a-8 in place), requiring meaningful consideration by the SEC before adoption of a final rule.
Recent SEC rulemakings have frequently taken more than a year to progress from proposal to adoption, suggesting that one or more proxy seasons could continue under the SEC staff’s current no-action policy before any rescission could become effective. In addition, a rescission of Rule 14a-8 would almost certainly face legal challenges, which could result in injunctive relief or a voluntary SEC stay (as occurred with the SEC’s 2024 climate rules). Consequently, uncertainty surrounding the future of Rule 14a-8 could persist past the 2028 presidential election.
2027 shareholder proposal landscape
Regardless of the timing of any SEC rulemaking, the prospect of a Rule 14a-8 rescission is likely to influence the 2027 proxy season. An imminent or pending rescission proposal may create a highly contentious “last chance” environment in which proponents seek to maximize leverage while the SEC staff’s current no-action policy remains in effect. One potential consequence may be proponents submitting precatory or binding bylaw proposals designed to provide shareholders with proposal access rights independent of Rule 14a-8.
The 2027 season could be further complicated if the SEC staff maintains its current no-action policy. Under that scenario, companies may have reduced leverage in negotiations with proponents, particularly given proponents’ demonstrated willingness during the 2026 season to use litigation as a means of challenging proposal exclusions.
Faced with elevated proposal volumes and heightened litigation risk, some companies may conclude in 2027 that allowing a greater number of proposals to proceed to a vote presents the lower-risk path, particularly on E&S topics, where shareholder and proxy advisor support continues to erode. That calculus may differ, however, for proposals addressing more consequential matters, such as binding bylaw amendments, or proposals with a greater likelihood of attracting substantial shareholder support.
To date, no company has taken up Atkins’ invitation to seek exclusion of a shareholder proposal on state law grounds under Rule 14a-8(i)(1). As the shareholder proposal landscape continues to evolve, however, some companies may become more willing to explore that avenue during the 2027 proxy season.
Evolution of proponent tactics
Even in the absence of further SEC staff policy changes, shareholder proponents continue to experiment with new ways to pressure companies to advance their objectives. Facing headwinds from the SEC staff’s current no-action policy, declining levels of shareholder support for certain proposal categories and the prospect of a future rescission of Rule 14a-8, proponents have continued to test innovative strategies in 2026, many of which may provide insight into how proponents could seek to maintain influence in a world where Rule 14a-8 plays a diminished role or has been repealed. These strategies include:
- Litigation challenging proposal exclusions.
- Running or threatening Rule 14a-4 “zero slate” campaigns where multiple shareholder proposals are submitted on the proponent’s universal proxy card while sidestepping the parameters of Rule 14a-8 (see, e.g., BJ’s Wholesale Club and Nexstar Media Group in 2026, following a strategy similar to that employed at Warrior Met Coal, as discussed in our 2024 shareholder proposal alert).
- Withhold campaigns targeting directors, threatening to make director elections an alternative forum for E&S and governance activism.
- Public campaigns criticizing companies that exclude proposals or are perceived as insufficiently responsive to shareholder concerns.
- Binding bylaw amendment proposals submitted pursuant to Rule 14a-8 or through independent solicitation efforts.
The 2026 proxy season has been characterized by significant policy changes, strategic experimentation and legal uncertainty, and those dynamics are likely to persist into 2027. The practical effects of SEC skepticism toward shareholder proposals and E&S activism, political and regulatory scrutiny of proxy advisors, and declining support for certain categories of E&S proposals may be offset, at least in part, by evolving proponent strategies and continued uncertainty regarding the future of Rule 14a-8.
In this environment, companies should prepare for a range of potential outcomes. Boards and management teams may benefit from ongoing education regarding developments in the shareholder proposal landscape, proactive engagement with shareholders and other key stakeholders, and periodic reassessments of governance and disclosure practices in light of evolving investor expectations and regulatory developments.”
Authored by
Broc Romanek