SEC Proposes to Eliminate Rule 14a-8 and Modernize the Proxy Process

On September 16, 2026, the U.S. Securities and Exchange Commission (SEC or Commission) proposed sweeping changes to the federal proxy rules that would eliminate Rule 14a-8’s shareholder proposal regime and significantly streamline the mechanics of the proxy process.

Taken together, the proposals could fundamentally change the mechanics of the annual meeting and proxy process, shifting significant aspects of the shareholder proposal process from the SEC to state law and company governing documents while potentially shortening proxy and transaction timelines.

Summary of the Proposals

Rescission of Rule 14a-8

The most consequential of the proposals would rescind Rule 14a-8, the federal shareholder proposal rule, in its entirety, ending the federal framework that for decades has required public companies, subject to specified eligibility, procedural, and substantive requirements, to include qualifying shareholder proposals in their proxy materials.

Rule 14a-8 currently establishes the circumstances under which a company must include a shareholder proposal and supporting statement in its proxy materials. It establishes shareholder eligibility and procedural requirements and 13 substantive bases on which companies may exclude proposals. Under the proposal, that federal regime would disappear. Instead, state law and a company’s charter, bylaws, or other governing documents would determine the role of shareholder proposals and whether a proposal must be included in company proxy materials.

The Commission advances both a statutory and a policy basis for the elimination of Rule 14a-8. As a matter of statutory authority, the proposing release states the Commission’s view that Section 14(a) of the Exchange Act authorizes the SEC to regulate the proxy solicitation process but not to determine the substantive scope of shareholders’ voting and proposal rights under state corporate law. The Commission therefore takes the position that Rule 14a-8, as it has developed over time, exceeds the SEC’s statutory authority. Chairman Paul Atkins’ statement on the proposal specifically rejects the idea of merely revising Rule 14a-8’s thresholds or substantive exclusions, because doing so would continue to involve the SEC in judgments that, in his view, should be made under state law.

The proposing release separately identifies policy reasons for rescission, including the costs associated with the existing process and the ways in which the use of Rule 14a-8 has drifted away from the problem it was originally designed to solve. When adopted in 1942, the rule was intended to ensure that proxy voting did not deprive shareholders of state-law rights they could have exercised had they physically attended the meeting — to present a proper proposal, discuss it, and have fellow shareholders vote on it. Today, the rule is increasingly used as an engagement and negotiating mechanism rather than as a means of obtaining a shareholder vote. Proponents frequently submit proposals to initiate dialogue or obtain concessions from management and then withdraw the proposal before it ever reaches shareholders. The SEC views that as significantly different from the original objective of ensuring that a shareholder's proposal could actually be presented to and voted on by fellow shareholders.

Expansion of Companies’ Discretionary Voting Authority

The SEC proposes to pair the rescission of Rule 14a-8 with significant changes to Rule 14a-4(c), which governs a company’s ability to exercise discretionary voting authority over timely received shareholder proposals submitted outside the Rule 14a-8 process including proposals submitted pursuant to a company’s advance notice bylaws.

Under the current Rule 14a-4(c), if a non–Rule 14a-8 proponent has taken the necessary steps to block the company from having discretionary authority (most notably, distributing proxy materials to the requisite percentage of shares to pass the proposal), the company may find it advantageous to voluntarily include the proposal on its proxy card to solicit votes against it. In the absence of votes on the company’s proxy card, a shareholder proposal could be adopted by the small fraction of shareholders who vote on the proponent’s proxy card. In effect, the current Rule 14a-4(c) functions as a “14a-8 backdoor” that incentivizes a company to voluntarily include a proposal on its proxy card so long as the proponent satisfies the solicitation threshold.

One anticipated effect of the rescission of Rule 14a-8 is that more shareholder proposals may be submitted through the advance notice procedures set forth in a company’s bylaws at shareholder meetings, making the “14a-8 backdoor” of Rule 14a-4(c) significantly more important.

The proposed amendments seek to close this “14a-8 backdoor.” Under the proposed amendments, a company generally could exercise discretionary voting authority over timely received shareholder proposals submitted outside the Rule 14a-8 process as long as the company provides a brief description of the proposal in its proxy statement and discloses how it intends to vote the proxies it receives on that proposal. Unlike under the current Rule 14a-4(c), the proponent could not block the company from having discretionary authority by conducting its own solicitation.

The company proxy card also would need to cross-reference that disclosure and contain a check box by which an individual shareholder can opt out of granting that discretionary authority with respect to their shares. Crucially, if companies elect to use discretionary authority, shareholders could not vote for the shareholder proposal on the Company’s proxy card and instead could only prevent their shares from being voted in line with the company’s discretionary authority.

This change is characterized as providing greater flexibility to companies while giving individual shareholders greater control over whether the company may exercise discretionary authority on their behalf.

Elimination of Required Annual Report Delivery

The SEC has proposed to eliminate the current requirement under Rule 14a-3 that, in connection with an annual meeting at which directors are elected, the proxy statement must be accompanied or preceded by an annual report to shareholders. Accordingly, a company that has already filed its Form 10-K for the most recently completed fiscal year would no longer be required to separately deliver a traditional annual report with the proxy statement but could continue to provide an annual report voluntarily. Any such report, if produced, would continue to be required to be furnished on EDGAR.

Companies with an established practice of producing more elaborate “glossy” annual reports in connection with the distribution of a proxy statement should consider whether the benefits of this practice outweigh the costs to justify continuing the practice voluntarily. 

The proposal also would eliminate the stock performance graph requirement for operating companies, although the requirement would be retained in Form 10-K for specified investment companies.

Elimination of the 20-Business-Day Waiting Period for Incorporation-by-Reference in Proxy Statements

The SEC also proposes eliminating the requirement that a proxy statement be sent to shareholders at least 20 business days before the shareholder meeting when information is incorporated by reference into the proxy statement. Corresponding 20-business-day requirements applicable to Forms S-4 and F-4 would also be eliminated.

This change could be particularly important in mergers and acquisitions (M&A) and other transactions requiring shareholder approval. The Commission notes that the existing requirement was adopted before EDGAR and electronic delivery and can extend transaction timelines even where incorporated documents are readily available electronically. The elimination of the 20-business-day waiting period could permit faster shareholder-vote timelines for registered business combinations, although state law, stock exchange requirements, SEC review of registration statements, notice-and-access delivery timing requirements, and practical solicitation considerations may continue to impose meaningful timing constraints.

Broker Search Period Reduced From 20 Business Days to Five

Rule 14a-13 currently generally requires companies to begin their “broker search” — the process of determining the number of proxy materials required for beneficial owners — at least 20 business days before the record date, although the SEC has already indicated leniency on this deadline in prior guidance.¹

The proposal would reduce that minimum period to five business days. The SEC states that technological changes have significantly accelerated the process and that broker searches can now often be completed in approximately three days.

The change would shorten the lead time required for annual and special meetings and could be particularly useful in M&A transactions, distressed situations, and contested elections where expedited timing is a priority. The proposing release also acknowledges possible consequences for securities lending and shareholder activism, because a shorter period may give investors less advance notice of a record date and less time to recall loaned shares, acquire shares, or coordinate with other investors.

Elimination of Notices of Exempt Solicitation

The SEC proposes rescinding Rule 14a-6(g), eliminating the requirement for certain shareholders beneficially owning more than $5 million of a company’s securities to file written soliciting material used in specified exempt solicitations. This information is currently filed on EDGAR on Form PX14A6G and referred to as a Notice of Exempt Solicitation.

The proposal follows an earlier effort by the SEC staff to address concerns regarding the use of Notices of Exempt Solicitation.  In January 2026, the SEC staff revised its guidance to state that it would object to voluntary Notices of Exempt Solicitation filed by shareholders that did not satisfy Rule 14a-6(g)’s $5 million ownership threshold, reversing the staff’s prior practice of not objecting to such voluntary filings.² In issuing this guidance, the SEC acknowledged that the vast majority of Notices of Exempt Solicitation had become voluntary filings by shareholders below the $5 million threshold and that these filings appeared to be used primarily to generate publicity rather than to serve the original purpose of Rule 14a-6(g) — public notice of exempt solicitations conducted by large shareholders.³

If adopted, shareholders conducting exempt solicitations would remain free to communicate through press releases, third-party platforms, direct communications, and other channels, but EDGAR would no longer function as a centralized repository.

Other Proxy Modernization Changes

The proxy modernization proposal also would require Schedule 14A and Schedule 14C cover pages to identify a representative who can respond to questions or comments concerning the filing, including the representative’s name, address, and telephone number. The proposal contains various conforming and technical amendments as well.

The Shareholder Proposal Process Could Become Fundamentally More Company- and State-Specific

If Rule 14a-8 is rescinded, companies would no longer be operating under a single federal framework specifying eligibility thresholds, procedural requirements and substantive exclusion grounds. The relevant framework instead could vary based on a company’s jurisdiction of incorporation and its governing documents. Additionally, disputes over shareholder proposals would be resolved in state courts or other forums permitted under state law rather than through the traditional practice of SEC staff no-action relief, which the staff already sharply curtailed for the 2025–26 proxy season and has now discontinued.⁴ That transition could present particular challenges in jurisdictions where state law governing precatory shareholder proposals or access to company proxy materials is not well developed. Chairman Atkins expressly connected the proposal to the growing competition among states for corporate incorporations, suggesting that eliminating the federal regime could encourage states to develop their own shareholder-proposal frameworks.

For many companies, this could make the charter and bylaws considerably more important in determining the shareholder proposal process. Companies should therefore review their governing documents, including advance notice provisions, to understand what framework would apply in the absence of Rule 14a-8 and what amendments might be permitted under applicable state law.

If Rule 14a-8 is eliminated, shareholder proponents seeking votes on their proposals may increasingly need to prepare and solicit using their own proxy materials. As a result, proponents may have greater incentive to conduct “zero-slate campaigns” — where a shareholder solicits votes on a proposal in connection with a company’s annual meeting but does not offer alternate director candidates. In such campaigns, the proponent’s proxy card could include the company’s director nominees along with the shareholder’s proposal, allowing a shareholder to vote both for the company’s directors and for the shareholder’s proposal on a single proxy card. The proposed expansion of companies’ discretionary voting authority may therefore present companies with a strategic choice: voluntarily include the shareholder proposal on the company’s own proxy card or rely on the proposed Rule 14a-4(c) framework to exercise discretionary voting authority with respect to the proposal, subject to the ability of individual shareholders to opt out of granting that authority (but not to vote in favor of the proposal). The impact of the use of discretionary voting authority on investor and proxy advisor sentiment should also be considered.

2027 Proxy Season Planning Could Become More Complicated

The timing of any final rules will be particularly important for calendar-year companies preparing for the 2027 proxy season. Planning for the proxy process and practical mechanics will be well underway in the coming months for calendar-year companies. Additionally, companies ordinarily begin receiving Rule 14a-8 proposals months before annual meetings, and many advance notice deadlines also fall well before proxy materials are filed. The treatment of Rule 14a-8 proposals for the 2027 proxy season is particularly uncertain. Until final rules are adopted and effective, or other SEC guidance is published, companies should continue to operate under existing Rule 14a-8 requirements and other existing proxy rules.

Anticipated Timing

Both proposals provide for a 60-day comment period following publication in the Federal Register. The proposals were published in the Federal Register on September 21, 2026, with comment deadlines of November 20, 2026.

After the comment periods close, the SEC would need to evaluate comments, determine whether to modify the proposals, and vote on final rules. Accordingly, final rules could be considered in late 2026 or during 2027, with the precise timing and any compliance or transition periods to be determined in the final releases.

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¹In January 2026, the SEC staff published guidance establishing that the staff would not object if a registrant conducted its broker search less than 20 business days before the record date, provided that the registrant reasonably believed that its proxy materials would be timely disseminated to beneficial owners and otherwise comply with Rule 14a-13. See Corporation Finance Interpretation 133.02, issued January 23, 2026.

²See Corporation Finance Interpretation 126.06, issued January 23, 2026.

³See SEC Division of Corporation Finance C&DI 126.06, revised on January 23, 2026, addressing Rule 14a-6(g) Notices of Exempt Solicitation.

⁴Beginning with the 2025–26 proxy season, the SEC staff sharply curtailed its longstanding practice of providing substantive responses to Rule 14a-8 no-action requests, limiting substantive review to requests under Rule 14a-8(i)(1), of which none was submitted. See Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season, Nov. 17, 2025. In August 2026, the staff discontinued responding to Rule 14a-8 no-action requests entirely. See Updated Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process, Aug. 14, 2026.