SEC Proposes to Rescind Rule 14a-8 and Modernize Proxy Solicitation Process

On September 16, 2026, the U.S. Securities and Exchange Commission's (SEC or Commission) proposed to rescind Rule 14a-8, amend Rule 14a-4(c) and, in a second release, modernize the Proxy Solicitation Process. The proposed rulemakings represent a significant shift in the proxy and shareholder proposal processes – effectively returning shareholder proposal governance to state law, placing greater importance on company bylaws and shifting the burden to management to determine whether to submit shareholder proposals to an annual meeting. These proposed changes may trigger efforts by stakeholders and advisory groups to seek changes to state corporation laws to facilitate shareholder proposals, as well as press public companies to amend their bylaws to permit shareholder proposal rules and restrict boards' discretionary proxy voting authority. State law changes in reaction to these federal changes may also influence corporate migrations to states perceived as having more "management friendly" corporate laws.  

The proposals reflect what SEC Chairman Paul S. Atkins described as two of his "highest regulatory priorities": "[f]irst, ensuring that the Commission does not improperly intrude into state corporate law when applying the federal securities laws" and "[s]econd, updating the Commission's rules to reflect developments in market practice and technology, and other innovations, since the rules' adoption or last amendment."

This Holland & Knight alert analyzes the key provisions of both proposals and discusses their practical implications for public companies and their shareholders.

Background: Rule 14a-8 and the Shareholder Proposal Process

Rule 14a-8 has been part of the federal securities regulatory framework under the Exchange Act since 1942 and addresses the circumstances under which companies must include shareholder proposals in their proxy materials.¹ When the rule was first adopted, shareholder proposals were a rarity – only 66 proposals were submitted in 1943. Since then, shareholder proposal activity has increased substantially. The Commission estimates that approximately 781 shareholder proposals were submitted in 2025, with 462 voted on at shareholder meetings.² Over the period from 2022 to 2025, 502 unique lead proponents submitted shareholder proposals; individual proponents accounted for approximately 45 percent of proposals during that period, rising to 53 percent in 2025.³

The rule has been amended numerous times over the decades, most recently in 2020, when the Commission revised ownership and resubmission thresholds. Under Rule 14a-8, the SEC's Division of Corporation Finance historically issued no-action letters guiding companies on whether particular shareholder proposals could be excluded from proxy materials. After a partial discontinuation in 2025, however, the Division completely discontinued that practice in August 2026 – developments that had already begun to shift the shareholder proposal landscape prior to these proposals.⁴

Rescission of Rule 14a-8

Legal Authority: At the heart of the proposed rescission is the Commission's conclusion that Rule 14a-8 exceeds its statutory authority under Section 14(a) of the Exchange Act. The proposing release notes that Section 14(a) authorizes the Commission to regulate the proxy solicitation process (i.e., to regulate the disclosure provided to shareholders in connection with proxy voting) but, according to the release, does not authorize the Commission to determine substantively which matters shareholders may vote on at a meeting. The Commission distinguished between regulating proxy disclosure (within its statutory authority) and regulating corporate governance decisions about the proper subjects for shareholder votes (a matter of state law).

Independent Policy Reasons for Rescission: Beyond the legal authority arguments, the Commission identified several independent policy reasons supporting rescission. Specifically, the Commission noted that:

• Many of the original justifications for Rule 14a-8 have not been substantiated over the rule's 84-year history or are arguably less compelling today than when the Rule was adopted.
• The rule has become a mechanism for influencing company-shareholder interactions in ways inconsistent with its original purpose as a proxy disclosure regulation.
• The existence of the federal rule places the Commission in the position of making judgments about matters that should be governed by state corporate law, including determinations about what constitutes "ordinary business" and what are "proper subjects" for shareholder action.
• The federal rule has inhibited the development of state law and private ordering with respect to shareholder proposals, effectively supplanting state authority in this area.

Post-Rescission Landscape: If adopted, the rescission would return the question of whether and how shareholder proposals are included in proxy materials to the states, companies and their governing documents. In practical terms, this would mean that the ability of shareholders to present proposals at annual meetings would largely be governed by the advance notice provisions of the relevant issuer's bylaws and applicable state law. Moreover, without Rule 14a-8, shareholders would be relegated to conducting their own proxy solicitation in order to present and advocate for a proposal, an undertaking that would be far more costly and require far greater shareholder effort than the current Rule 14a-8 process.

It is also conceivable, however, that the retirement of Rule 14a-8 could cause shareholders to increase activist and engagement efforts to compensate for the loss of the ability directly to disseminate proposals under the rule. Moreover, public companies could face increased pressure to adopt some form of bylaws-based replacement for Rule 14a-8, and state lawmakers could codify state law versions of Rule 14a-8 or adopt even more stringent protections for shareholder proposals. Thus, the recission of Rule 14a-8 could lead to a more fragmented legal landscape with respect to shareholder proposals and proxy solicitation rules, which could trigger an exodus of public companies from states with rules friendlier to shareholder proposals, as boards seek to reincorporate in states that provide greater deference to companies and their boards.

Amendments to Rule 14a-4(c): Discretionary Voting Authority

As part of the same release, the Commission proposed amendments to Rule 14a-4(c), which governs the circumstances under which a company may exercise discretionary proxy voting authority on proposals that are presented at a shareholder meeting but not included in the company's proxy materials.

Current Framework: Under the current Rule 14a-4(c), companies have limited ability to exercise discretionary voting authority on proposals not included in proxy materials. Under Rule 14a-4(c)(2), a shareholder proponent can prevent a company from exercising discretionary authority by soliciting holders of the requisite percentage of shares required under applicable law to carry the proposal. Other shareholders currently have no mechanism to opt out of a company's exercise of such discretionary authority.

Proposed Changes: If adopted, the proposed amendments would expand the circumstances under which a company may exercise discretionary voting authority on proposals received outside of Rule 14a-8 that are presented at a meeting but not included in the company's proxy materials. Under the proposed amendments to Rule 14a-4(c)(2), a company exercising discretionary voting authority would be required to:

• include in the proxy statement a brief description of the matter and how the company intends to exercise its discretion
• include a cross-reference on the proxy card directing shareholders to the proxy statement disclosure
• provide a checkbox on the proxy card that allows shareholders to opt out of granting discretionary voting authority to the company with respect to such proposals

The checkbox feature is particularly noteworthy, as it gives individual shareholders a direct mechanism to retain control over their votes on matters not included in the proxy card – an option that does not exist under the current rules.

The proposed amendments also would clarify Rule 14a-4(c)(1) to provide that a company's advance notice bylaw provisions or applicable state law provisions would generally determine whether a shareholder proposal is timely. The current default 45-day deadline would apply only in the absence of such company or state law provisions.⁵

Importantly, the proposed amendments to Rule 14a-4(c) are independent of the proposed rescission of Rule 14a-8. As Chairman Atkins noted, however, if the Commission ultimately rescinds Rule 14a-8, shareholders may be more likely to file their own proxy materials to solicit votes for their proposals, making this proposed recalibration of discretionary proxy authority particularly relevant.

Proxy Solicitation Modernization

In a separate release, the Commission proposed amendments to modernize four proxy solicitation rules and add a new contact information requirement. The Commission noted that many of these rules were adopted decades ago and have become outdated in light of technological advancements and changes in shareholder communications.⁶

Elimination of the Annual Report to Security Holders Requirement: The Commission proposed to eliminate the requirement in Rule 14a-3 that a company with a Form 10-K on file must deliver a separate "annual report to security holders" (ARS). As Chairman Atkins explained, "shareholders receive essentially the same information from both the annual report required by Rule 14a-3 and the Form 10-K." The proposal would also eliminate the stock performance graph requirement for all companies other than registered investment companies. Although for many companies the ARS is merely a "wrap" of the Form 10-K with the addition of a few extra pages (e.g., glossy annual report information and some additional investor relations messages such as a letter from the CEO and/or the Chairman), eliminating the ARS requirement would generally reduce public companies' compliance and cost burden with respect to proxy materials, especially for companies electing not to take advantage of electronic-only delivery of proxy materials under the recently proposed Regulation E-Delivery, which was announced by the Commission on July 21, 2026.

Elimination of the Incorporation-by-Reference Delivery Deadline: The proposal would eliminate the requirement in Schedule 14A and Forms S-4 and F-4 that proxy statements or prospectuses incorporating information by reference be sent to shareholders at least 20 business days before a shareholder meeting. This requirement predates companies filing on the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. Today, shareholders can quickly and efficiently access incorporated documents on EDGAR, rendering the 20-business-day waiting period unnecessary.⁷ The elimination of this requirement would provide companies greater flexibility in planning all shareholder meetings but should be particularly helpful in conducting special shareholder meetings to approve business combination transactions and other material transactions where time may be of the essence.⁸

Elimination of the Notice of Exempt Solicitation: The Commission proposed to rescind Rule 14a-6(g), which requires shareholders owning more than $5 million of a company's securities to submit a Notice of Exempt Solicitation on EDGAR. The Commission found that the vast majority of these notices in recent years have been filed voluntarily by shareholders below the filing threshold – approximately 80 percent of notices submitted in 2025 were voluntary filings.⁹

Shortening the Minimum Broker Search Period: The proposal would reduce the time frame in Rule 14a-13 for initiating a broker search from 20 business days to five business days before the record date for a shareholder meeting. The current 20-business-day time frame was adopted in 1983 and, as Chairman Atkins noted, "has become outdated with technological advancements." Broker searches can now generally be completed in as few as three days, making the existing 20-business-day requirement substantially longer than necessary.

Contact Information on Proxy Statements. The proposal would require that contact information for a representative be included on Schedule 14A and Schedule 14C cover pages, providing shareholders a readily accessible point of contact in connection with proxy solicitations.¹⁰

Looking Ahead

If adopted, these proposals would fundamentally reshape the shareholder proposal landscape. Issuers and shareholder proponents alike should consider the following action items:

• Submit Comments. Both releases provide for a 60-day comment period after publication in the Federal Register. Affected stakeholders should consider commenting on whether there are additional reforms to the proxy process that the SEC should consider.
• Review and Update Governing Documents. If Rule 14a-8 is rescinded, advance notice bylaw provisions will become the primary gating mechanism for shareholder proposals. Issuers should review and, where appropriate, update their advance notice bylaws to establish clear procedural and informational requirements for shareholder submissions. Under the proposed clarification to Rule 14a-4(c)(1), company advance notice provisions or state law provisions would generally determine the timeliness of proposals for purposes of discretionary voting authority.
• Monitor State Legislative Developments. With shareholder proposal frameworks shifting to state law, issuers and proponents should monitor legislative activity in their states of incorporation. Chairman Atkins observed that "[a]s we experience an exciting period of increased competition among states for corporate domicile, there is no better time for the Commission to recognize the limits of its authority."
• Evaluate Shareholder Engagement Strategies. If Rule 14a-8 is rescinded, shareholders may seek more aggressive paths to getting proposals in front of shareholder meetings. This may make engagement with and outreach to key shareholders and stakeholders even more critical. Public companies should review the extent and cadence of their engagement strategies to maximize the effectiveness of their efforts.
• Capture Proxy Process Efficiencies. If the modernization proposals are adopted, issuers should work with their proxy solicitors and outside counsel to update proxy season timelines and procedures. Key efficiencies include the elimination of the separate ARS delivery requirement, removal of the 20-business-day waiting period for incorporation by reference (which will provide significantly greater flexibility in scheduling shareholder meetings and business combination transactions) and shortened five-business-day broker search period.

For more information on the SEC's proposals, how Holland & Knight can assist in submitting your organization's views to the Commission or to discuss how these proposals may affect your corporate governance and proxy strategy, please contact the authors or another member of Holland & Knight's Public Companies and Securities or Securities Enforcement Defense teams.

Notes

¹ Rule 14a-8 Proposing Release at 7.

² Rule 14a-8 Proposing Release at 16.

³ Rule 14a-8 Proposing Release at 16–17.

⁴ Rule 14a-8 Proposing Release at 20.

⁵ Rule 14a-8 Proposing Release at 68–70.

⁶ Modernization Proposing Release at 4–5.

⁷ Modernization Proposing Release at 20–22.

⁸ Delaware and many other states require only a 10-day notice period for shareholder meetings.

⁹ Modernization Proposing Release at 28. From 1997 through 2025, 311 unique filers submitted 3,376 notices. See also Fact Sheet: Proxy Solicitation Modernization (September 16, 2026).

¹⁰ Modernization Proposing Release at 38–39.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.