Delaware Chancery Court Cautions Against Reading Between the By-Lines

Posted by Adam O. Emmerich, David A. Katz, and Kevin S. Schwartz, Wachtell Lipton Rosen & Katz, on
Thursday, September 3, 2026
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Adam O. Emmerich, David A. Katz, and Kevin S. Schwartz are Partners at Wachtell Lipton Rosen & Katz. This post is based on a Wachtell Lipton memorandum by Mr. Emmerich, Mr. Katz, Mr. Schwartz, Theodore N. Mirvis, Elina Tetelbaum, and Loren Braswell, all at Wachtell Lipton.

In a significant decision for public companies facing activism, the Delaware Court of Chancery last week held that a board may not reject a director nomination notice based on disclosure requirements that are not explicitly spelled out in the corporation’s advance notice bylaws. In ATG Capital Opportunities Fund LP v. Lane et al., Vice Chancellor Lori Will found that Empery Digital, Inc. had improperly rejected the nomination notice of an activist investor, ATG Capital Opportunities Fund LP, notwithstanding the Empery board’s well-founded concerns that ATG Capital did not disclose it was acting in concert with another investor and had taken a large short position in Bitcoin ETFs to hedge its position in Empery. The Court concluded that the rejection was not based upon the plain language of Empery’s advance notice bylaws and therefore represented inappropriate interference with the stockholder franchise.

This litigation came after ATG Capital took a significant stake in Empery and nominated a slate of nine director candidates to the board. The Empery board considered the notice and determined that it was deficient both because ATG Capital did not disclose (i) that another investor was acting as a “participant” in ATG Capital’s solicitation and (ii) its short position in Bitcoin ETFs, and because the nominee questionnaires contained certain omissions and inaccuracies. Following receipt of a rejection notice, ATG Capital sued Empery to compel the company to allow the dissident nominees to stand for election.

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SEC Further Modifies Its Rule 14a-8 Response Process

Posted by Helena Grannis, J.T. Ho, and Abena Mainoo, Cleary Gottlieb Steen & Hamilton LLP, on
Thursday, September 3, 2026
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Helena K. Grannis, Abena Mainoo, and J.T. Ho are Partners at Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb memorandum by Ms. Grannis, Ms. Mainoo, Mr. Ho, Francesca Odell, Lillian Tsu, and Shuangjun Wang, all at Cleary Gottlieb.

On August 14, 2026, the SEC’s Division of Corporation Finance updated its statement on how it handles Rule 14a-8 shareholder proposals. The Division will now stop responding to shareholder proposal related no-action requests of any kind, and it will no longer issue “no-objection” letters in response to a company’s representation that it has a reasonable basis to exclude. The change is effective immediately and extends the modified process the Division rolled out last November, which we covered here.

For the coming proxy season, this reads as a slightly modified continuation of last season’s approach. The underlying rule has not changed, so a company weighing an exclusion is faced with the same set of exclusions it always has. The main practical difference is that companies will need to analyze the applicability of exclusions without expectation of a response from the Division; including a reasonable-basis representation will no longer elicit a no-objection response. Companies will still be required to submit an explanation of why the company believes that it may exclude a proposal. The statement has no end date and applies “unless and until the Division announces otherwise,” so we expect this to be the status quo until the SEC completes its planned Rule 14a-8 rulemaking, unless pending litigation against the SEC over last season’s process revision forces a change sooner.

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2026 U.S. Proxy Season in Focus: Shareholder Proposals

Posted by Subodh Mishra, ISS STOXX, on
Wednesday, September 2, 2026
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Subodh Mishra is the Global Head of Communications at ISS STOXX. This post is based on an ISS STOXX Governance report.

Introduction

The 2026 U.S. proxy season marked another period of significant change in shareholder proposal activity. While environmental and social (E&S) proposal volumes continued to decline sharply, governance-related proposals proved more resilient, increasing modestly from the prior year and accounting for a larger share of overall shareholder-sponsored resolutions. These developments unfolded against an evolving regulatory backdrop following changes to the SEC staff’s approach to shareholder proposal exclusions, as well as a broader reassessment of stewardship priorities by both proponents and investors. Voting outcomes suggest that shareholders remain willing to support proposals linked to established governance principles, while support for most E&S proposals remains well below their early 2020s peak despite signs of stabilization in certain issue areas. Together, these trends provide insight into how many investors are calibrating their issuer engagement and voting approaches amid changing market, regulatory, and political dynamics.

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Choosing Your Corporate Home: A Trade-Off Guide for Founder-Led Tech Companies

Posted by Kealan Santistevan, Michael Mencher, and Liz Dunshee, Cooley LLP, on
Wednesday, September 2, 2026
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Kealan Santistevan is a Partner, Michael Mencher is a Special Counsel, and Liz Dunshee is a Senior Strategic Advisor, Capital Markets and Corporate Governance at Cooley LLP. This post is based on their Cooley memorandum.

The choice of state of incorporation used to be handled quietly at formation or IPO and rarely revisited. Even as a handful of high-profile companies and commentators began questioning Delaware’s judge-made law and domicile dominance in 2024, it was unclear whether the sentiment would be temporary or make corporate domicile a more consequential decision.

For now, the latter appears more likely. In the past two years, 50+ public companies have reincorporated out of Delaware, while the First State’s share of the IPO market dropped from 81% in 2024 to “nearly 70%” in 2025. More recently, certain prominent companies have chosen Texas as their state of incorporation and are using the state’s statutory tools to tailor stockholder rights. Although very few widely held large-cap public companies have moved out of Delaware, the trend is more pronounced among founder-led companies or companies with large influential shareholders. The topic is drawing attention in proxy statements, academic journals and the financial press.

Once a company is public and widely held, reincorporation becomes much tricker, as proxy advisory firms have generally opposed moves to Nevada and Texas, and large institutional shareholders have also often opposed reincorporations, resulting in difficult shareholder votes for noncontrolled companies. For a founder-led technology company, where to incorporate is a strategic governance decision. This post offers factors to help companies and their advisors evaluate three prominent options: Delaware, Nevada and Texas. Contact your Cooley counsel to apply these factors to your company’s circumstances.

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Season-end Summary of Shareholder Voting on 14a-8 Proposals

Posted by Neil McCarthy, Nicholas Sasso, and Emily Chapman, DragonGC, on
Tuesday, September 1, 2026
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Neil McCarthy is Co-Founder and Chief Product Officer, Nicholas Sasso is a Product Specialist, and Emily Chapman is a Legal AI Architect at DragonGC. This post is based on a DragonGC memorandum by Mr. McCarthy, Mr. Sasso, Ms. Chapman, and Jennifer Dorney, all at DragonGC.

Shareholder Voting

This summary is focused on 14a-8 proposals that were voted on by shareholders during the 2025-2026 season through June 30, 2026.

Voting Analytics 2025/2026

We define the 2025-2026 season as annual shareholder meetings held between July 1, 2025 and June 30, 2026, the 2024-2025 season as meetings held between July 1, 2024 and June 30, 2025, and the 2023-2024 season as meetings held between July 1, 2023 and June 30, 2024.

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Most Supplemental M&A Disclosures Aren’t Material

Posted by Melissa Sawyer, Sullivan & Cromwell, on
Tuesday, September 1, 2026
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Melissa Sawyer is Global Co-Head of M&A at Sullivan & Cromwell LLP.

This article is the sequel to the author’s previous articles entitled Merger Agreements are Too Long and Disclosure Schedules are a Waste of Money.

When transaction parties draft M&A disclosures, they can almost always add more detail.  They have to make judgments about what information would matter to a reasonable stockholder.  Many months of negotiations may get summarized in a “highlight reel” of just a few pages describing the background of the transaction, and many spreadsheets worth of calculations and assumptions underlying financial projections may get presented in a few tables.

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2026 Proxy Season: Shareholder Proposals

Posted by Zally Ahmadi, D.F. King, on
Monday, August 31, 2026
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Zally Ahmadi is Managing Director, Governance Advisory at D.F. King. This post is based on her D.F. King memorandum.

This post is the first part of D.F. King’s 2026 Proxy Season debriefing report.

Shareholder Proposals

Proposals submissions on the decline, support remains steady.

  • Total number of proposals filed in 2026 is down nearly 25% from 2025 and is at the lowest level we have seen over the past decade.
  • Governance proposal numbers surged, while Environmental, Social and Compensation-related proposals saw decreased numbers across the board.
  • Majority of top shareholder proposal types submitted experienced steady, if not increased, support levels.

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SEC Completes Its Exit from Rule 14a-8 Review

Posted by Ferrell Keel, Joel May, and Kim Pustulka, Jones Day, on
Monday, August 31, 2026
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Ferrell Keel, Joel May, and Kim Pustulka are Partners at Jones Day. This post is based on a Jones Day memorandum by Ms. Keel, Mr. May, Ms. Pustulka, Amy Pandit, and Mike Solecki, all at Jones Day.

In Short

The Situation: On August 14, 2026, the SEC’s Division of Corporation Finance (the “Division”) announced it will no longer respond to companies’ “no-objection” requests under Rule 14a-8, effective immediately. The Division also stated it would no longer respond to Rule 14a-8 “no-action” requests under Rule 14a-8(i)(1) (the “improper under state law” exclusion), effective immediately. With this final step, the Division ended decades of informal staff guidance on shareholder proposal exclusions.

The Result: To exclude shareholder proposals from its proxy materials, a company will still need to comply with Rule 14a-8(j)’s notice requirements by filing an explanation of why the company believes that it may exclude the proposal with the Commission at least 80 calendar days before filing its definitive proxy statement.

Looking Ahead: Although the shareholder proposal process has evolved significantly in the past two years, companies should brace for more change. Not only does “Shareholder Proposal Modernization” remain on the SEC’s Reg Flex Agenda, but Chair Atkins has also stated his view that shareholder proposals may be more appropriately governed by state law. Taken together, these developments reflect a steady erosion of the SEC’s historic role in the shareholder proposal process.

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Securities Class Action Trends: AI Filings Surge, Alleged Losses and Settlement Values Climb

Posted by Tijana Brien, Brett De Jarnette, and Brian French, Cooley LLP, on
Sunday, August 30, 2026
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Tijana Brien, Brett De Jarnette, and Brian French are Partners at Cooley LLP. This post is based on a Cooley memorandum by Ms. Brien, Mr. De Jarnette, Mr. French, and Bingxin Wu, all at Cooley LLP.

Two leading consulting and expert firms – Cornerstone Research and NERA – recently released reports on securities class action filings and settlements in the first half of 2026. Both reported a notable upturn in filing activity and meaningful increases in alleged investor losses and settlement values.

Cornerstone’s reports observed a significant rise in the number of filings and potential investor losses compared to H2 2025, driven by filings related to AI, as well as an increase in both the number and value of settlements. NERA’s report – which covers both case filings and resolutions – observed a slight decline in securities class action dismissals. Both firms also identified new filing trends involving tariff-related allegations and pump-and-dump market manipulation, discussed further below.

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Comment Letter on the SEC’s Proposal to Modify Emerging Growth Company Accommodations and Filer Status Classifications

Posted by Maureen McNichols (Stanford GSB) and Joe Schroeder (University of Indiana), on
Saturday, August 29, 2026
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Maureen McNichols is the Marriner S. Eccles Professor of Accounting and Public and Private Management at Stanford Graduate School of Business (GSB) and Joe Schroeder is a Professor of Accounting at University of Indiana. This post is based on a comment letter by a group of professors, former regulators, and accounting and audit practitioners, submitted to the U.S. Securities and Exchange Commission regarding the SEC’s proposal on Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies.

This post is based on a comment letter submitted to the SEC regarding the SEC’s proposal on Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies, by 115 signatories, including professors, former regulators, and accounting and audit practitioners. Below is the text of the letter with minor adjustments to eliminate the correspondence-related parts, followed by the full list of signatories.

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