Monthly Archives: June 2025

Opening Statement at Investor Advisory Committee Panel on Pass-Through Voting and Other Ways to Reach the Ultimate Beneficial Owner

Posted by Will Goodwin, Tumelo, on
Wednesday, June 18, 2025
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Will Goodwin is the Co-founder & Head of US Sales at Tumelo. This post is based on his opening statement at an SEC IAC panel.

In June 2025, I participated in a panel hosted by the U.S. Securities and Exchange Commission’s Investor Advisory Committee to discuss the growing momentum behind pass-through voting and what it means for investor empowerment.

The conversation brought together experts from across the governance ecosystem, including Vanguard, EQ Shareowner Services, the Society for Corporate Governance, and a renowned academic from the University of Pennsylvania. Each of us explored how the proxy voting system is evolving, and why giving clients a direct say in corporate governance is no longer a fringe idea, but a fiduciary necessity.

Why investor choice matters

More than 50% of U.S. households own pooled investment vehicles — mutual funds, ETFs, or closed-end funds.(1) That’s around 74 million households or approximately 130 million individual investors.

If we believe corporate governance plays a critical role in how companies operate today, then we must also believe that clients should have a say in how that governance is executed.

The current state of proxy voting

Traditional flow: READ MORE »

ESG Proposals at Mid-Season 2025: Trends, Turbulence & Triumphs

Posted by Danielle Fugere, As You Sow , on
Wednesday, June 18, 2025
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Danielle Fugere is the President and Chief Counsel at As You Sow. This post was prepared for the Forum by Ms. Fugere.

As the 2025 proxy season passes its high point, several patterns have emerged in the engagement, filing, and voting outcomes of shareholder proposals. Despite continued anti-shareholder narratives  and heightened political and legal scrutiny of Environmental, Social, and Governance (“ESG”) issues, information to date indicates that market participants remain actively engaged on ESG[1] issues, with notable strategic shifts in tactics and tone.

Below is a collection of data compiled from industry publications, proxy advisors, and internal results from my and other shareholder organizations.

Quantitative Snapshot

Decreased E&S Filings: As of June 1, 2025, according to proxy advisor ISS, 324 environmental and social[2] shareholder proposals have been submitted across U.S. public companies, down from approximately 460 in 2024. Roughly 25% have gone to a vote. According to Proxy Preview, proposals have clustered around four core issue areas:

•        Climate Risk & Emissions Disclosure: 85 proposals

•        Diversity, Equity & Inclusion (DEI): 36 proposals

•        Environmental Management: 52 proposals

•        Corporate Political Spending / Lobbying Alignment: 77 proposals READ MORE »

CEO Pay Trends: A Post Proxy Season Recap

Posted by Joyce Chen, Equilar, Inc., on
Tuesday, June 17, 2025
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Joyce Chen is an Associate Editor at Equilar, Inc. This post was prepared for the Forum by Ms. Chen.

The 2025 proxy season has officially concluded, and companies have finished submitting their proxy statements (DEF 14A) to the Securities and Exchange Commission (SEC). These filings provide comprehensive insights into executive compensation practices and corporate governance structures. The following analysis examines fiscal 2024 proxy statements submitted by Equilar 500 companies—the largest U.S. public companies by revenue—and highlights key trends in executive compensation.

The aftermath of the COVID-19 pandemic, ongoing inflationary pressures and political crosswinds have all contributed to an increasingly competitive market for high-level leadership. In response, companies have continued to increase pay packages to attract and retain top talent, especially as the role of the CEO becomes more complex and demanding. This analysis follows compensation trends from 2020-2024, offering a comprehensive view of how executive pay has changed over the years in comparison to median employee compensation, as well as a look into gender pay equity.

The median total direct compensation for CEOs increased 3.8%, reaching $16.2 million in 2024. The 25th percentile also experienced a 12.6% increase, while the 75th percentile rose 4.8%. Compared to 2020, when median pay stood at $12.3 million, CEO compensation has risen 31.7%. READ MORE »

Lone Star Governance: Recent Amendments to the Texas Corporate Statute

Posted by Hillary Holmes, Gerry Spedale, and Jason Ferrari, Gibson Dunn, on
Tuesday, June 17, 2025
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Hillary Holmes and Gerry Spedale are partners, and Jason Ferrari is an associate at Gibson Dunn. This post was prepared for the Forum by Ms. Holmes, Mr. Spedale, and Mr. Ferrari.

I. INTRODUCTION

Texas, a state known for its independence and innovation, has recently taken steps to make the state an even more attractive home for American corporations. One of the most impactful steps was adoption of a set of sweeping changes to the Texas Business Organizations Code (“TBOC”) during the 89th Texas Legislature, whose session ran from January 14 to June 2, 2025. This article examines the four bills passed by the Legislature that resulted in the most significant amendments to the TBOC from a corporate governance perspective – SB 29, SB 1057, SB 2411 and, potentially, SB 2337. The amendments to Texas’ corporate statute resulting from these bills were designed to place limitations on litigation risk for, and liabilities of, officers and directors, to manage relations with shareholders and proxy advisory firms, and to provide additional certainty in corporate formalities.

II. Senate Bill 29

SB 29 includes consequential changes affecting corporate governance, governing authority liability, shareholder rights and the internal management of Texas corporations organized under the TBOC. SB 29 was signed into law on May 14, 2025, and the amendments to the TBOC became effective immediately.

A. Codification of the Business Judgment Rule and Protection for Conflicts of Interest

A central feature of the amendments effected by SB 29 is the codification of the Business Judgment Rule (“BJR Statute”). Specifically, the amendments to TBOC Section 21.419 codify the presumption that directors, officers and other managerial officials of corporations acted in compliance with their duties. To take advantage of this presumption, the Texas corporation must be publicly traded or must opt in to TBOC Section 21.419 in its certificate of formation. READ MORE »

Refocusing on Fundamentals Amidst Disruption and Divergence

Posted by Kristofer O’Toole and Austin Vanbastelaer, Semler Brossy, on
Tuesday, June 17, 2025
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Kristofer O’Toole and Austin Vanbastelaer are principals at Semler Brossy. This post was prepared for the Forum by Mr. O’Toole and Mr. Vanbastelaer.

Introduction

Companies are always managing through some level of uncertainty, but the first half of 2025 has introduced multiple, overlapping challenges for compensation committees. Unpredictable effects on supply chains and inflation due to tariffs, cuts and reductions in government spending, and the rapid adoption of artificial intelligence technologies have upended many budgets and, thus, incentive plans. The volatility does not appear likely to abate anytime soon. At the end of the day, neither investors, boards, nor executives seem fully satisfied with the state of executive compensation. As a result, diverging opinions have quietly developed among influential investor groups regarding long-held compensation practices. All of this has created a challenging environment for compensation committees to navigate. But with that challenge also comes opportunity.

Today’s disruptions, divergences, and uncertainties require that companies step back and realign their pay programs with their identity, or “True North.” Leading with identity and culture first will give compensation committees the chance to clarify what they stand for, double down on the metrics that matter, and lead the market with a long-term, principle-based approach to pay.

Finding Your “True North” Creates Clarity Amidst Uncertainty

The companies that best manage open-ended crises are those that stay focused on strategic elements they control, design compensation programs around these elements, and effectively communicate their long-term priorities to stakeholders.

1. Strategy – Re-Focusing on Core Principles

Present uncertainty doesn’t mean that the strengths and skills that helped a company succeed in the past should be abandoned. Organizations should strive to: READ MORE »

Mid-Season Update: Shareholder Proposal Trends, No-Action Request Outcomes, and Voting Dynamics in the 2025 Proxy Season

Posted by Liz Walsh, Ali Perry, and Jennifer Zepralka, Mayer Brown, on
Tuesday, June 17, 2025
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Liz Walsh and Ali Perry are Counsels, and Jennifer Zepralka is a Partner at Mayer Brown. This post was prepared for the Forum by Ms. Walsh, Ms. Perry, Ms. Zepralka, Anna Pinedo, David Breyer, and Alexandria Hasenkamp.

The 2025 proxy season is just past its peak.  We summarize below key emerging trends in shareholder proposals and no-action requests so far this season.  A more comprehensive review of the 2025 proxy season will need to wait until all voting results are in.  However, the trends so far may be instructive to boards as they consider engagement strategies for the coming year.

Key Points:

  • The no-action request process in the 2025 proxy season included an interesting variable because, after multiple no-action requests had already been submitted to the Securities and Exchange Commission (the “SEC”), the SEC staff (the “Staff”) released new guidance for such requests in Staff Legal Bulletin No. 14M (“SLB 14M”).
  • Despite the release of SLB 14M, pursuant to which a company may attempt to exclude a shareholder proposal from consideration, the number of proposals submitted by shareholders overall increased year over year, continuing the 2024 trend.
  • The 2025 proxy season saw a drastic increase in the number of no-action requests lodged with the SEC for the exclusion of shareholder proposals compared to the 2024 proxy season, but only a slight increase in the SEC Staff grant of no-action requests for exclusion.  Requests were granted more often when companies argue that a shareholder proposal relates to ordinary business matters, would result in micromanagement or suffers from a procedural defect.
  • Shareholder proposals on “traditional” governance topics, including reducing supermajority voting requirements, requiring an independent board chair and granting a specified percentage-block of shares the right to call special meetings are popular proposals.  Unlike the prior year, only majority vote proposals are receiving strong shareholder support this proxy season.
  • There is continued investor interest in environmental, social and political topics, with the most frequent shareholder proposals related to climate change, greenhouse gas emissions and political contributions and lobbying disclosures or policies.  Shareholder support for both environmental and “anti-ESG” proposals remains low, with none thus far garnering sufficient votes for approval.
  • Shareholders continue to show interest in proposals relating to emerging issues, such as calls for disclosure about use and oversight of artificial intelligence.

READ MORE »

Investment Stewardship Annual Report

Posted by Joud Abdel Majeid, BlackRock, on
Monday, June 16, 2025
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Joud Abdel Majeid is the Global Head of BlackRock Investment Stewardship. This post is based on a BlackRock report.

The four pillars of our stewardship program 

Our report explains the four pillars of our stewardship program, BlackRock Investment Stewardship (BIS), in depth: engaging with companies, proxy voting on behalf of clients, contributing to industry dialogue on stewardship, and reporting on our stewardship activities.

01. Engaging with companies

BIS defines an engagement as a meeting with a company’s board and/or management that helps inform BIS’ voting on behalf of clients. Specifically, engagements provide companies with the opportunity to share their perspectives on topics that, in BIS’ experience, impact the long-term financial returns BlackRock’s clients depend on to meet their financial goals. In these conversations, BIS listens to and learns directly from company directors and executives and may ask questions relevant to their business. BIS counts only direct interaction as an engagement. BIS does not count letters as engagement.

BIS engages individual companies independently, rather than alongside other asset managers or asset owners. In addition, BlackRock adheres to regulatory constraints on collaborative engagement in any jurisdiction that establishes them. READ MORE »

Defense of Europe as a Responsible Investment

Posted by Stephen M. Davis (Harvard Law School), on
Monday, June 16, 2025
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Stephen M. Davis is a Senior Fellow at the Harvard Law School Program on Corporate Governance. He co-founded the UN Principles for Responsible Investment and the International Corporate Governance Network and originated the Firearms Safety Principles. The following commentary is adapted from a presentation to, and article for, the European Policy Centre, in Brussels.

The last time the Western investment world saw a robust debate over the parameters of buying shares in the arms industry was roughly in the era of the Vietnam War. In the wake of that fraught conflict, thought-leading socially-responsible investor bodies such as the US Interfaith Center on Corporate Responsibility (ICCR) and counterparts in Europe installed clear guidelines against investing in “controversial” weapons. For many institutions, prompted in part by sentiment among clients, this strategy steadily metastasized into a more general allergy against taking stakes in publicly-traded companies implicated in arms manufacturing. As the Cold War ended and the so-called peace dividend took hold, there was little or no brake on the spread of investor resistance to the weapons trade, especially in Europe. Indeed, the public’s stake in protection against war is conspicuously absent from guidance on Environmental, Social, and Governance (ESG) parameters that have emerged in the capital market over the past two decades. Case in point: None of the 17 UN Sustainable Development Goals, agreed in January 2016, addresses the right to secure borders or deterrence to war.

Now, however, Russia’s invasion of Ukraine, and the rising, acute threat that aggression poses to Europe and its citizens, is combining with the US Trump administration’s apparent retreat from full-throated support for NATO to dangerously erode the region’s safety net. This reordered landscape is prompting calls across Europe to invest in indigenous strategic deterrence companies, despite their being a pariah to some of the biggest regional sources of capital.

The time has come for institutional investors to open a pointed dialogue over whether and how Europe’s armaments companies deserve to be reclassified from untouchables to legitimate components of the “S” in ESG. The products they produce are deployed at least in part to ensure the most basic social good: keeping people in Europe safe and free. Widening such companies’ access to capital could boost their dynamism and help achieve the objective of strengthening Europe’s self-reliance at a crucial moment in history. Leaving them to flounder or lose ground to competitors could, by contrast, expose Europe’s nations and citizens to chronic dependence on potentially unreliable partners and to heightened security risks, an assertion underscored by Mario Draghi in his landmark 2024 report on European competitiveness. READ MORE »

Court Permits “Do-Over” for Non-Compliant Nomination Notice under Company’s Advance Notice Bylaw

Posted by Gail Weinstein, Philip Richter, and Steven Epstein, Fried, Frank, Harris, Shriver & Jacobson LLP, on
Monday, June 16, 2025
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Gail Weinstein is a Senior Counsel, Philip Richter is a Partner, and Steven Epstein is the Managing Partner at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank memorandum by Ms. Weinstein, Mr. Richter, Mr. Epstein, and Steven J. Steinman, and is part of the Delaware law series; links to other posts in the series are available here.

In Vejseli v. Duffy (“Ionic”) (May 21, 2025), the Delaware Court of Chancery, in a post-trial decision, held that the directors of Ionic Digital, Inc., who were facing an imminent proxy contest over control of the board, (i) breached their fiduciary duties when they reduced the size of the board so that only one director would be elected at the upcoming annual meeting; but (ii) did not breach their fiduciary duties when they rejected Plaintiffs’ nomination notice on the basis that it did not comply with the requirement under the company’s advance notice bylaw that all agreements relating to the nominations be disclosed. The court ordered that, given the directors’ breach in reducing the board size, the company had to reopen its window for nominations so that all stockholders, including Plaintiffs, could nominate the two directors that would have been up for election if the board size had not been reduced.

Key Points

  • The court stressed the critical informational function served by an advance notice bylaw requirement that all agreements relating to the nomination be disclosed. Of note, the court suggested that even such agreements that had been recently terminated potentially had to be disclosed. And, in any event, the court held, a provision in a terminated agreement that survived termination of the agreement had to be disclosed.
  • The court permitted Plaintiffs a “do-over” although they had submitted a non-compliant nomination. The court explained that, although normally a party that submitted a non-compliant nomination notice would not be permitted to submit a corrected notice, in this case, where it was the wrongful conduct of board that necessitated reopening the nomination window, there was no reason not to permit Plaintiffs to submit a new nomination notice.
  • The court, applying the Coster standard of review to both actions by the board, focused on the directors’ motivations and justifications. The court reaffirmed that the standard established in Coster v. UIP (Del. Supreme Court 2023) applies to board actions that are defensive in nature, not adopted on a “clear day,” and affect the stockholder franchise. While some practitioners speculated that the Coster standard might be more objective than the former Blasius standard, with less focus on directors’ motivations and justifications, in each case in which the new standard has been applied (Coster, Kellner v. AIM (2024), and Ionic), the judicial focus has been     on the directors’ motivations and justifications—suggesting that the court’s analyses and outcomes may not may not be significantly different than they were under Blasius.

READ MORE »

Top Five Takeaways From the 2025 Proxy Season

Posted by Diana Lee, Martha Carter, and Sydney Carlock, Teneo, on
Sunday, June 15, 2025
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Diana Lee is a Senior Vice President, Martha Carter is the Vice Chairman & Head of Governance and Sustainability, and Sydney Carlock is a Managing Director at Teneo. This post was prepared for the Forum by Ms. Lee, Ms. Carter, Ms. Carlock, Matt Filosa, and Sean Quinn.

Introduction

The 2025 proxy season unfolded amid political pressure and regulatory change. A new administration brought a significant shift in the regulatory environment, with revised SEC guidance on Regulation 13D/13G beneficial ownership rules dampening some investor engagement activity. In addition, changes to the SEC’s 14a-8 “no-action” process led to a 30% decline[1]  in the number of shareholder proposals voted related to environmental, social, and governance issues.

Given this regulatory and political backdrop, here are our top five early takeaways from the 2025 Proxy Season.

1. Support for environmental proposals from both proxy advisors and investors sharply declines. ISS opposed every environmental proposal in both the S&P 500 and the Russell 3000 this proxy season, a dramatic reversal from 2024. Last year, the proxy advisor backed more than half of the environmental proposals voted at S&P 500 companies. Most environmental proposals sought additional disclosure GHG emissions targets and climate-related risk disclosures with some newer ones addressing biodiversity and nature loss. The shift comes in the wake of a broad executive order aimed at expanding domestic energy production, alongside increased scrutiny of institutional investors’ climate-related initiatives. ISS has also noted[2] improved overall corporate climate disclosures as a contributing factor.  Investor support has continued to decline, dropping from 18% last year to just 11% in 2025. As in 2024, not a single proposal passed this season. While part of the drop potentially reflects overly prescriptive demands from some proposal sponsors along with more robust existing disclosures, the political and legal attacks on investors focused on climate likely further chilled their support. READ MORE »

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