SEC Permits Companies to Exclude Shareholder Proposals Without SEC Preclearance

In a significant change to how the SEC Staff handles requests to exclude Rule 14a-8 shareholder proposals, during the 2025–2026 proxy season companies will no longer need to seek Staff no-action relief before excluding a proposal, except for proposals excluded as improper under state law. Instead, companies need only notify the Staff and the proponent at least 80 days before filing definitive proxy materials that they intend to exclude a proposal. The Staff will not consider traditional no-action requests for proposals unless the company asserts the proposal is improper under state law. The Staff will provide an optional, written non-objection to companies that include in their notice an unqualified statement that they have a reasonable basis under Rule 14a-8 to exclude the proposal. Past adverse no-action responses are not binding and we believe that the greater flexibility given to companies this proxy season will promote a beneficial realignment of the entire Rule 14a-8 shareholder proposal practice. Responsible use of the SEC’s guidance will give companies a newfound ability to rely on the rule as written.

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