Preparing for Proxy Season 2026

Executive Summary

As the proxy environment continues to evolve, companies must refine their communication of governance and compensation practices to maintain investor confidence as they enter 2026. Transparency and strong pay-for-performance alignment remain core expectations, and the proxy statement (DEF 14A) serves as the primary vehicle for demonstrating how board oversight and compensation programs support long-term strategy. By offering a more complete and cohesive narrative, companies can reinforce their values and commitment to stakeholders while proactively addressing emerging concerns.

With these expectations in mind, Preparing for Proxy Season 2026 examines key governance and disclosure trends among Equilar 100, Equilar 500 and Russell 3000 companies. DFIN provides independent commentary on disclosure strategies to effectively facilitate shareholder discourse and understanding of the proxy statement.

Trends in Shareholder Proposals

Total shareholder proposals declined significantly in 2025, falling 27.9% from the prior year after three years of growth. The most notable decreases occurred across environmental, social and governance (ESG) issues, with decreases of 30%, 32.7% and 63.9%, respectively. While social proposals declined in 2025, they still reflect a substantial increase compared to earlier years, rising 70.8% since 2021. The number of environmental proposals peaked at 90 in 2023 and 2024, before dropping to 63 in 2025. Governance proposals followed a similar pattern, reaching a high point of 97 in 2024 before sharply declining to 35 the following year.

While not the primary cause of the overall decline, updated SEC guidance in Staff Legal Bulletin No. 14M likely contributed to fewer ESG-focused proposals advancing to ballots by heightening scrutiny around business relevance.

In contrast, compensation-related proposals steadily rose in prevalence, with an increase of 69.6% since 2021. General shareholder rights proposals increased 38.3% in 2025, following a 33.8% dip in 2024. The rise in these two proposal types highlights that issues tied directly to pay alignments and investor rights remain core priorities heading into the 2026 proxy season.

Governance Trends to Watch

The majority of Equilar 500 directors continued to receive strong shareholder support in 2025, with 77.9% of directors earning approval at 95% or above. Support levels at or above this threshold generally reflect limited shareholder concerns regarding governance or performance. As companies prepare for the 2026 proxy season, monitoring directors with lower levels of shareholder support and addressing underlying feedback may help strengthen overall board stability.

In 2025, the majority of Equilar 100 companies incorporated additional elements into their compensation discussion and analysis (CD&A) to provide a clear rationale and alignment with performance. Specifically, 87% included a compensation program checklist and 90% added supplemental graphics.

Furthermore, shareholder engagement disclosure was included by 85% of companies, while another 9% referenced it. ESG topics saw more selective use in proxy filings, with 54% of companies providing specific disclosure, while 42% mentioned it. These trends indicate that companies are prioritizing clearer communication around compensation and governance practices, while refining the scope of ESG information presented in proxy filings.

Taken together, these trends reflect a proxy environment that is increasingly focused on demonstrating alignment with shareholder expectations through transparent disclosure. As companies prepare for the 2026 proxy season, proactive engagement and continued refinement of proxy materials will remain important considerations for sustaining investor confidence and reducing potential areas of scrutiny.