Director Elections: All Quiet on the Proxy Front, but Will It Last?

For many US public companies, the 2026 proxy season has been notably calm in two areas that boards and management teams watch closely: director elections and ‘say on pay’.

Director nominees continue to receive strong shareholder support, and executive compensation programs have been passing at high rates. At first glance, the results suggest that investors remain broadly supportive of management on these core annual meeting items.

That conclusion is accurate, but incomplete.

The evolving dynamics of proxy voting. The underlying voting environment is changing – from changes in proxy advisor models to investor stewardship practices and fresh regulatory approaches.

Early 2026 proxy review: director elections and ‘say on pay’

Early 2026 results show support for director elections remains strong across the Russell 3000 and S&P 500. Support for Russell 3000 director nominees has remained largely unchanged so far in the early 2026 proxy season (Jan. 1 through May 15, 2026), with average support of 95.7%: marginally higher than the 95.3% average support recorded for the full 2025 proxy year.

S&P 500 director elections have also continued to receive high support, with 96.6% of shareholders on average expressing support so far in the 2026 proxy year.

‘Say on pay’ has followed a similar pattern so far this year, with shareholders at Russell 3000 companies showing on average 92% support so far compared with 91.1% in the 2025 proxy year.

Support for ‘say on pay’ at S&P 500 companies has been slightly lower at 90.9% so far in 2026  compared with 89.7% in 2025.

Most companies are therefore not facing acute pressure on these votes. However, strong averages can obscure the signals emerging below the surface, and market changes may begin to affect voting outcomes more directly from 2027.

Director elections are becoming more targeted

Early 2026 director election results suggest that shareholder opposition is moving its focus from broad issues towards company-specific governance and oversight issues. So far this season, 9.3% of directors received less than 90% support compared with 9.5% during the same period in 2025 (January 1 through May 15, 2025).

So far in the 2026 proxy season, 25 director nominees have failed to receive at least 50% shareholder support. Only 10 of those directors failed to be elected because they served on boards with a majority vote standard. The results reflect a continuing shift in how investors use director elections.

Investors increasingly treat votes on directors as a way to express concerns about other matters, including board accountability, committee oversight and governance practices, executive compensation, risk oversight and responsiveness to prior shareholder feedback.

This approach can place individual directors, particularly committee chairs and board leaders, under pressure even when overall board support remains high.

For example, investors often want to understand whether the board has the right mix of directors for the company’s strategy, how director refreshment occurs, how directors will oversee material risks and how the board responds to investor concerns.

As investors use AI more widely, they can analyze board composition, director skills, tenure, refreshment, risk oversight and company disclosures more quickly and at greater scale. A board that relies solely or heavily on historically high support may not appreciate the rapidly evolving tools available to investors for board evaluation, which may cause investors to change their views and support as new information emerges.

Despite the rise of AI and evolving areas of scrutiny, boards should not assume that investors do not retain traditional concerns that continue to drive opposition.

For example, if votes on director elections or ‘say on pay’ express low support, investors and proxy advisers will continue to scrutinize other issues, including overboarding, poor attendance, lack of director independence, weak committee independence, classified boards, problematic governance rights and insufficient responsiveness.

‘Say on pay’ remains stable, but scrutiny remains high

‘Say on pay’ voting also appears stable at a headline level. Nine Russell 3000 companies have failed to receive majority support so far in the 2026 season, with three failed votes occurring since January 1, 2026.

Although investors generally provide strong support to ‘say on pay’ votes, they may lower their support when compensation committees provide weak disclosure or fail to explain pay decisions clearly.

So far in 2026, 3.7% of Russell 3000 companies have received ‘say on pay’ results in the ‘red zone’, meaning support between 50% and 70%. Among S&P 500 companies, 3.4% have received red-zone results.

‘Red zone’ votes often matter as much as failed votes in practice. They can prompt a greater need for investor engagement, create a higher burden for the next proxy statement disclosure and raise expectations for clear board responsiveness. They can also increase the vulnerability of compensation committee members in subsequent director elections if investors believe the committee has not addressed the underlying concern.

Proxy adviser recommendations remain influential in these scenarios. ISS has issued negative recommendations on 6.5% of Russell 3000 ‘say on pay’ proposals so far this year, compared with 7.3% during the same period in 2025. For S&P 500 companies, ISS recommended against 6.2% of ‘say on pay’ proposals during the same 2026 period compared with 6.8% in 2025.

The effect of a negative recommendation remains meaningful. So far in 2026, negative ISS recommendations may have reduced shareholder support by as much as 23% of votes cast at Russell 3000 companies and 27% at S&P 500 companies.

Compensation issues attracting scrutiny have not changed dramatically. Investors and proxy advisers continue to focus on pay-for-performance alignment, large CEO pay opportunities, retention or promotional awards, high maximum payout opportunities and discretionary adjustments. They are also looking at limited disclosure of bonus or performance share unit goals and incentive structures that may deliver significant payouts despite mixed shareholder returns.

For companies, the lesson is straightforward. Compensation programs matter, but so does the rationale for them. Investors expect companies to explain how targets were set, how performance was measured and how outcomes were earned. They also expect companies to explain why the compensation committee used discretion or granted special awards, and what was appropriate, along with the changes that were made after receiving investor feedback.

Potential impact of proxy advisor changes

Proxy advisers often announce policy or service changes before companies and investors fully feel the impact. Large institutional investors also tend to revise their own guidelines on a different cadence, often taking 12 to 18 months to assess new information, update internal policies and align voting practices.

That lag matters. A board may look at strong 2026 director election results or steady ‘say on pay’ support and conclude that investor expectations have not changed. In reality, investors may be reviewing those expectations now and preparing to apply them more directly in 2027.

Glass Lewis has announced that, beginning in the 2027 proxy season, it plans to move away from issuing voting recommendations based on one standard ‘house’ or benchmark policy. Instead, the proxy advisory will provide clients with more customized voting frameworks that reflect each investor’s own voting preferences, stewardship priorities and investment philosophy.

As investors navigate the ongoing changes, many have already reassessed how they restructure voting authority internally and adjusted their policies to align with broader shifts in stewardship and engagement. Others may take a more measured approach – waiting for another season to evaluate the data and outcomes before making more meaningful updates. Either approach could make future voting outcomes more varied, increasingly investor-specific and less predictable.

The second half of the year may provide additional early signals. Company meetings between now and year-end may offer a preview of how investors and proxy advisers begin applying new approaches to director elections and ‘say on pay’. While those meetings are unlikely to resolve every question, they may identify the key pressure points companies need to address ahead of the next annual meeting season.

Some investors may shift from asking ‘what did the proxy advisor recommend against?’ to ‘did the board act responsibly?’, reshaping how companies approach disclosure, engagement and communication.

Reshaping the voting landscape

Many large asset managers are reshaping stewardship by changing how they organize voting authority, expanding investor choice and using more customized data and technology.

For example, BlackRock, Vanguard and State Street have each made structural changes to their stewardship operations by separating oversight of the voting and engagement for passively and actively managed funds. These functions are not handled by distinct teams that follow separate voting policies, do not coordinate and are restricted from sharing information. As a result, companies must engage with each team independently.

To add further complexity, many funds now offer ‘voter’s choice’ programs, which allow retail investors to select how the shares attributed to their holdings are voted: the asset manager’s customized policy, a benchmark or thematic third-party policy by proxy advisor or casting votes in line with company recommendations.

The off-season engagement window is valuable

The ‘off-season’ period after the main proxy season often receives less attention than the months immediately before an annual meeting. However, this can be a missed opportunity. This is the time when many investors evaluate the voting results, reassess stewardship priorities and begin shaping their voting guidelines for the next year.

Companies should use this period to engage in candid and substantive conversations with investors, outside from the compressed timetable of proxy solicitation. Those conversations can help boards understand what is driving voting decisions, where investors see emerging concerns and can consider their view on future policy updates.

Director elections deserve particular attention in these discussions. Boards should review individual director vulnerabilities, including skills, tenure, independence, committee leadership, attendance, overboarding and alignment with the company’s strategy. A board assessment that applies an investor or activist lens can help identify where a director, committee or governance practice may draw future scrutiny.

N-PX filings can also provide useful information once they become available in August. These filings allow companies to analyze how institutional investors voted on director elections and other ballot items, which can strengthen engagement planning and help companies focus on the investors whose policies or voting behavior may be changing.

The same discipline applies to ‘say on pay’. Compensation committees can use the post-season period to assess whether incentive outcomes, special awards, discretion and goal-setting decisions are clearly tied to performance and strategy – and that they are well explained. Where investors raised concerns, the next proxy statement needs to demonstrate responsiveness by disclosing how the board listened, what it considered and what changed as a result.

Preparing for 2027

The 2027 season may test assumptions that felt safe in 2026.

Companies should not wait for a failed vote to act. The better approach is to treat the current quiet period, particularly for director elections and ‘say on pay’, as a planning window. Engagement, disclosure and board assessment are most effective when addressed proactively before voting policies and proxy adviser analyses are finalized.

Companies can also benchmark governance practices against peers, including board leadership, refreshment and tenure, as well as diversity, shareholder rights and committee structure. They should review ‘say on pay’ results beyond the pass-or-fail outcome, particularly where support declined from the prior year, entered the ‘red zone’ or where pay changes or decisions are likely to be scrutinized. They should also consider strengthening disclosure around pay outcomes, including how targets were set, how performance was measured and why any discretion or special awards were appropriate.

Most importantly, companies should take a proactive approach. Investors are more likely to support directors and pay programs when they see that the board understands investor concerns and has taken them seriously.