Shareholder Proposals Face SEC Repeal As Investors Seek Support

Shareholder proposals are drawing a defense from investor advocates as the SEC seeks to end mandatory annual votes on corporate resolutions. Investors are asking companies to preserve existing access rather than wait for regulators and states to determine the rules.

The Securities and Exchange Commission seeks to repeal Rule 14a-8, an 84-year-old regulation requiring votes on shareholder resolutions. Companies including Microsoft Corp. and Oracle Corp. are facing pressure to keep accepting shareholder proposals.

Shareholder Proposals Prompt Direct Appeals To Companies

Independent advocate James McRitchie wrote to Costco Wholesale Corp. last week, asking it to oppose the SEC’s plans through public comments. Bloomberg Law reviewed the email exchange.

Audience members seated facing a stage at a shareholder meeting.

Investment firm Zevin Asset Management contacted its 30 portfolio companies in mid-September. Sustainable investing director Marcela Pinilla said it urged public opposition, outreach to commissioners and preservation of the status quo.

The New York State and New York City comptrollers’ offices also called on publicly traded companies to keep accepting proposals. Other investors began seeking commitments earlier in the year.

The National Legal and Policy Center’s shareholder arm submitted resolutions at a half-dozen companies. It withdrew one after Microsoft agreed in August to accept proposals meeting existing ownership requirements for one year.

That commitment applies regardless of the agency’s actions, according to Bloomberg Law’s reporting. Similar resolutions are scheduled for votes Oct. 13 at Procter & Gamble Co. and Nov. 18 at Oracle.

Smaller Investors Seek Continued Access

Shareholder proposals can concern board practices, diversity, equity and inclusion, among other subjects. Governance resolutions dominated the 2026 proxy season, seeking measures such as independent directors or particular shareholder rights.

Paul Chesser, director of the NLPC’s Corporate Integrity Project, said smaller proponents rely on the rule to reach companies. Hedge funds can call chief executives directly, Chesser said.

Chesser’s organization holds shares in a couple dozen more companies where it could submit proposals before next spring’s proxy season. Future resolutions would probably seek to preserve more of the federal rule, he said.

Companies May Choose Different Paths

Costco general counsel John Sullivan told McRitchie the company was evaluating the SEC proposal and his comments. The response did not commit Costco to opposing the rollback.

Thompson Coburn LLP partner Brent Trame predicted that companies would take different paths in the near term. Proskauer Rose LLP partner Frank Zarb said companies would probably retain at least some proposals if the rule disappeared.

The SEC stopped settling proposal-inclusion disputes last November and said that policy would continue until further notice. Timothy Smith of the Interfaith Center on Corporate Responsibility said companies already differed in their handling of the 2026 season.

States Could Determine Future Requirements

An SEC spokesperson described state legislatures and courts as the proper venues for shareholder proposal rules. University of Nevada, Las Vegas law professor Benjamin Edwards said states could mandate a process or let companies opt in.

Delaware’s Corporate Law Council has been studying the implications for months, Secretary of State Charuni Patibanda-Sanchez said. Two-thirds of Fortune 500 companies are incorporated in Delaware.

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