The U.S. Securities and Exchange Commission (SEC) announced that it will not express opinions to requests from companies asking to exclude shareholder proposals from their proxy voting materials during the 2025-2026 proxy season, effectively allowing companies to avoid voting on issues proposed by investors such as climate, sustainability and diversity at annual meetings.
In a statement released by the SEC, the Commission said that it “has determined to not respond to no-action requests for, and express no views on, companies’ intended reliance on any basis for exclusion of shareholder proposals.”
While the commission said that reason for the change was due to “resource and timing considerations following the lengthy government shutdown,” the statement follows a series of comments in recent weeks from SEC Chair Paul Atkins that the commission will consider significant changes to the shareholder proposal process including re-evaluating rules requiring companies to bring ESG-related proposals to a vote at annual meetings.
In October, for example, Atkins announced that he has proposed that SEC staff re-evaluate “Rule 14a-8,” a rule adopted by the Commission in 1942, that provides a mechanism for shareholders to include a proposal in a company’s proxy statement. Atkins said that the move formed part of his plans to “de-politicize shareholder meetings,” and specifically called out ESG-related proposals, which he said “frequently involve issues not material to the company’s business,” and yet “consume a significant amount of management’s time and impose costs on the company.”
More recently, in an interview last week, Atkins said that the SEC will examine and propose actions focused on the role of proxy advisory firms and large institutional investors’ influence over the shareholder voting process, in order to tackle “the abuse of the corporate governance system and weaponization of shareholder proposals by politicized shareholder activists.”
In the new statement, the SEC said that companies intending to exclude shareholder proposals from their proxy materials will still be required to notify the Commission, but added that this requirement would be “informational only,” and added that “there is no requirement that companies seek the staff’s views regarding their intended exclusion of a proposal.”
SEC Commissioner Caroline Crenshaw was sharply critical of the commission’s move, it “an act of hostility toward shareholders,” that “hands companies a hall pass to do whatever they want,” in a statement released following the announcement.
Crenshaw added:
“It effectively creates unqualified permission for companies to silence investor voices (with “no objection” from the Commission). This is the latest in a parade of actions by this Commission that will ring the death knell for corporate governance and shareholder democracy, deny voice to the equity owners of corporations, and elevate management to untouchable status.”
