For decades, the Securities and Exchange Commission (“SEC”) acted as the de facto arbiter of Rule 14a-8 of the Securities Exchange Act of 1934, the federal securities rule governing shareholder proposals. The rule gives shareholders a procedure for proposing ballot items for corporate elections and outlines specific procedural and substantive grounds on which management can lawfully exclude a proposal. The SEC used to referee this process by allowing companies to apply for “no-action” letters that effectively blessed their decisions to exclude proposals from their ballots. But in November 2025, the Commission announced that it would no longer issue such letters, leaving companies to interpret the rules for themselves.

My new paper, The Impact of SEC Punting, compares proposal activity at S&P 1500 companies during the 2025 and 2026 proxy seasons to analyze how companies and shareholders have responded to the SEC’s decision to stop refereeing shareholder proposal disputes.

My analysis draws on numerical and textual data on shareholder proposals and on qualitative interviews with practitioners. Overall, the results indicate that the SEC’s announcement was followed by a sharp reduction in the number of proposals reaching corporate ballots. This reduction appears to be driven by a significant decline in the number of environmental and social proposals submitted in 2026. Furthermore, while shareholders continued to submit governance-related proposals at a relatively consistent pace across the two proxy seasons, companies chose to exclude those proposals at higher rates in 2026, including in circumstances where the SEC generally required inclusion in the past.

Taken together, the findings demonstrate that the SEC’s decision to change its shareholder proposal procedures has had a meaningful impact on shareholder voting at large public companies. Going forward, the Commission should consider using the formal notice-and-comment rulemaking procedure to ensure that potential substantive changes are adequately considered.

Shareholder Proposal Process and the SEC’s Punt

Under Rule 14a-8 of the Securities Exchange Act of 1934, investors in public companies can submit resolutions to be voted on at the annual corporate meeting. The rule also outlines specific criteria that allow management to omit certain proposals. Historically, the SEC acted as the informal referee for this process. When companies wanted to exclude a proposal from their proxy ballot, they applied to the SEC staff for a “no-action” letter confirming that they would not face enforcement action for the omission.

For as long as the SEC has refereed this process, it has periodically questioned whether it should. In both 1982 and 1997, the Commission formally proposed eliminating or severely reducing its role as an informal arbiter. Both times, however, the agency faced overwhelming public opposition during the notice-and-comment period. Commenters cited the costs, confusion, and complexity that would result from the SEC abandoning its post, prompting the Commission to back down and maintain its active gatekeeping role.

That historical posture shifted in late 2025, though this time without the formal public comment process that accompanied the agency’s earlier reform efforts. On November 17, 2025, the SEC announced a new policy for the upcoming proxy season: it would not provide substantive responses to most shareholder proposal exclusion requests (the “2025 Policy”). In doing so, the SEC altered its decades-long practice of refereeing companies’ attempts to exclude shareholder resolutions. Under the 2025 Policy, companies can simply notify the Commission of their intent to omit a resolution and then do so without waiting for a substantive response from the SEC staff.

The announcement prompted an immediate debate, with various commentators advancing wildly different hypotheses about the policy change’s likely impact. These predictions can be grouped into three competing views. The first view, implicit in the SEC’s adoption of the 2025 Policy, was that the suspension of staff review would have no material effect on shareholder proposals. This view rested on two premises: first, the new policy did not change any of the grounds for excluding proposals under Rule 14a-8, and second, proponents could still challenge exclusions they believed were unlawful in federal court.

The second view theorized that without the protection of informal SEC staff adjudication, companies would exercise greater caution. Proponents of this view predicted that companies that excluded proposals without the cover of a no-action letter would experience heightened litigation and reputational risks. Faced with these risks, they argued, managers would default to including proposals unless the legal grounds for omission were unambiguous, leading to an increase in the number of voted resolutions.

Finally, the third view claimed that the withdrawal of agency oversight granted excessive discretion to companies and that companies would use this discretion to exclude more proposals. Supporters of this view argued that because federal litigation is prohibitively expensive for most proponents, companies could unilaterally omit proposals with little fear of adverse consequences. As a result, companies might choose to exclude even proposals that previously would have been reasonably likely to reach a shareholder vote, and companies might be especially comfortable excluding proposals from investors with limited financial resources.

A surface-level observation of the 2026 proxy season yields anecdotal evidence supporting each of these views. For instance, UnitedHealth Group received three proposals in both 2025 and 2026 and challenged two of them each year. This continuity suggests that the 2025 Policy had no material effect on how proponents targeted the firm or how management responded. Conversely, JPMorgan Chase went from contesting all eight proposals it received in 2025 to seeking the omission of just two of the six proposals it received in 2026. As a result, the number of resolutions reaching its ballot doubled, illustrating the adoption of a more cautious posture. Finally, other companies appear to have utilized the newly permissive framework to assert greater unilateral discretion. Skyworks Solutions, for example, unilaterally excluded a governance proposal seeking the elimination of supermajority requirements in 2026, despite permitting the exact same template to proceed to a vote in 2025 where it garnered 98.8% shareholder support. Because isolated examples can be found to support any of these hypotheses, evaluating the true impact of the 2025 Policy requires a systematic, market-wide analysis.

Impact on Proposal Submission and Ballot Access

My paper provides that evaluation by presenting the first comprehensive empirical assessment of how the SEC’s decision to scale back its review of shareholder proposals has affected the proxy process. The paper uses hand-collected data on all shareholder proposals filed at companies in the S&P 1500 index in 2025 and 2026 to study changes in the number and characteristics of shareholder proposals filed, omitted, and voted. To isolate the impact of the SEC’s new policy, the analysis employs a company fixed-effects strategy. By restricting the sample to companies that filed proxy statements in both the 2025 and 2026 proxy seasons, the empirical design effectively controls for time-invariant firm characteristics and isolates within-company changes. This approach assumes the absence of other major systemic changes between 2025 and 2026, an assumption supported by the fact that both seasons occurred under the same presidential administration, with the same SEC leadership, and with the same legal bases for exclusion.

The paper’s central finding is that the total number of proposals reaching the corporate ballot dropped 10% after the SEC’s policy change, from 423 in 2025 to 382 in 2026. This overall contraction was driven entirely by a reduction in environmental and social resolutions, which fell sharply from 223 to 167 ballot appearances. Corporate governance proposals, on the other hand, remained mostly unaffected. The data suggest that the number of proposals declined because proponents were deterred from submitting proposals in the first place. Total initial submissions dropped by 15%, falling from 619 to 526, and the number of companies in the sample receiving zero proposals increased from 56 in 2025 to 86 in 2026.

Impact on Proposal Composition

This paper also examines the policy’s impact on the types of proposals that were submitted and omitted. It does so through two complementary approaches.

First, the paper analyzes aggregate shifts in both the types of proposals that faced exclusion and the underlying legal grounds companies invoked to omit them. By disaggregating the data across the most frequently submitted categories, the paper reveals a striking divergence in impact across proposal types. While the top environmental and social topics appeared less frequently in 2026, suggesting that proponents may have been deterred from submitting them, several of the most popular corporate governance subjects experienced a sharp decline in their likelihood of reaching the ballot because they were excluded at higher rates than in previous years. The data further expose a pronounced asymmetry in who faced these heightened exclusions in the 2026 proxy season. For instance, while companies frequently blocked standard proposals requesting an independent chair submitted by established individual filers, causing the exclusion rate for that group to more than double, they permitted analogous proposals filed by anti-ESG proponents (i.e., proponents opposing environmental, social, and governance initiatives) to proceed unchallenged with a perfect ballot rate. In addition to these compositional changes, an evaluation of the legal justifications for omission reveals a sharp increase in exclusions based on highly subjective standards. In the absence of SEC staff scrutiny, exclusions relying on the inherently fact-intensive false or misleading standard nearly quintupled, and claims of substantial implementation rose noticeably.

Second, the analysis uses a text-based clustering methodology to group highly similar proposals. In doing so, it provides some support for the claim that a subset of companies used the suspension of staff review to exclude specific proposal templates that had either gone unchallenged or had affirmatively survived agency scrutiny in the preceding season. Notably, these abrupt shifts in companies’ responses were heavily concentrated in governance templates, such as proposals to eliminate supermajority requirements.

Impact as Seen by Market Participants

Finally, the paper adds texture to its data-based findings by discussing insights from conversations and semi-structured interviews with key participants in the proxy process. These discussions yielded four primary findings. First, multiple participants noted signs of a chilling effect among less-established individual filers and certain categories of institutional proponents. Second, interviewees emphasized that company responses to the 2025 Policy were highly heterogeneous. Rather than describing a uniform move toward greater assertiveness or greater caution, participants recounted a landscape in which corporate behavior varied substantially by size, sophistication, prior engagement history, and the identity and resources of the opposing proponent. Third, the conversations and interviews revealed that while litigation and other private enforcement mechanisms can serve as a potent warning to issuers, these tools are not a scalable solution and remain largely out of reach for individual retail investors. Fourth, participants across all categories voiced deep uncertainty regarding the long-term future and ultimate equilibrium of the shareholder proposal framework under the new regime.

Looking Ahead

Collectively, these results suggest that the SEC’s 2025 policy change has had a substantive impact on the regulatory landscape and cannot be viewed as a mere administrative adjustment to manage agency resources. To the extent the Commission intends to further reform the shareholder proposal framework, it should consider using the formal notice-and-comment rulemaking procedure to provide greater predictability and stability for all market participants.

The full paper is available for download here.