2026 U.S. Annual Report And Proxy Season: It's Go Time!

Although it may seem early, it is already time to start preparing for the 2026 annual report and proxy season. While many disclosure requirements remain consistent from prior years, there has been a significant shift in the focus of, and discourse relating to, the priorities of the Securities and Exchange Commission ("SEC"). Practitioners started to see the impact of these developments over the past year, and these developments are likely to have an even more significant impact on disclosure and governance practices during the 2026 season.

This Legal Update provides an overview of key issues companies should consider as they address their annual report and proxy disclosure requirements. Topics are organized as follows:

• The New Administration and Changing Views at the SEC
  • The SEC is Open for Business
  • Drafting in Times of Uncertainty
  • EDGAR Next Transition Delays and Regulation S-K Item 405 Implications
• Annual Reports on Form 10-K
  • Key Disclosure Sections
  • Risk Factors
  • MD&A
  • Non-GAAP Financial Measures
  • Segment Disclosure
  • Other Accounting Disclosure Topics: Taxes and Critical Accounting Estimates
  • Cybersecurity Disclosure
  • Forward-Looking Statements and Cautionary Language
  • Certifications, Exhibits, Signatures, and Consents
  • Human Capital Management Disclosure
• Environmental and Social Matters
  • Climate Change
    • Status of the SEC's Rules on Climate Disclosure
    • Current Disclosure Requirements for Climate-Based Risk
  • DEI Programs and Disclosures
  • ESG and Anti-ESG Movement
  • ESG Litigation Trends
• Executive Compensation Disclosure and Developments
  • Compensation Determinations in Uncertain Times
  • Pay Versus Performance Disclosure
  • SEC Executive Compensation Roundtable
• Governance Matters
  • Board Independence, Leadership Structure, and Risk Oversight
  • Controls and Procedures
  • Director and Officer Questionnaires
• Proxy Advisory Firm Updates
  • ISS and Institutional Advisors Amended Diversity-Based Voting Guidelines
  • Texas Senate Bill 2337 and Related Litigation
  • Glass Lewis Announces End t
  • Benchmark Recommendations
• 2025 ISS Global Benchmark Policy Survey Results
  • Proxy Voting Matters
  • Shareholder Proposals
  • No Action Letter Trends
  • New Section 13G Guidance and Effect on Shareholder Engagement
  • SEC Review of Shareholder Proposals in 2026
  • New Retail Shareholder Voting Programs

THE NEW ADMINISTRATION AND CHANGING VIEWS AT THE SEC

THE SEC IS OPEN FOR BUSINESS

Since the commencement of the second Trump administration on January 20, 2025, the SEC has taken a dramatically different approach to disclosure and reporting by public companies compared to the previous administration. Starting under then-acting Chairman Mark Uyeda, the SEC's Division of Corporation Finance published new Staff Legal Bulletin 14M ("SLB 14M"), providing updated grounds for excluding shareholder proposals under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Subsequently, on November 17, the Division of Corporation Finance published new guidance stating that, during the 2026 proxy season, it would only provide substantive views on requests to exclude shareholder proposals pursuant to Rule 14a-8(i)(1), a substantial departure from previous proxy seasons. On another note, the SEC also elected not to defend litigation of recently adopted rules governing climate-based disclosure. These are just a couple of examples of actions by the SEC and its Divisions that mark a clear divergence from the priorities articulated in prior years.

In addition, the SEC Commissioners, including Commissioner Hester Peirce, have spoken publicly about the need for principles based disclosure for the sole purpose of informing investment decisions, and of the SEC's "limited mission," such that "[p]ublic companies should be at the beck and call of shareholders qua shareholders, not the ever-growing, never-satisfied set of stakeholders that brazenly grasp at company resources to do something other than maximize the value of the company. Directors and executive officers serve shareholders and society best by keeping the companies they guide focused on maximizing longterm financial value."¹ The views of the current administration are also reflected in the SEC's recentlypublished spring 2025 regulatory agenda,² which includes an item titled "Rationalization of Disclosure Practices" that hints strongly at changes to the current disclosure and regulatory scheme to reflect the views shared by Commissioner Peirce.

The sum total of the above, in combination with many executive actions issued by the Trump administration would lead practitioners, companies and other stakeholders in a new direction this annual reporting and proxy season. That said, the rules governing disclosure have not changed. Companies will need to grapple with the SEC's new perspective and the views expressed by both the Trump administration and other stakeholders, as well as a fluid and challenging economic environment and geopolitical climate, while satisfying the rule requirements and providing the material information investors need to make informed investment decisions.

DRAFTING IN TIMES OF UNCERTAINTY

Against the backdrop of heightened macro volatility in 2025, including introduced and threatened tariffs, rapid developments and emerging risks in artificial intelligence ("AI"), and broader political and geopolitical instability, companies should review and recalibrate their approach to disclosures for the upcoming annual report and proxy season with renewed discipline. As we discuss in further detail below, companies should reassess and refine their Form 10‑K disclosures with an emphasis on specificity, materiality, and cross‑document consistency. In Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), companies should address known trends and uncertainties that are reasonably likely to materially affect liquidity, capital resources, supply chains, pricing, customer demand, or segment performance, making clear the timing, magnitude, and drivers of impacts (e.g., tariff exposure by product or geography, mitigation strategies, and sensitivities). Risk factor drafting should avoid boilerplate and describe company‑specific risks, including tariff‑related trade restrictions and retaliatory measures, regulatory shifts in AI (such as use of generative AI tools and evolving compliance expectations for AI governance), cybersecurity threats, and policy unpredictability affecting environmental, social and governance ("ESG") matters and diversity, equity and inclusion ("DEI") initiatives. Companies should also consider whether any of these developments warrants updates to its cautionary language related to forward-looking statements.

Much like in 2025, we expect that a number of high profile issues will receive attention from investors, companies and other stakeholders during the 2026 proxy season. These issues, including ESG matters and climate-based disclosure, among others, reflect the changing political landscape and highlight the differences between the current SEC administration's priorities and those of the prior administration.

We address each of these topics further below.

EDGAR NEXT TRANSITION DELAYS AND REGULATION S-K ITEM 405 IMPLICATIONS

In 2025, the SEC introduced EDGAR Next, a modernized electronic filer account management system, and phased out the legacy EDGAR system. The transition began in March and use of the new EDGAR Next system became mandatory on September 15. Unfortunately, many filers experienced materially longerthan-anticipated enrollment delays during mid-to-late 2025 due to SEC backlogs in reviewing amended Form IDs and related enrollment steps. As the SEC indicated in its August 2025 webinar,³ the Staff added resources relating to the amended Form ID and urged filers to scrutinize Form ID submissions to avoid avoidable delays. Nonetheless, practical hurdles, such as the 60-character title field constraint, challenges resetting codes when legacy email points-of-contact were inaccessible, and the need for coordination across multiple account administrators and delegated entities, extended enrollment time for a significant number of filers. These bottlenecks, combined with the September 15, 2025, deactivation of legacy filing access codes for submissions, resulted in late Section 16(a) reports for many companies and insiders who could not timely complete EDGAR Next onboarding or obtain new credentials.

Companies should be mindful of the Regulation S‑K Item 405 implications in their 2026 proxy statements. Item 405 requires disclosure of any known failures to file timely Forms 3, 4 or 5 during the most recent fiscal year, including identification of the reporting persons and the number of late reports and transactions. In preparing 2026 proxies, issuers should carefully reconcile insider reporting logs against EDGAR timestamps, assess whether delays were attributable to EDGAR Next transition issues, and include required delinquency disclosure where appropriate. Even if transition delays may have been operational in nature, Item 405 is a bright-line, disclosure‑based requirement. Therefore, issuers should treat EDGAR Next-induced late filings no differently from other late filings and make clear, accurate delinquency disclosures in their 2026 proxy statements.

ANNUAL REPORTS ON FORM 10-K

Reporting companies in the United States must file their annual reports on Form 10-K (or Form 20-F for foreign private issuers ("FPIs")) in the first few months of 2026, with the exact timing depending on their filer status. While there have not been any changes to the rules governing the disclosure in annual reports since last year, companies must still determine how best to satisfy the SEC's rules and regulations amid a shifting (and rapidly changing) political and regulatory climate.

KEY DISCLOSURE SECTIONS

RISK FACTORS

Risk factor disclosure is an important feature of an annual report, and perhaps even more important in years of substantial change and uncertainty. Generally, risk factors must focus on the material factors that make an investment in a company's securities speculative or risky, tailored to the specific reporting company. It is important to take a fresh look at risk factor disclosures each year to consider whether any risks need to be updated, whether any new risks should be added (in response to disclosure elsewhere in the filing or otherwise) and whether it would be appropriate to delete any risk factors.

Companies should be particularly sensitive to situations in which they previously described a risk in hypothetical terms and subsequently an actual event of that nature occurred. In these circumstances, an update to the risk factors may be needed to avoid securities law liability for misleading risk factors. This is a recurring issue in the cybersecurity area, both with regard to SEC and private litigation, where a prior risk factor discussed the potential of a data breach or ransomware attack and thereafter the company suffered a cyber incident. The same consideration applies to other topics, including supply chain disruptions, tariffs, and macroeconomic factors.

In preparing annual risk factor updates, companies should consider the following topic areas, tailored to their business:

• Inflation and interest rates. Where inflationary pressures or interest rate changes have materially impacted operations, the disclosure should identify the types of inflationary pressures faced and how they have affected the business. Where practicable, quantify the impacts and discuss whether mitigation efforts (such as pricing actions, hedging or supplier diversification) introduce new risks or uncertainties.
• Tariffs and trade policy. Given heightened protectionism and evolving U.S. tariff policies, companies should assess whether actual or potential tariffs, retaliatory measures by trade partners, and related trade policy uncertainties warrant tailored risk disclosure. Consider identifying impacted geographies (e.g., China, Mexico, Canada, EU and UK), products or inputs (e.g., steel, aluminum, autos and parts, semiconductors), and potential effects on sourcing, costs, pricing, demand and competitive dynamics. Where reliance on exclusions or quota arrangements is material, address the risk of expiration or modification.
• Geopolitical risks. Companies should assess whether and how evolving geopolitical dynamics could materially affect their business and warrant risk factor disclosure, including the potential impact of rising trade protectionism and tariff actions, shifting national security–driven regulations and policy interventions, and government executive actions that alter market access, supply chains, or cost structures. Importantly, these impacts must be considered on an international, national and local level. Companies should also consider any risks posed by active conflicts, including, but not limited to, those between Russia and Ukraine and those in the Middle East.
• Climate and diversity. Companies should consider whether they need to update risk factor disclosure related to climate change or diversity-related disclosure, considering such topics in light of the current political and regulatory climate. For example, companies may consider addressing the difficulty of balancing demand for increased diversity disclosure from certain investors and market participants with the countervailing opposition and scrutiny from the federal government and others. See "Environmental and Social Matters" below for additional discussion on climate and diversity related disclosures.
• Cybersecurity and data privacy. Continue to assess whether cyber threats, data privacy compliance, third-party service provider risks, and the potential operational and financial impacts of cyber incidents are appropriately addressed and tailored, especially following any material incidents or near misses.
• Collateral related risks. The recent bankruptcy filings by First Brands Inc. and Tricolor Auto Acceptance, LLC highlight collateral related risks to lenders, ranging from risks related to the adequacy of due diligence procedures, from depth to scope, to risks related to credit agreement provisions with regard to pledged assets, as well as whether a third party holds custody of pledged assets, and risks related to control over cash flows, among others.
• Artificial intelligence. Companies that develop or use generative or other AI products may consider including risk factors addressing potential issues in that area, either on a stand-alone basis or as component of other risk factors. For example, a company's AI risks might include violation of existing and future laws regulating development and use of AI, lack of data science skills, limited access to training data, biased or inaccurate results, price pressure from competitors using lower-cost AI systems, and/or failure to secure intellectual property rights.
• Risks related to U.S. government shutdowns. In October 2025, the U.S. government entered into a prolonged shutdown, which ended on November 12, 2025. Companies, especially those who do substantial business with or that are dependent upon the U.S. government, must evaluate the materiality of such shutdown (or possible future shutdowns) on their business and operations, including but not limited to any ongoing negative economic impact.
• Risks associated with immigration policy changes. Companies that have been, or expect to be, affected by changes in immigration policy should consider discussing the effects on their work force, recruitment, and labor costs, among other areas.
• Regulatory change; political risk. The change in administration has brought about significant regulatory change. Depending upon a company's industry, these changes or anticipated changes may require significant disclosure updates. For example, companies in the healthcare or pharmaceutical sectors may be particularly affected. As a general matter, public companies and their boards of directors are facing heightened political risks, may have less predictability with respect to their interactions with their regulators, and may have limited ability compared to prior periods to respond to new policy or regulatory announcements. Again, this may be more pronounced for companies in certain industries and may require significant disclosure updates.

Because risks may change from year to year, and because material risks can arise from all aspects of a company's business, it is important from a disclosure control perspective that the full set of risk factors contained in an annual report be reviewed by the appropriate departments within the company to determine whether new risks need to be added or any existing risk factor disclosure needs to be revised.

Footnotes

1 See https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-northwestern-securities-regulation-institute-012725.

2 See https://www.reginfo.gov/public/do/eAgendaMainoperation=OPERATION_GET_AGENCY_RULE_LIST¤tPub=true&agencyCode=&showStage=active&agencyCd=3235

3 See "EDGAR Next Webinar, Enrollment and FAQs – August 26, 2025 (Live Recording)," available at: https://www.youtube.com/watch?v=38O6Cv-PqzE

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.