Mid-Season Update: Shareholder Proposal Trends, No-Action Request Outcomes, And Voting Dynamics In The 2025 Proxy Season

The 2025 proxy season is just past its peak. We summarize below key emerging trends in shareholder proposals and no-action requests so far this season. A more comprehensive review of the 2025 proxy season will need to wait until all voting results are in. However, the trends so far may be instructive to boards as they consider engagement strategies for the coming year.

Key Points:

• The no-action request process in the 2025 proxy season included an interesting variable because, after multiple no-action requests had already been submitted to the Securities and Exchange Commission (the "SEC"), the SEC staff (the "Staff") released new guidance for such requests in Staff Legal Bulletin No. 14M ("SLB 14M").
• Despite the release of SLB 14M, pursuant to which a company may attempt to exclude a shareholder proposal from consideration, the number of proposals submitted by shareholders overall increased year over year, continuing the 2024 trend.
• The 2025 proxy season saw a drastic increase in the number of no-action requests lodged with the SEC for the exclusion of shareholder proposals compared to the 2024 proxy season, but only a slight increase in the SEC Staff grant of no-action requests for exclusion. Requests were granted more often when companies argue that a shareholder proposal relates to ordinary business matters, would result in micromanagement or suffers from a procedural defect.
• Shareholder proposals on "traditional" governance topics, including reducing supermajority voting requirements, requiring an independent board chair and granting a specified percentage-block of shares the right to call special meetings are popular proposals. Unlike the prior year, only majority vote proposals are receiving strong shareholder support this proxy season.
• There is continued investor interest in environmental, social and political topics, with the most frequent shareholder proposals related to climate change, greenhouse gas emissions and political contributions and lobbying disclosures or policies. Shareholder support for both environmental and "anti-ESG" proposals remains low, with none thus far garnering sufficient votes for approval.
• Shareholders continue to show interest in proposals relating to emerging issues, such as calls for disclosure about use and oversight of artificial intelligence.

Outcome of Shareholder Proposal No-Action Requests

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, a company must include a shareholder proposal in its proxy materials unless the proposal falls under one of the substantive bases for exclusion, or the proponent or proposal fails to satisfy the eligibility or procedural requirements of the rule or the company's constituent documents. Typically, when a company intends to exclude a shareholder proposal from its proxy materials, it will request SEC staff no-action relief.

The 2025 proxy season no-action request process included an interesting variable because, on February 12, 2025, after multiple no-action requests had already been submitted to the SEC Staff, the Staff released SLB 14M. SLB 14M included Staff guidance on the scope and application of Rule 14a-8(i)(5), Rule 14a-8(i)(7) and certain other aspects of Rule 14a-8, and also provided guidance for companies that previously submitted no-action requests during the 2025 shareholder proposal season. However, in 2025, prior to SLB 14M's release, the Staff had not opined on any no-action request relying on Rule 14a-8(i)(5), and only responded to approximately 10 requests relying on Rule 14a-8(i)(7), such that the majority of such requests were analyzed under guidance included in SLB 14M. For additional information regarding SLB 14M, see Mayer Brown's Legal Updates, "SEC Staff Issues Legal Bulletin Announcing Changes to Shareholder Proposal Review Process During the 2025 Proxy Season," dated March 4, 2025, and "Shareholder Proposals in the Wake of Staff Legal Bulletin 14M," dated May 29, 2025.

Despite the variable introduced by this mid-season guidance, the number of no-action requests related to shareholder proposals increased year over year, continuing a 2024 trend.

Interestingly, despite the increased number of no-action requests, the percentage of requests the Staff granted remained relatively constant in 2024 and 2025, at about 54%. Other notable facts about no-action requests in the 2025 proxy season include the following:

• The most common grounds on which the Staff agreed to take no action was proponents' failure to satisfy non-substantive procedural requirements, such as those in Rule 14a-8(b), setting forth the grounds on which proponents are eligible to submit proposals, and Rule 14a-8(e), outlining the deadlines by which proposals must be submitted.
• Substantively, the Staff agreed to take no action under Rule 14-8(i)(7) in approximately 75 no-action requests, or about 40% of the requests the Staff agreed could be excluded. The Staff's no-action analysis under Rule 14a-8(i)(7), the "ordinary business exemption," allows a company to exclude a proposal that "deals with a matter relating to the company's ordinary business operations" that should be the jurisdiction of the board and management, rather than shareholders. The central considerations underlying this exclusion are (a) the subject matter of the proposal and (b) the degree to which the proposal "micromanages" the behavior of the company. Under SLB 14M, the Staff evaluates both "significance" and "micromanagement" on a company-specific, case-by-case basis, an approach that is perhaps reflected in the overall success of Rule 14a-8(i)(7) no-action requests this proxy season. That said, approximately 50 of the 86 requests that Staff declined to omit cited Rule 14a8-(i)(7) as at least one possible ground for exclusion. While it is impossible to explain in full why the Staff did not grant these requests, we will need to wait and see in 2026 if it is indeed more likely that no-action requests under Rule 14a-8(i)(7) will be granted.
• Out of the 86 no-action requests the Staff declined to grant, only three proposals have received majority shareholder votes, while approximately 10 have yet to be voted on. All three dealt with corporate governance issues. Specifically, two out of the three passing proposals requested elimination of supermajority voting requirements in favor of simple majority voting, while the third requested that shareholders have the right to act by written consent, representative of the overall success of corporate governance proposals this season. Interestingly, approximately 30 proposals for which no action was not sought received over 75% shareholder support and all dealt with corporate governance related matters, such as elimination of supermajority voting, the removal of directors or election of dissident directors, or proposals to declassify the board of directors. Together, this might signal overall shareholder support for the types of corporate governance changes proposed in 2025.

2025 Shareholder Proposals Trends

To date, this proxy season has seen a large number of proposals on "traditional" governance topics, including proposals regarding shareholders' rights to call special meetings, simple majority vote requirements or independent board chairs. Compensation-related shareholder proposals were also frequent so far this proxy season, particularly proposals requesting a shareholder vote on severance payments for executives or a report on pay disparities between executive officers and employees. There have also been a significant number of proposals to amend clawback policies or require a report on a board's decision not to claw compensation back in connection with a 'Big R' restatement of a company's financial statements.

Proposals regarding majority voting remained popular this season, with more than 65% of the proposals voted on at this point achieving majority support from shareholders. However, this is a decrease from the 2024 proxy season, during which more than 75% of these proposals passed. Although proposals to appoint an independent chair or grant a specified percentage-block of shares the right to call special meetings were popular proposals, to date, all such proposals failed to receive the necessary vote.

While there were a large number of proposals regarding shareholder votes on severance payments for executives, reports on pay disparities between executives and employees or reports on decisions under a company's clawback policy, all of these proposals failed to gain shareholder support to pass.

Consistent with recent years, environmental and social topics still make up a significant portion of the proposals put forth for shareholder vote. Relying on data from Deal Point Data, more than 200 such proposals have already been considered by shareholders. Within this broad category, climate change and greenhouse gas emissions appear to be the dominant topics of shareholder proposals in the 2025 proxy season. There have also been approximately 25 proposals related to lobbying, of which more than half related to reports or policies on political contributions.

According to Deal Point Data, median shareholder support for environmental proposals at this point in the season is approximately 12%, compared to approximately 19% in 2024, and approximately 21% in 2023. With respect to political spending and lobbying proposals, median support is approximately 21% at this point in the proxy season, a slight decrease from the approximately 23% median support in 2024. None of these environmentally based proposals, and only five proposals related to political spending and contributions, have received majority support of shareholders thus far.

Also noteworthy is the number of proposals in the so-called "anti-ESG" category – this includes proposals critical of, or that question the value of, company policies or initiatives related to topics such as climate risk or corporate social responsibility. Over 35 of these proposals were introduced, but support is low among shareholders, with a median support level of approximately 1.3% at this time.

In parallel with these mid-season developments, the early-2025 release of updated voting guidelines by a major proxy advisory firm and several of the largest institutional investors signaled a potentially meaningful pivot in how diversity-related matters will be assessed going forward. Most notably, on February 11, 2025, Institutional Shareholder Services ("ISS") announced that it will indefinitely suspend consideration of racial, ethnic and gender diversity factors when formulating its voting recommendations on director elections, expressly citing the January 2025 presidential executive order that seeks to curtail DEI programs across both the federal government and the private sector. Glass Lewis, by contrast, declined to revise its own guidelines and continues to apply the diversity-focused policies adopted for the 2024 season. In addition, institutional investors, like BlackRock, Vanguard and State Street, have each issued refreshed voting policies that largely recast language related to DEI—effectively softening any explicit emphasis on racial, ethnic or gender composition. While pro-DEI shareholder proposals continue to outnumber the so-called "anti-DEI" resolutions, the latter category has been growing and typically calls on companies to examine their DEI programs for potential legal, financial or reputational exposure; however, to date, overall support for anti-DEI proposals remains minimal. Also, since these revised voting guidelines were released after many 2025 shareholder proposal deadlines had passed—or were imminent—the observable impact on this season's filings and voting outcomes has been limited. Boards should prepare for the possibility that the new posture adopted by ISS and these large institutional investors could have a more pronounced effect on proposal volume, framing and support levels in the 2026 proxy season.

Finally, a topic to watch for in upcoming proxy seasons is proposals relating to the use of artificial intelligence ("AI") and companies' governance structures and processes relating to AI. The 2025 proxy season saw slightly fewer proposals than last year with a total of approximately 10 proposals on this topic. Although the number of proposals was small, and none of these proposals achieved majority support, transparency, policies and oversight of AI continues to be of interest to shareholders. As companies across virtually every sector begin to integrate generative and predictive AI tools into core business functions, shareholders are signaling that they expect boards to understand and actively manage the attendant strategic, legal and reputational risks. Therefore, AI will undoubtedly be a topic that shareholders will focus on in coming years, and companies that move early to build robust, board-level governance mechanisms are likely to find themselves better positioned to navigate the next proxy season.

Originally published by Harvard Law School Forum on Corporate Governance

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