Companies may soon no longer need to include shareholder proposals in their proxy materials. On September 16, 2026, the SEC released a proposed rulemaking (Release No. 34-106383: Rescission of Rule 14a-8’s Federal Regulation of Shareholder Proposals and Amendments) that would eliminate Rule 14a-8, the rule that has required companies to include qualifying shareholder proposals in their proxy materials since 1942. The proposal reflects the Commission’s view that Rule 14a-8 exceeds its statutory authority and would return determinations about whether, when, and how a shareholder may present a proposal for a vote to state legislatures, state courts, and company governing documents. The same proposal includes companion amendments to Rule 14a-4 that would expand companies’ discretionary voting authority over shareholder proposals not included in proxy materials, while adding a check-box mechanism for individual shareholders to opt out of that discretionary authority.

Rule 14a-8 Rescission
If adopted, the rescission of Rule 14a-8 would reshape shareholder proposal practice. Federal rules would no longer require companies to include shareholder proposals in their proxy materials, and the question of when a proposal must appear would revert entirely to state law. The Commission observes that many of the original justifications for Rule 14a-8, including the assumption that compliance costs would be small and that state law would provide clear guidance on shareholder voting rights, have not held up. By its estimate, addressing a single shareholder proposal now costs companies between $20,000 and $150,000, and the annual volume of proposals has risen from fewer than 70 in the mid-1940s to more than 900 in 2024 and more than 750 in 2025. The Commission also notes that state law is often silent or ambiguous on matters the rule was designed to facilitate, leaving the SEC to fill gaps with federally created standards untethered to any particular state’s corporate code, a role Congress did not authorize.

The proposed companion amendments to Rule 14a-4 would expand companies’ discretionary voting authority over omitted shareholder proposals. When a company omits a shareholder proposal from its proxy card, it could still exercise discretionary authority to vote on that proposal in accordance with its disclosed intention (i.e., against the proposal) on behalf of shareholders who return the company’s card unless a shareholder checks a new opt-out box on the proxy card. This would shift control from the proponent, who can currently block discretionary authority by soliciting enough shareholders, to each individual shareholder. For boards and in-house counsel, proxy cards would need to be redesigned, and the mechanics of contested votes and zero-slate campaigns could change significantly.

Proxy Modernization
Issued the same day, the SEC’s Proxy Solicitation Modernization proposal (Release No. 33-11439) targets the mechanics of the proxy process. It would eliminate the requirement that companies deliver standalone annual reports under Rule 14a-3(b), remove the 20-business-day lead time for proxy statements incorporating documents by reference, rescind the Notice of Exempt Solicitation filing obligation under Rule 14a-6(g), shorten the minimum broker search period from 20 business days to five, and require proxy statement and information statement cover pages to include the name, address, and telephone number of a contact representative. 

The Commission frames these changes as overdue updates to rules adopted in the paper era, noting that incorporated filings are now freely accessible on EDGAR and that broker searches can be completed in as few as three days. The shortened broker search period, in particular, could accelerate proxy timelines for M&A transactions and contested elections, though the SEC acknowledges it may also reduce the advance notice available to dissidents and securities lenders to recall loaned shares before record dates. 

What this Means for Companies
Taken together, the rescission of Rule 14a-8, the expanded discretionary voting authority under amended Rule 14a-4, and the shortened broker search period could shift the balance of power in contested elections and M&A votes. As noted above, the shorter broker search window would further accelerate proxy timelines in these contexts. Meanwhile, the loss of Rule 14a-8 and the new discretionary authority framework would give companies greater control over which proposals appear on their proxy cards and how votes are cast. Companies facing active shareholder engagement should model the combined effect.

Both proposals remain at the comment stage and could change significantly before adoption. The SEC itself acknowledges that the transition could extend for several years, with elevated litigation costs, as state legislatures and courts work through unresolved questions about shareholder proposal rights that the federal rules currently govern.

Companies should assess how the proposals would affect their governance documents, shareholder engagement strategy, proxy card design, and contingency planning for contested votes. Comments on both proposals are due 60 days after Federal Register publication. Companies considering submitting a comment letter should identify the operational and legal issues that matter most before the comment periods close.

The Foley Hoag Capital Markets team is tracking both proposals closely and can help you assess their impact on your governance structures, shareholder engagement strategy, and upcoming proxy filings. If you are considering submitting a comment letter—or want to understand what these changes mean for your next annual meeting—please reach out to your Foley Hoag contact.