Last week the SEC made two significant and important changes that relate to shareholder proposals and institutional shareholder engagement. These changes have immediate impact and are important for you to consider.

  • Staff Legal Bulletin 14M: The bulletin rolls back SLB 14L significant social policy inclusion, largely reverting back to how the SEC evaluated relevance of a shareholder proposal before SLB 14L. The revisions may allow more proposals to be excluded if an issuer can demonstrate that the submitted proposal relates to “ordinary business” or is not “economically relevant”. The bulletin also clarifies that a board analysis of the proposal is not required when filing for No-Action Relief.
    • Possible Action: If you have received a shareholder proposal this year you should consider how this change may impact your approach. We are available to provide further guidance and perspective.
  • 13D-G Regulatory Reporting Change: The SEC has recently updated its rules regarding beneficial ownership reporting under Section 13D. If an institutional owner that holds more than 5% of outstanding shares engages with an issuer in a way that pressures the issuer to adopt certain measures or ties support for directors to adoption of certain provisions, it must disclose its ownership in a Schedule 13D filing.
    • Possible Action: Institutional managers are quickly assessing and determining how to handle engagements with issuers. There has been reports that certain managers are halting all engagements. If you had planned to, or are currently undertaking, engagements please let us know. We’re currently advising clients on how to best manage the situation given this changing situation.

More perspective and insight can be found in our 2025 proxy season webinar hosted with our partners at Latham & Watkins, including on commentary on both these developments, access this webinar recording here. We also recapped the most recent proxy advisor and investor guideline updates, including the unanticipated update by ISS to suspend the application of its director diversity vote recommendation policy. Other advisors may be doing the same as well.

 

If you have questions or comments, please email info@georgeson.com or call 212 440 9800.

 

This notice is provided by Georgeson for general informational purposes only and is not intended and should not be construed as legal, regulatory, financial or tax advice. Georgeson is not licensed or authorized to practice law in any jurisdictions and hence does not provide any legal advice and it does not hold itself out as doing so. Neither Georgeson nor any of its affiliates or contributors accept any responsibility or liability for the quality, accuracy or completeness of any information contained in this notice. It is important that you seek independent professional advice relating to the subject matter of this notice before relying on it.