Stretching Rule 14a-8. The SEC’s suspension of its decades-long Rule 14a-8 no-action process has created a predictable result: some companies are taking far greater liberties in excluding shareholder proposals. Without the discipline of a substantive SEC staff response, company letters have become more aggressive, less carefully reasoned, and, in several cases, difficult to reconcile with long-established shareholder proposal practice.
The examples below all involve proposals filed by John Chevedden, arguably the most diligent shareholder proponent in U.S. history. For decades, Chevedden has used Rule 14a-8 to press companies on basic corporate governance rights and accountability measures. His proposals have often been mainstream, repeat-tested, and supported by substantial shareholder votes. That makes the quality of these exclusion arguments especially troubling.
How Could a Board Policy for an Independent Board Chair be Illegal?
Several companies argued, dubiously, that a proposal seeking an independent board chair policy would violate the law—even though the request concerned a policy, not a bylaw, and even though such policies commonly allow exceptions where the board determines noncompliance is appropriate.
Companies making this type of claim include:
- RTX Corporation (RTX)
- General Dynamics Corporation (GD)
- Thermo Fisher Scientific Inc. (TMO)
- Labcorp Holdings Inc. (LH)
- Fortinet, Inc. (FTNT)
A related argument came from Prologis, Inc. (PLD), which claimed it lacked the power to adopt a policy for an independent board chair. That position is difficult to square with the widespread use of board leadership policies across public companies.
Political Spending Disclosure: “Micromanagement” for a Mainstream Topic?
Political spending disclosure is hardly novel. It has been voted on at least 50 times since 2019 and won five majority votes in 2025 alone. Yet several companies claimed that such proposals micromanage the company.
Examples include:
- Cadence Design Systems, Inc. (CDNS)
- Fidelity National Financial, Inc. (FNF)
Calling this established topic “micromanagement” stretches the ordinary meaning of the term. Shareholders are not asking to dictate individual expenditures. They are asking for transparency about how corporate political spending is governed and disclosed.
“Substantial Implementation” Without Substantial Disclosure
Some companies relied on substantial implementation arguments even where actual disclosure appears minimal or nonexistent.
Teledyne Technologies Incorporated (TDY) claimed it had substantially implemented a political spending disclosure proposal by adopting a policy that does not appear to provide for disclosure of any political spending. That claim is especially hard to credit given that TDY scored 0 out of 100 in the 2025 CPA-Zicklin Index of Corporate Political Disclosure and Accountability.
Other companies made similar substantial implementation claims despite very low disclosure scores:
- EMCOR Group Inc. (EME) — Political Spending Disclosure, despite a CPA-Zicklin score of 8 out of 100
- American Tower Corporation (AMT) — Political Spending Disclosure, despite a CPA-Zicklin score of 31 out of 100
If a company discloses little or nothing about the requested subject, “substantial implementation” begins to look less like a legal argument and more like a label.
Director Elections and Shareholder Rights
Expeditors International of Washington, Inc. (EXPD) challenged a proposal seeking an enhanced majority vote requirement for director elections. This was a revised proposal topic submitted for the first time in 2026, yet the company still sought exclusion rather than allowing shareholders to vote.
Monolithic Power Systems, Inc. (MPWR) challenged a shareholder’s right to act by written consent proposal, arguing that the topic was too complex for shareholders to understand and therefore involved ordinary business. That argument is difficult to take seriously. Written consent proposals have been a standard shareholder-rights topic for more than a decade and have received multiple majority votes.
Why This Matters
These are not obscure or reckless proposals from an inexperienced filer. They are proposals from John Chevedden, whose long record has helped define modern shareholder governance campaigns. His work has repeatedly brought core accountability issues—majority voting, independent board leadership, written consent, special meetings, political spending disclosure, and related reforms—to shareholder ballots.
That is precisely why these exclusions deserve attention. If companies can keep such mainstream proposals off the ballot through thinly reasoned “no objection” letters, the practical value of Rule 14a-8 is greatly weakened.
Rebuttals were submitted to the SEC in most of these cases. But under the SEC’s current approach, the practical value of rebuttals has been reduced. The staff is not issuing the same type of substantive no-action determinations, and rebuttals submitted outside a very short window may not be included in the SEC’s public materials.
Many rebuttals can still be found by searching the company names on the SEC’s 2025–2026 Rule 14a-8 response page. These rebuttals would almost certainly have been more thorough had the traditional no-action process remained in place. Under the prior process, proponents had a stronger reason to develop full legal responses because the SEC staff might actually engage the substance. Now, companies can file sweeping exclusion theories with less fear of meaningful staff review.
Of course, companies remain free to reconsider after reading a rebuttal. They can engage with the proponent, negotiate changes, or simply allow shareholders to vote. In most of the examples above, they apparently chose not to do so.
The result is a weaker, less transparent Rule 14a-8 process—one in which shareholders may lose access to the proxy not because proposals are improper, but because companies face fewer practical constraints when making aggressive exclusion claims against even the most seasoned and diligent proponents.
Stretching Rule 14a-8: Guest Post from John Chevedden
Thanks to John Chevedden for this guest post discussing how some companies are stretching Rule 14a-8 beyond reason, taking advantage of the SEC’s suspension of substantive review of no-action requests.
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