Proxy Season 2025: The Impact of Regulatory Pressures on Shareholder Proposals and Engagement
FTI Consulting and Morrison Foerster (MoFo) recently co-hosted a webinar reviewing the key themes from the 2025 proxy season, with a focus on how evolving regulations and political dynamics are shaping shareholder engagement. Garrett Muzikowski (FTI Consulting), Ryan Adams (MoFo) and Scott Lesmes (MoFo) explored the impact of “anti-ESG” sentiment and shifts in SEC guidance on shareholder proposals, no-action letters, and the relationship between boards and their shareholders. The discussion also offered practical insights into how companies are adjusting their proxy disclosures and engagement strategies to align with changing regulatory expectations and investor priorities.
Key Takeaways
Large Uptick in No Action Requests
While success rates were in line with historical averages, 2025 proxy season saw a significant increase in no-action requests submitted by companies to the SEC (+34% from 2024), coinciding with the publication of Staff Legal Bulletin No. 14M.
Micromanagement Arguments Win the Day
Companies argued micromanagement in 62 no-action requests in 2025, up from 41 in 2024 — and those arguments had a success rate of 66%, more than double the 2024 success rate of 31%.
Guidance on Schedule 13D and 13G Impacts Engagement
Large passive investors paused engagements in light of the updated guidance, and even when engagements resumed, dialogue was far more measured.
Companies Responded to Anti-DEI or Anti-ESG Scrutiny
A confluence of regulatory, political, and social media driven pressures led to intense scrutiny on ESG, and specifically DEI, practices by companies. Companies of all sizes and sectors revisited not only their external disclosures on these topics, but internal practices, too.
Big 3 Stewardship Teams Fragment Their Votable Shares
Each of BlackRock, Vanguard, and State Street have created two separate stewardship teams, and also now offer a set of their clients “voting choice”. This disaggregation will further complicate issuers’ engagement with their largest investors.
Get more insights in, “Reputational and Regulatory Pressures Loom Large on the 2025 Proxy Season”.
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