investment policy, and you ask questions on how that persona would vote on X, Y, or Z,” he postulates. “Tat could be an interesting, powerful way for IR professionals to improve processes.” “Quality assurance around the use of AI is para-


mount,” states Chuck Callan, Chief Regulatory Officer at Broadridge. “Companies need to be convinced their use of AI for compliance purposes is ready for prime time.” Ultimately, it comes down to issuers assuring their


investor base that if AI is being used, the company has the proper oversight and usage policies in place. Te Conference Board reports that “with increasing investor focus on topics like AI, companies should be prepared for greater scrutiny and review the ef- fectiveness of their risk assessments related to AI use.” In 2023, only one AI shareholder proposal was filed. In 2024, this increased to 16 shareholder proposals. Tis year will likely set a new record.


Is That Really Your Salary? “As the political climate has shifted focus away from DEI and climate, I expect investors to scrutinize is- suers’ compensation practices to ensure alignment with shareholders’ experiences,” comments Valerio. Investors want to voice their opinions on some-


thing, so if DEI and ESG are no longer the core of their proposals, executive compensation may be further highlighted this proxy season. Te movie character Partridge certainly wanted to understand the con- nection between executive pay and performance. Perhaps the movie’s scriptwriters were foreshadowing decades ahead of their time. Te Conference Board reports that the 2025 proxy


season will be the third year that companies are required to make pay-for-performance disclosures under item 402(v) of Regulation S-K, which requires companies to disclose the relationship between ex- ecutive compensation and the company’s financial performance in a table that measures the five most recent fiscal years. “With several years of pay-for-performance data


now available, investors are likely to intensify their scrutiny of executive compensation alignment with company performance,” Te Conference Board re- ports in its “2025 Proxy Season Preview.” Inadequate


1 4 S P R I NG 20 2 5 ■ IR UPDAT E


pay-versus-performance disclosures that fail to pro- vide clear narratives and comprehensive disclosure information will almost certainly be targeted.


Even the SEC


recognizes that


companies will likely


receive more contradictory proposals this proxy season.


We’re at a Standstill – The “No Action” Process With such a divisive lineup of issues this proxy season, many companies may receive competing proposals. The proxy battle at American manu- facturing company, John Deere is an interesting and timely case study. John Deere received two competing shareholder proposals related to DEI; one from progressive shareholder activist group As You Sow, which proposed John Deere report on its efforts to ensure that no employees are excluded due to gender, race, or ethnicity in response to the company’s perceived shift away from DEI. A second proposal came from conservative group National Legal and Policy Center (NLPC), which asked that John Deere report any statistical differences in their hiring practices, arguing that the company’s hiring practices were discriminatory. In response, John Deere sought to exclude both


proposals from its proxy, arguing they were vague and not economically significant. Te SEC declined this request and the proposals went to a vote at the AGM in February. Shareholders by far rejected the NLPC proposal, with 98.7% voting against. John Deere noted, “We fundamentally believe that a diverse workforce enables us to best meet our customers’ needs and because of that we will continue to track and advance the diversity of our organization.” At similarly contested proxy fights this year, 98% of


Costco shareholders and 97.7% of Apple sharehold- ers rejected anti-DEI proposals. Te purpose of this article is not to advocate for any position in the DEI debate. Rather, this case study simply illustrates the potential divisiveness of this proxy season. Even the SEC recognizes that companies will


likely receive more contradictory proposals this proxy season. On February 12, 2025, the SEC’s Division of Corporate Finance issued Staff Legal Bulletin No. 14M, which expanded the ability of publicly traded companies to exclude shareholder proposals based on “economic significance” and “ordinary business.” Tis bulletin rescinded Staff Legal Bulletin 14L,


ni ri .org/ irupdate


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