showing the SEC was shifting its prior stance on the “No Action Process” to enable companies to continue to operate their businesses without undue interference from shareholder groups. It will be interesting to see whether there is a significant uptick in “No Action” letters submitted this proxy season. According to a 2025 proxy season preview authored
by PWC, amongst the Russell 3000, as of February 28, 2025, 324 “No Action” letters had been submitted by issuers thus far this proxy season. Tis compares to a total of 197 in 2024. In addition, of the proposals submitted in the first two months of the year, 99 out of the 321 E&S proposals submitted related to diversity and human capital.
Can You Hear Me Now? Changes to Schedule 13D and 13G Issuers are faced with the dilemma of responding to competing interests on their proxy, while investors are grappling with whether or not to speak with man- agement teams for fear this may trigger a 13D filing. On February 11, 2025, the SEC updated its Compli-
ance and Disclosure Interpretations (C&DIs) related to the interpretation of Exchange Act Sections 13(d) and 13(g). Te changes note that if a shareholder owns more than 5% of the outstanding shares in a company and engages with that issuer in such a way that they are viewed as influencing the company’s policies, such as sharing their preferences for board structure, ESG, or DEI, the issuer must disclose its ownership in the company in a 13D (i.e., activist filing) rather than a 13G filing. In response to this update, BlackRock and Vanguard immediately halted their off-season proxy outreach, noting to issuers that they must first interpret these changes before proceeding with conversations. Institutions must now “toe the line carefully about
what to communicate,” says Frank. He expects that while funds will be less willing to share their views than in the past, the result will be “more of a layer of shade, than a blindfold.” Conversations will still happen, though the dis-
cussed topics will be restricted. While issuers may feel relieved not to be required to have such conversations, Frank believes that fewer conversations will be a negative for the equity markets. “Tere’s a mutually
ni ri .org/ irupdate
beneficial arc to having these conversations,” he says. Moote concurs, elaborating that due to these
changes, “We will transition from a dialogue to a monologue with large index funds.” Consequently, if a fund votes against an issuer during proxy season, there will be less advance notice of this action and a
“Boring AGMs are good AGMs. The key to success is doing 80-90% of the work leading up to the proxy; anticipate shareholder concerns, know your audience, and reach out and engage." Jun Frank, ISS Corporate
decreased understanding of the reasons behind the fund’s stance.” In essence, we will experience diminished trans-
parency and specificity compared to the past. Of note, BlackRock and Vanguard resumed their stew- ardship meetings roughly one week after the SEC C&DI updates.
Security at Annual Meetings While we’ve covered several key topics for this upcom- ing proxy season, one that may be new to the scene is the safety of our executive teams. Following the death of United Healthcare CEO Brian Tompson, issuers are reconsidering the security risks inherent to public company meetings. Ann Bowering, U.S. CEO of Computershare Issuer
Services, explains that the security measures imple- mented at annual meetings can differ significantly from one company to another, but when “these gath- erings take place in public venues, such as hotels or convention centers, we observe that metal detectors and dedicated security teams are commonly used.” She says that when preparing for these meetings,
IR UPDAT E ■ S P R I NG 20 2 5 1 5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43
