What the Division of Corporation Finance ran was closer to a pricing service than a permission counter. Its letters never bound a court, but they gave a company a written read from someone other than its own counsel, obtained inside a single proxy season for the cost of a memo [1][2]. Remove it and the only forum that will tell a company whether its exclusion holds is a court, on the proponent's calendar rather than the issuer's, which is why the third instruction in the Cleary Gottlieb memorandum is to consider how the exclusion would read to a court [17].
A skeptic will say the staff already stopped giving substantive responses last season and nothing broke. Last season was indeed the first full run under this posture, scheduled to apply through September 30, 2026 [10], and the litigation was thin: adding up the cases Cleary describes gives six filings, of which three settled before any ruling, while of the three that reached a preliminary-injunction decision one court required inclusion and two denied relief [13][14][15]. Six suits across a full season of proposals is a small sample rather than a base rate a board can price against. Whether last season was the rule or a favourable draw is something the record does not yet say.
The more consequential change is which internal budget absorbs a mistake. Proponents' answers to exclusion last season were aimed at directors rather than at the legal department, citing the exclusion as a board oversight failure, threatening zero-slate campaigns, running vote-no campaigns and publicizing the decision through independent exempt solicitation portals, the last of these because Division guidance says staff will object to voluntary Notices of Exempt Solicitation on EDGAR [11][12]. When the currency of being wrong is support for the directors standing for election, the call stops being a technical question about whether a ground fits the proposal [5].
The housekeeping deserves a line, because it breaks templates. The dedicated shareholder proposal email address is no longer active, notices and questions route through the online Shareholder Proposal Form, and the Rule 14a-8(j) notice to the Commission with a copy to the proponent is still required [7]. The explanation requirement survives as well, so companies keep drafting a reasoned exclusion argument for a reader who has committed to saying nothing back [6]. The one closure that costs little in practice is the improper-under-state-law ground, which Chair Atkins has noted went unused last season [4].
Separate this quarter from this decade. This quarter, every marginal exclusion is a judgment made without a second opinion, and the working question is whether the proposal is cheaper to print than to fight, which is the weighing Cleary sets out against the cost and distraction of a notice and a dispute [16]. This decade, the question is the rulemaking: Cleary expects the current posture to hold until the SEC completes its planned Rule 14a-8 revision, unless pending litigation over last season's process revision forces a change sooner [9]. The exclusions companies take this season become part of the record both sides will cite when that rule is finally written.
