On January 23, 2026, the Division of Corporation Finance (the “Division”) of the Securities and Exchange Commission issued several new and updated Compliance and Disclosure Interpretations (“C&DIs”). The new C&DIs include guidance related to proxy rules and executive compensation disclosures. Other C&DIs issued the same day address additional matters under the proxy rules, tender offer rules and schedules, and Securities Act matters, which we address in this Client Alert.
Eliminating Voluntary PX14A6G Filings for Exempt Solicitations. In welcome news to issuers, the Division revised its prior interpretative position and stated in revised Question 126.06 to the Proxy Rules and Schedules 14A/14C C&DIs that the Division will object to submission of a Notice of Exempt Solicitation on PX14A6G by persons who do not own more than $5 million of stock of the company with respect to which the filing is made. Although the Division previously has not objected to voluntary EDGAR filings submissions of Notices of Exempt Solicitation by beneficial owners of $5 million or less of relevant securities, the revised C&DI notes that the rule was designed to provide for public notice of exempt solicitations by large shareholders and provides for disclosure of only written soliciting materials “required to be submitted” pursuant to Rule 14a-6(g)(1). In practice, however, most PX14A6G filings are by shareholders who do not meet the ownership threshold, and in some cases may not own any shares of a company’s stock. As noted in the revised interpretation, in those cases the voluntary submission of such notices on EDGAR appears to be primarily a means to generate publicity. The revised interpretation does not directly address how the revised position will be monitored and enforced, but we note that Rule 15 of Regulation S-T provides the SEC with the authority to remove a submission from EDGAR if, among other things, the agency has reason to believe the submission is misleading or unauthorized. Notably, the new interpretation does not prevent shareholder proponents and others from conducting exempt solicitations through platforms other than EDGAR. However, whether or not filed on EDGAR, exempt solicitations remain subject to the anti-fraud provision of Rule 14a-9, which makes it unlawful for any soliciting materials to contain false or misleading statements or omissions of a material fact, and the conditions set forth in Rule 14a-2(b)(1)(vi), under which the exemption from having to file a proxy statement is not available to “[a]ny person who, because of a substantial interest in the subject matter of the solicitation, is likely to receive a benefit from a successful solicitation that would not be shared pro rata by all other holders of the same class of securities.”
Flexible Timing of Broker Searches. Under Rule 14a-13(a) and Rule 14c-7(a)(3), a company generally is required to perform a “broker search” at least 20 business days prior to the record date of any meeting of security holders. The “broker search” requires the company to notify banks, brokerage firms, and other intermediaries of the meeting record date and request information on the number of copies of the proxy required for distribution to beneficial shareholders, among other things. In new Question 133.02, the Division acknowledged changes in technology since the rule was adopted and indicated it would not object to a “broker search” performed less than 20 business days before the record date, as long as a company reasonably believes the proxy materials will be timely disseminated to beneficial owners and otherwise complies with Rule 14a-13. This new guidance will be useful for shareholder meetings when timing uncertainty (such as shifts in meeting dates or other factors, including SEC review of filings) previously required registrants to anticipate key milestones or conduct multiple broker searches in order to comply with the rule. Accordingly, going forward companies can work with their transfer agents and proxy mailing agents to determine an appropriate time for conducting the broker search.
Executive Compensation Disclosure in Spin-Offs.
The Division revised Question 217.01 to Regulation S-K C&DIs to address what executive compensation disclosures are required under Item 402 of Regulation S-K in the context of a spin-off transaction. The prior C&DI was focused on whether the spin-off should be treated as an initial public offering (“IPO”), which would require at least one year of historic executive compensation disclosure for the spin-off company’s (the “SpinCo”) future named executive officers. As a result, prior guidance did not appreciate that for spin-offs, unlike IPOs, historic executive compensation information often had nothing to do with a SpinCo’s actual executive compensation program but rather was completely determined and designed by its parent. The revised C&DI makes clear that the need for inclusion of historical executive compensation information depends on analysis of whether, before the spin-off, the SpinCo operated as a separate division or standalone business of the parent, and if so, whether there was continuity of management. As such, where the SpinCo is composed of portions of different parts of the parent’s business or will have new management after the spin-off, then historical compensation information generally need not be disclosed, and only post-spin-off compensation needs to be reported. In this case, the SpinCo need only report compensation awarded to, earned by, or paid to the SpinCo’s named executive officers in connection with and following the spin-off.
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We would like to thank Chad Kang from our Orange County office and Thomas W. Franck from our Washington, D.C. office for their work on this post.