Courtesy of Proxy Analytics Co-Founder, Steve Pantina:
I am writing with a follow up from the client alert we issued Monday regarding the SEC’s announcement on Rule 14a-8 no-action requests for the 2025–2026 proxy season. Earlier today, the SEC posted the first no-action response applying the new “reasonable basis” framework, and we wanted to share a brief update.
The new response (link here) involves a very traditional governance proposal submitted by John Chevedden at Air Products and Chemicals (APD), asking the company to adopt written consent rights. Consistent with the Staff Statement we summarized on Monday, the company supplemented its request with an unqualified representation that it had a reasonable basis to omit the proposal. The Division did not provide a detailed analysis but instead offered the response reproduced in full below:
“You represent that the Company has a reasonable basis to exclude the Proposal. Based solely on that representation, we will not object if the Company excludes the Proposal from its proxy materials.”
It is worth noting that the company did not challenge the substance of the proposal but instead relied on a more “black and white” basis for exclusion under Rule 14a-8(e)(2). As described in the company’s September 2 letter to the Staff, the shareholder proposal deadline for the company’s 2026 annual meeting was August 5, 2025 and the proponent’s initial and revised versions of the proposal were both dated and submitted on August 9, 2025, four days after the deadline.
Looking ahead, we expect the SEC to use similar boilerplate language in other Rule 14a-8 responses this season for exclusion bases other than Rule 14a-8(i)(1). The more interesting and practical questions will arise when companies seek to exclude proposals on more judgment-heavy bases, such as ordinary business or substantial implementation, and the Staff continues to respond using the same high level template.
This “response” to APD has been added to our No-Action Letter database with the status recorded as “No View,” to distinguish it from letters where the Staff articulates a specific view on the underlying basis for exclusion. We will keep you posted as additional no-action responses are issued and as we see how this new framework is applied to a wider range of proposals and fact patterns.