US SEC to keep hands off shareholder proposals, worrying activists

The change has not had a big impact so far. A count by law firm Freshfields found that as of June 15, 66% of known proposals were placed on proxies, compared to 59% last year.

But few people seem happy with the status quo. SEC Chairman Paul Atkins in July called CEOs "lackadaisical" about using tools like the new policy. Investor activists complain they often had to file lawsuits to ensure votes on some items.

"Instead of having the SEC operate as an informal referee, now investors will be forced to consider other options if a company decides to unilaterally omit a resolution with inadequate arguments," said Tim Smith, senior policy advisor for the Interfaith Center on Corporate Responsibility, whose members include resolution filers.

Marc Lindsay, managing partner of corporate governance at consulting firm Jasper Street Partners, said while Friday's change was expected, it effectively increases litigation risk for companies excluding proposals. Five of six lawsuits filed over exclusions led to favorable outcomes for proponents, he said.