By Bryce Yancey




American companies may likely see an uptick in shareholder activists running proxy contests against the incumbent boards during the 2023 proxy season. This is largely due to the SEC amending Rule 14a-19 of the Security Exchange Act to require Companies to implement universal proxy cards in their board of directors’ elections, which went into effect on September 1, 2022.[1] Historically, a shareholder could vote for any combination of nominees they desired if they attended the director vote meeting in person.[2] However, proxy voting became the norm as time went on. The company and a dissident shareholder distributed separate proxy cards through this process.[3] Since shareholders could only submit one effective proxy card, they could not “mix-and-match” some nominees from the company’s slate and some from the dissident’s slate.[4]

However, due to the universal proxy cards being implemented, the company and dissident stockholders are now required to list all director candidates on their proxy voting ballots.[5] This new process is expected to test companies’ board members, specifically those who may be considered the “weaker” candidates, as it will be pitting a dissident’s best individual nominees against the company’s perceived “weakest” nominees.[6] Experts believe that this new system will significantly impact shareholder activism, particularly in the area of ESG (Environmental, Social, and Governance).[7] The universal proxy gives these activists and cause-related groups the ability not just to propose a slate of directors but also allows them the ability to pick and choose individual directors from both company and activist nominees.[8] However, even if they gain only a small amount of support, the case against an individual director serving on a board will be highlighted.[9] Furthermore, the top proxy vote service company, ISS, has stated that the new rules are a “superior” way for shareholders to vote and it is a “dramatically easier” and “cheap” way for activist shareholders to launch proxy fights against the incumbent board members they take issue with.[10]

It is still early in this new process, but recent results from proxy votes have shown this to be the trend. On December 16, 2022, Apartment Investment and Management Company (“AIMCO”) held its annual stockholders’ meeting in which Land & Building Investment Management (“L&B”) sought two out of three board seats.[11] This was the first contested election taken through to a vote following the implementation of the universal proxy rules and resulted in L&B winning one of the board seats.[12] The results of this vote show that stockholders were aware of this new rule implementation and used it to vote out an incumbent board member who had served on the board for 18 years.[13]

Companies and experts are still figuring out exactly what to do with this new process. What exactly is going to happen as the new proxy season draws nearer? How do incumbent boards combat this newfound power shareholders will have? There are a lot of changes that will likely be coming to the world of corporate governance, and this is only the beginning.




[1] Martha E. McGarry et al., The Universal Proxy Rules Are in Effect: Key Takeaways from Recent Proxy Contests and What to Watch, MAYER BROWN (Jan. 2023),

[2] Spencer D. Klein & Tyler Miller, Preparing for the Mandatory Universal Proxy Card and Its Potential Impacts on Shareholder Activism and Proxy Contests, MorrisonFoerster (Jan. 31, 2023),  

[3] Id.

[4] Id.

[5] McGarry et al., supra note 1.

[6] Id.

[7] Rich Fields & Rusty O’Kelley, Universal Proxy, Increased Activism and Director Vulnerability, HARV. LAW SCH. F. ON CORP. GOV. (Dec. 7, 2022),

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.