Political Spending Clash: Shareholder Challenges Cadence Micromanagement Appeal
9 January 2026
Shareholder activist John Chevedden has argued that his proposal at US technology company Cadence Design Systems does not constitute “micromanagement” as the company has claimed in its resolution omission request.
According to Chevedden, Cadence had made its intentions clear to exclude his proposal – which aims to scrutinise the company’s political spending – from its proxy materials ahead of its 2026 AGM on the grounds that it would “micromanage” the firm in a no-objection request sent to the US Securities and Exchange Commission (SEC) late last week. Cadence’s micromanagement argument shows the impact of the commission’s controversial decision to not respond to company ‘no action’ requests to exclude shareholder proposals during the 2026 proxy season and its shift to Staff Legal Bulletin (SLB) 14M beginning to be felt.
Key Client Takeaways:
Questionable Cadence ‘Micromanagement’ Claim
- Cadence’s attempt to exclude a shareholder proposal on micromanagement grounds appears highly debatable. Chevedden argues the resolution seeks high‑level, decision‑useful disclosure, not operational control, and aligns with past SEC precedents where similar — or more detailed — political spending disclosure proposals were allowed to proceed.
SEC’s Pro-company Stance
- SEC rule changes since the start of 2025 — particularly the shift to SLB 14M and the decision not to respond to most no‑action requests — have significantly tilted the balance toward companies, making it much easier for them to label shareholder proposals as “micromanagement” and exclude them from proxy ballots
Rising Investor Pressure on Political Spending Disclosure
- A proposal from Chevedden on political spending attracted nearly 44% support at Cadence’s 2025 AGM, signalling strong and growing investor concern around political spending transparency. Shareholder backing in 2026 could increase further if voted on at the firm’s AGM amid escalating governance and reputational risk concerns.
Last year, the SEC made several changes to rules in favour of companies and weakening shareholders which look set to have a major impact on the 2026 proxy season. In November, the Commission’s decision to not respond to company ‘no action’ requests offers unprecedented discretion to corporate management and threatens to sideline investor voices on key ESG-related issues, as reported by Minerva Analytics.
In February, the SEC rescinded SLB 14L under Rule 14a-8, replacing it with new guidance in SLB 14M, as covered in Minerva Analytics’ Shareholder Proposal Voting Trends Report 2025. This reinstated prior staff guidance on micromanagement, permitting shareholder proposals to be excluded more easily by companies. This change saw a surge in ‘no action’ appeals, preventing proposals being voted on by shareholders at the AGMs of investee companies.
The case of Cadence could well mark the start of a trend which would overshadow the 2026 proxy season and signal a dangerous precedent for future seasons. The SEC’s introduction of SLB 14M makes it easier for companies to claim micromanagement, while its change to ‘no action’ request responses means companies are able to exclude resolutions with limited resistance.
Chevedden wrote in a letter this week that Cadence is “not entitled to omit the proposal on micromanagement grounds” given that it requests a “reasonable amount of detail, sufficient to allow shareholders to evaluate political spending risk”. His proposal requests that Cadence’s board prepare and annually update a report that discloses the company’s policies and procedures for making electoral contributions and expenses with corporate fund, either directly or indirectly. It also requests detail on monetary and non-monetary contributions or expenditures that could not be considered as an “ordinary and necessary” business expense. It does not encompass spending on lobbying.
Cadence faced a proposal from Chevedden which requested the company’s Board prepare a report to shareholders on the Company’s political spending at its 2025 AGM in May. The resolution captured meaningful shareholder support, being backed by just shy of 44% of votes cast despite the company advising investors to vote against it. Amid increasingly polarising politics in the second half of 2025, it could reasonably be expected that shareholder support of the resolution in 2026 would surpass that of the 2025 AGM. The date of Cadence’s 2026 AGM is yet to be confirmed.
Political donations disclosure is scarce in the US, with no formal legislation requiring political spending-focused information to be revealed to shareholders or other stakeholders. A US Supreme Court decision in 2010 allowed for limitless corporate and union spending in elections and classifying such activities as free speech, as reported by Minerva Analytics. This contrasts with the EU, where political spending disclosures by companies are more commonplace than from their US counterparts.
In May 2024, research revealed that seven out of the 27 EU countries had rules requiring political parties to reveal the identity of all their private donors, including companies, while more than half had rules requiring some degree of disclosure. This shows there is still significant room for growth, with France, Germany and Spain among the nations without rules requiring the disclosure of political donations to the public, but the disclosure requirements impacting companies in the EU is still greater than in the US. The UK has a law under which companies must get permission from their shareowners in advance to make political contributions in excess of £5000 (U$6747) in a 12 month period.
Chevedden highlighted that between 2012 and 2020, U$114 million in money spent on elections by groups not required to disclose their donors – also known as ‘dark money’ – passed through the US Chamber of Commerce alone. The letter also spotlighted the SEC declining to grant relief to AIG, Citigroup and Chubb in 2004 which had all sought to dismiss political contribution disclosure proposals on micromanagement grounds. It additionally pointed out that these three proposals which were voted on sought greater detail of disclosure over political contributions than Chevedden’s at Cadence.
Chevedden’s letter warned that political spending conducted with company treasury funds can “directly link companies’ brands with controversial candidates and issues important to consumers, workers and shareholders”. It also stated that indirect spending – such as via trade associations – has the “added peril of unwittingly supporting candidates whose platforms or actions are at odds with companies’ stated values and strategies”. It added that company executives could use company funds to “advance their own political agendas, without regard for whether donations are in the company’s best interests”.
The letter stated that the proposal “does not request overly granular disclosure; instead, it asks for only the information necessary for shareholders to evaluate Cadence’s political spending oversight and to assess the risks presented by Cadence’s political spending”. It emphasised that the company is “not entitled to exclude the Proposal on micromanagement grounds”.
According to research by the Interfaith Center on Corporate Responsibility – which is tracking no action letters and SEC no objection letters – Chevedden has had 25 other resolutions challenged by companies. This includes at least two on political spending at Huntingdon Ingalls Industries and Teledyne Technologies Incorporated. Some of Chevedden’s proposals do not have a listed subject so this number could in fact be higher. At least nine of his resolutions that companies are seeking no action relief for are governance focused.
You can read more of our articles by clicking here.
Last Updated: 9 January 2026