Shareholder Setback: Microsoft Excludes Proposal Despite Lacking ‘No Action’ Assent
5 November 2025
Tech giant Microsoft has controversially blocked a shareholder proposal from its AGM agenda without written ‘no action’ support from the US Securities and Exchange Commission (SEC) ahead of its 5 December summit.
The company asked the SEC in August to back the exclusion of two shareholder proposals from its annual proxy statement, which was published on 21 October. However, one of the proposals – from well-known investor John Chevedden – did not get a response from the SEC relating to its ‘no action’ request before the high-profile US government closure commenced on 1 October.
While companies are not required to seek SEC approval before leaving shareholder proposals off their ballots ahead of annual meetings, permitting the agency to express an opinion is considered longstanding best practice. The SEC last responded to a no action request in mid-September.
The proposal from Chevedden called on Microsoft to have an independent chairman for its board. The roles of chairman and CEO at Microsoft are both currently held by Satya Nadella. In an exempt solicitation, Chevedden has urged fellow Microsoft shareholders to vote against the reappointment of Sandra Peterson, Chair of the Microsoft Governance Committee, over the exclusion his Rule 14a-8 shareholder proposal, which he feels was unjustified.
“The debate at Microsoft over the inclusion of shareholder proposals on the meeting agenda is reflective of broader challenges to the ability of shareholders to use their ownership rights to submit resolutions in the US, from changes in SEC guidance and pushback from companies as seen in ExxonMobil’s legal action,” said Thomas Bolger, Senior Stewardship Analyst at Minerva Analytics.
“Whilst companies are not required to obtain SEC approval and Microsoft has cited the government shutdown and internal legal interpretations, it is considered best practice to do so, and some may have concerns that this could set a precedent for other companies to follow,” he added. “The ‘vote no’ campaign initiated on governance committee chair Sandara Peterson by John Chevedden in response is reflective of this concern.”
The exempt solicitation said that Microsoft had effectively told the SEC that it would not wait for a decision on the tech firm’s no action requests and would issue its 2025 annual meeting proxy omitting the proposals, publishing its 2025 proxy on the same day as it wrote its letter to the SEC. It additionally stated that Microsoft had not given any evidence to Chevedden that it provided the SEC any indication in September or October that it was approaching its preferred deadline to issue its annual meeting proxy.
Microsoft had claimed in a letter sent to the SEC last month that Chevedden’s proposal was not submitted in a timely fashion, which is a legal basis for a resolution to be excluded, but Chevedden has countered that he submitted the proposal on time. Chevedden is a notable and frequent requisitionist of shareholder proposals, typically requesting bylaw amendments to boost shareholder rights, board accountability and corporate governance compliance, as was highlighted in Minerva Analytics’ Shareholder Proposal Voting Trends Report 2025 released in September.
“It has generally been a rule for decades that companies do not omit rule 14a-8 proposals from their proxies unless the SEC advises them that the SEC will take no action against the specific company for omitting a rule 14a-8 proposal,” Chevedden’s exempt solicitation read. “Sandra Peterson is the Chair of the Microsoft Governance Committee and bears ultimate responsibility for this unilateral omission of rule 14a-8 proposals from the 2025 Microsoft annual meeting proxy. This is a massive step backwards for shareholder rights and property rights.”
Earlier this year, the SEC rescinded Staff Legal Bulletin (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. The new guidance 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.
“If we let them get away with this because of a government shutdown, it will be one more reason for Trump and his corporate oligarch allies to continue their drive toward tyranny,” said James McRitchie, who joined Chevedden in urging Microsoft shareholders to vote against Peterson’s reappointment.
Microsoft faces six shareholder proposals at its 2025 AGM, with half of these resolutions being AI-related. One requests that the Board to report on risks of censorship and bias in generative AI, another that it reports on AI data usage oversight and a third that it reports on AI and machine learning tools for oil and gas development and production.
Microsoft similarly saw six shareholder proposals voted on at its 2024 AGM last December, with the request that the Board report to shareholders on AI and Machine Learning Tools for Oil and Gas Development and Production, one of two resolutions to be filed again at its 2025 AGM. As highlighted in Minerva Analytics’ recently released 2025 Proxy Season Review, this proposal gleaned 9.6% shareholder support and it will be interesting to see the shift in backing this year given heightened focus on both AI- and oil and gas-related risks.
The proposal at both the 2024 and 2025 AGMs was led by non-profit As You Sow. Last November, As You Sow called on Microsoft to acknowledge the risks it faces, including greenwashing, due to its partnerships with fossil fuel-linked companies in a filing with the SEC, as reported by Minerva Analytics. The non-profit suggested that the tech giant had “sought to market AI to companies such as ExxonMobil and Chevron as a powerful tool for finding and developing new oil and gas reserves and maximizing their production — all while publicly committing to reduce emissions dramatically”.
Two of the shareholder proposals at Microsoft’s 2025 AGM are human rights-focused, with one requesting that the board report on data operations in human rights hotspots and the other that it report on human rights due diligence. The final resolution requests the board to conduct a European Security Program Censorship Risk Audit.
There was meaningful support for several shareholder proposals at Microsoft’s 2024 AGM. A resolution requesting that the board report to shareholders on risks of weapons development was backed by 15% of votes, one requesting the board report to shareholders on AI Misinformation and Disinformation getting 18%, another requesting the board report to shareholders on Data Operations in Human Rights Hotspots gleaning 32% and a request that the board report to shareholders on Data Sourcing Accountability securing 35% support. While none of these proposals were successful, it will be interesting to see whether any proposals at Microsoft’s 2025 AGM receive similar or greater levels of shareholder support, especially given the heightened shareholder scrutiny of the company’s AI- and human rights-related activities.
The SEC’s current Chair Paul Atkins is a renowned shareholder rights critic and has previously personally voiced concerns about the “tyranny of the minority” in reference to shareholder proposals under Rule 14a-8 of the Securities and Exchange Act of 1934. He has also been expected to lean in favour of state regulations regarding shareholder proposals. Under his leadership, the SEC has adopted an increasingly hostile stance towards both shareholder rights and proxy advisors.
The Republican-run House Committee on Financial Services held a hearing entitled “Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value” purporting to assess whether the shareholder proposal process has been “co-opted by activist investors who prioritise narrow policy goals over maximising shareholder value”, as reported by Minerva Analytics. Earlier this month, Atkins also suggested that the “intersection” between the SEC’s Rule 14a-8 and state corporate law could be exploited to exclude environmental and social shareholder proposals, as reported by Minerva Analytics.
You can read more of our articles by clicking here.
Last Updated: 5 November 2025