The 2025 proxy season highlighted the evolving landscape of financially material issues facing companies, with artificial intelligence emerging as a central strategic concern alongside enduring governance fundamentals such as board effectiveness and strategic oversight, CEO succession planning and executive compensation. Given the evolving regulatory landscape and market uncertainty, we view continued engagement as essential to understanding how companies are positioning themselves for sustained value creation.
For the sixth consecutive year, we continued our NB Votes program, underscoring our commitment to transparency with both clients and portfolio companies. NB Votes is an advance vote disclosure practice through which we regularly disclose our proxy voting intentions and rationales on multiple topics in advance of shareholder meetings. NB Votes addresses a broad range of subjects across nine key governance and engagement categories. The votes pertain to what we believe are financially material issues, and our voting intentions represent what we believe are in the best financial interests of our clients. In 2025, we disclosed our voting intentions and rationales on proposals at 38 meetings and opposed the company’s recommendation in 55% of them. Our belief in proxy voting transparency is global, with 18% of our votes last year at meetings involving non-U.S. companies.
This article provides key highlights from our 2025 voting season, with a focus on published votes where we staked new ground or addressed issues of particular financial importance to our clients. While routine management items accounted for approximately 98% of all proposals, we selectively published votes that reflect our distinct perspectives on matters we view as especially important—such as succession planning, alignment of executive compensation with long‑term shareholder value creation, and the protection of minority shareholder rights. Shareholder proposals represented the remaining 2% of items voted, with artificial intelligence emerging as a notable theme amid a broader decline in overall shareholder proposal activity and support levels. We view this report as part of our ongoing effort to advance strong corporate governance practices, and we encourage readers to review not only our full set of published 2025 votes, but also our voting record across prior years.
Key Themes From the 2025 Proxy Season
AI in Focus
Artificial intelligence remains in the spotlight for companies, investors and markets. In 2025, we saw AI rapidly move from pilot projects to critical components of business strategy as evidenced by the increase in company disclosures regarding AI oversight and governance philosophy, as well as the inclusion of material AI-related risks in company annual reports and 10-K filings, signaling company expectations of greater scrutiny from stakeholders and regulators. Such scrutiny materialized through a rise in shareholder resolutions in 2025 regarding AI-related material risks and opportunities, such as board oversight, child safety, ethical data acquisition and end-use due diligence.
Ahead of shareholder meetings at companies such as Microsoft and Meta Platforms, we supported shareholder proposals aimed at strengthening the governance and disclosure of AI-related risks and opportunities, reflecting our view that AI-related oversight and risk management are increasingly financially material to long-term shareholder value at both companies. Specifically, at Microsoft, we believe continued leadership in AI innovation must be matched by robust human rights due diligence across AI and cloud end use to help mitigate regulatory, legal and reputational risks that could adversely affect durable value creation. At Meta, while the breadth of its disclosure is substantial, we believe the current format and organization of these disclosures could be improved. Specifically, we believe more comprehensive and consolidated reporting on these matters would enhance clarity, accessibility and decision-usefulness. Clearer articulation of governance structures, executive accountability and oversight processes would, in our view, strengthen market confidence, support more informed capital allocation decisions, and facilitate constructive engagement with policymakers and industry peers as AI becomes increasingly embedded in the company’s business model.
In 2025, we saw 23 AI-related proposals at 16 companies. Across sectors and geographies, companies are increasingly adopting and embedding AI into their systems and products. While adoption rates may vary among sectors, given the nascency and accelerated pace of AI development coupled with its growing pervasiveness, we believe AI’s financial impact will become increasingly material to varying degrees across the market. For this reason, we have been engaging with companies directly, outside of proxy season, to understand their AI-related policies and governance, and how they will seek to insulate their companies from AI-related risks.
Protecting Minority Shareholder Rights
Traditional corporate governance remains central to business management. In 2025, governance proposals saw higher volume and support than in previous years. Several companies put forth proposals to improve corporate governance practices aimed at enhancing shareholder representation and alignment.
At Verisk Analytics, a data analytics and risk assessment company, management introduced proposals to eliminate supermajority provisions and adopt the right to call special meetings. We viewed this as a continued response to shareholder feedback, including our multiyear engagement efforts with management. Following our engagement, in 2023 the company implemented material changes to its business makeup and corporate strategy and the adoption of what we believe to be best-in-class corporate governance structures, such as a declassified board, the appointment of an independent chair, and the incorporation of return on invested capital (ROIC) in the long-term incentive program. We also encouraged the board to disclose an individualized director skills matrix, which they began to publish in 2024.
While we file shareholder proposals only in rare and exceptional circumstances, we believed such action was warranted at Lions Gate Entertainment Corporation, a film and television production company. Driven by our belief that “one share, one vote” is a foundational principle of effective corporate governance, we submitted a proposal regarding recapitalization at the 2023 AGM. We were pleased to see that the proposal received majority support from shareholders, prompting the company to review the potential changes to its dual-class share structure. The company later concluded that a one-share, one-vote structure would strengthen its governance profile by aligning the voting power and economic interests of all shareholders, streamline its capital structure, and potentially increase its attractiveness to retail and institutional investors who may be unwilling or unable to invest in dual-class structures. When the company completed the separation of its STARZ business in May 2025, both standalone, publicly traded companies adopted a single class of stock structure.
Shareholder proposals regarding the adoption of special meeting rights, simple majority voting and board declassification were also voted on at companies including Teledyne Technologies, Albemarle and IDEXX Laboratories, and received majority support from shareholders.
Succession Planning
Corporate boards play a critical role in acting as fiduciaries to protect shareholder interests by overseeing management and governance of an organization, including strategic oversight and robust CEO succession-planning processes.
At the 2025 contested election at Air Products and Chemicals, an industrial gasses company, both the CEO succession plan and overall corporate strategy, particularly capital allocation and governance, were in focus. In January 2025, we supported the election of an alternate slate to the APD board because we believed their additive skills—including C-suite experience, capital allocation expertise in high capital-intensive industries and decades-long experience in the industrial gases sector—would help refocus the board on CEO succession planning. We also believed their expertise would better align the board with shareholder interests, particularly by strengthening the business through more disciplined capital-allocation decisions and a shift back to lower-risk, higher-return projects of the core business. Three of the four director candidates were nominated to the board. Following the vote, the company also announced the separation of the CEO and chair roles, and subsequently named a new CEO in February 2025.
At Morgan Stanley, succession planning had been a major focus for the board for several years. In our view, this successfully culminated with the appointment of Edward (Ted) Pick as CEO and the retention of key business leaders through the transition. Our vote in support of the reelection of members of the Compensation, Management, Development and Succession (CMDS) Committee was intended to communicate and highlight best practices, as well as key elements that contributed to the seamless transition, such as the development and retention of key talent, transparent communication with stakeholders and a time-bound, focused transition period.
Aligning Executive Compensation With Long-Term Shareholder Interests
Post-pandemic disruptions, inflationary pressures, and geopolitical and policy volatility have heightened competition for top talent, as the responsibilities of corporate management teams become increasingly complex and demanding, and subsequently have driven up pay levels needed to attract and retain top talent. While we believe compensation plans must be designed to attract and retain skilled executives, they should also be tied to performance metrics related to the medium- to long-term business strategy articulated by executives and be sufficiently rigorous.
At Toro Company, an equipment and machinery manufacturer, the compensation committee made changes to the long-term incentive plan, under which performance metrics for performance share units (PSUs) now include 60% return on invested capital (ROIC) and 40% cumulative revenue over three years. Given our multiple discussions with the company regarding our preference for the reincorporation of a returns-based metric in the compensation program to improve alignment between the pay plan and the company’s capital allocation strategy, we were pleased by the company’s responsiveness to our feedback to implement a returns-based metric in the executive compensation plan.
At Element Solutions, a specialty chemical company, we have had concerns regarding the use of board discretion to increase payouts for unmet targets under the short-term incentive plan. 2025 raised additional concerns with the removal of cash return on investment (CRI) from the long-term incentive plan in favor of adjusted earnings per share (EPS) with a relative total shareholder return (TSR) modifier that allows for a 100% payout if performance is within the 25th – 75th percentile. We do not view this as a sufficiently rigorous performance hurdle. Rather, we believe the inclusion of a profitability metric, like CRI, would be more appropriate given the company’s high free cash flow (FCF) conversion and capital allocation philosophy, and that its incorporation would better maintain discipline around future capital allocation decisions.
Looking Ahead
As we look further into 2026, market volatility is generally expected to persist—driven by evolving trade and fiscal policies, regulatory fragmentation, the speed of disruption of AI adoption and shifts in SEC guidance. Most recently, the SEC announced that it will not respond substantively to no-action requests by companies to exclude shareholder resolutions under Rule 14a-8. The onus will now be on companies to discern and assess risks from excluding shareholder proposals from their ballots, and the alternate strategies proponents may employ, including but not limited to “vote no” campaigns, voting against directors and submitting binding proposals.
In our view, these dynamics underscore the need for strong, independent boards equipped with relevant and diverse skillsets to navigate the dynamic business landscape while maintaining strategic clarity. Transparent communication with investors could be critical as companies balance growth ambitions with strategic risk management. At the executive level, heightened uncertainty and competitive pressures may sustain upward momentum in executive compensation, as boards prioritize the retention of key talent capable of providing stability and weathering volatility. Compensation committees will likely also face challenges in setting accurate, long-term incentive goals amid short-term economic headwinds and uncertainty. On behalf of our clients, we intend to continue to engage with companies regarding best practices as they navigate an increasingly complex regulatory and market environment.
