How Three Years of the SEC’s Universal Proxy Card Have Changed Proxy Contests

Author take

Punchy: A data-first reality check — universal proxy cards have reshaped contests so activists win more often but almost always only a little.

Summary

The SEC’s universal proxy card (UPC), effective 1 September 2022, lets shareholders mix-and-match management and dissident nominees. Sidley Austin analysed all late-stage director contests at Russell 3000 companies across five years before the UPC and the first three years under it to move beyond anecdotes.

Key findings: management still secures most contests, activists are more likely to win at least one seat but rarely more than one, activists’ top-end outcomes have sharply declined, elections have tightened (the fight for the last open seat is now often decisive), and proxy advisors/large index funds play a pivotal role.

Source

Source: https://corpgov.law.harvard.edu/2025/09/09/how-three-years-of-the-secs-universal-proxy-card-have-changed-proxy-contests/

Key Points

Management still “cleans up” in most contested elections: clean sweeps remain the plurality at 52% (down from 61%).
Activists more often secure at least one seat (48% of UPC votes vs 39% pre-UPC), but those wins are compressed toward single-seat outcomes (half of activist wins are only one seat).
Activist ceiling collapsed: shareholders supported at least half of the dissident slate in just 24% of UPC elections (down from 39%), and activist clean sweeps have essentially vanished.
Activist principals receive less support and are elected less frequently under the UPC (support for principals fell from 44% to 39%; election rate fell from 42% to 33%).
Elections are closer at the margin: the support gap for the last open seat tightened (average gap fell from 33% to 25%), making a small number of votes decisive.
Management’s edge often hinges on the decisive votes of large index funds (the “Big Three”) in tight races.
The UPC’s mix-and-match mechanic better aligns outcomes with voter preferences and reduces ‘wasted’ votes on partial dissident slates, lifting support for many management targets except at the bottom of slates.
Practical takeaways for companies: lower downside risk of taking a fight to a vote, rethink settlement offers (be wary of granting multiple seats or principal seats), and sharpen director-review and adviser choices because tactical moves matter more.

Context and Relevance

This study matters to boards, management teams and activists because contested votes influence settlement leverage and board composition even when contests are rare. The UPC has altered the strategic calculus: campaigns now often aim for limited, surgical change rather than sweeping board takeovers. Proxy advisors and large passive investors remain central gatekeepers — their recommendations and voting blocks can flip the last seat.

Why should I read this?

Short version — because this is the clearest, data-backed snapshot of what the universal proxy card actually did. If you worry about takeover risk, settlement strategy or who might join your board, this piece saves you digging through filings: management still mostly wins, activists get more single seats, and tiny vote swings now matter a lot. Read it so you know whether to lean into a fight, cut a deal, or tidy up board bench strength.

Further note

The authors offer to discuss the study’s novel conclusions; companies facing activism should consider experienced advisers early because UPC-era contests are more marginal and tactical choices can decide seats.