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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 728
Introduced by Kauth, 31.
Read first time January 07, 2026
Committee: Banking, Commerce and Insurance
A BILL FOR AN ACT relating to companies; to define terms; to require that1
proxy advisors disclose whether a written financial analysis was2
used for proxy services; to provide for enforcement under the3
Uniform Deceptive Trade Practices Act; and to provide a civil cause4
of action. 5
Be it enacted by the people of the State of Nebraska,6
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Section 1. For purposes of sections 1 to 3 of this act:1
(1) Company means a publicly traded for-profit corporation, limited2
liability company, partnership, or other business entity that is3
organized or created under the laws of this state, has its principal4
place of business in this state, or is a foreign entity that has made a5
company proposal to become a domestic entity, whether by merger,6
conversion, or otherwise; 7
(2) Company proposal means any proposal made by a company to its8
shareholders that is included in the company's proxy statement including,9
but not limited to, director nominations or elections, or any proposal10
relating to director nominations or elections, executive compensation,11
corporate transactions, corporate structure, auditor selection, or12
company policy on any subject; 13
(3) Default recommendation or policy means a system, set of rules,14
principles, or guidelines designed to assist with voting decisions on any15
company proposals or proxy proposals; 16
(4) Proxy advisor means a person who provides a proxy advisory17
service for compensation to shareholders of a company or to other persons18
with authority to vote on behalf of shareholders of a company;19
(5) Proxy advisory service means any of the following services that20
are provided in connection with or in relation to a company or are21
provided to any person in this state: 22
(a) Advice or a recommendation on how to vote on a company proposal23
or proxy proposal; 24
(b) Proxy statement research and analysis regarding a company25
proposal or proxy proposal; or 26
(c) Development of proxy voting recommendations or policies27
including establishing default recommendations or policies;28
(6) Proxy proposal means any proposal made by a shareholder of a29
company that is included in the company's proxy statement including, but30
not limited to, a proposal relating to any of the subjects that could be31
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covered by a company proposal; 1
(7) Shareholder includes a shareholder, unitholder, limited partner,2
or other equity owner of a company; and 3
(8) Written financial analysis means a written document that:4
(a) Analyzes the expected short-term and long-term financial5
benefits and costs to the company of implementing a company proposal or6
proxy proposal; 7
(b) Concludes what vote or course of action is most likely to8
positively affect shareholder value; and 9
(c) Explains the methods and processes used to prepare the analysis10
including the experience and geographic location of the personnel who11
formed the recommendation. 12
Sec. 2. (1) If a proxy advisor makes a recommendation against13
company management on a company proposal or proxy proposal or makes a14
default recommendation or policy involving votes against company15
management on company proposals or proxy proposals and the proxy advisor16
does not do so based on a written financial analysis, the proxy advisor17
shall: 18
(a) Concurrently with providing the proxy advisory service, include19
a clear and conspicuous disclosure to each shareholder, or entity or20
other person acting on behalf of a shareholder receiving the proxy21
advisory service that: 22
(i) Identifies the service being provided; 23
(ii) Identifies the recommendation or policy at issue; and24
(iii) States that the proxy advisory service has made the25
recommendation or policy without doing so based on a written financial26
analysis regarding the impact of that recommended action on company27
investors that: 28
(A) Analyzes the expected short-term and long-term financial29
benefits and costs to the company of implementing the company proposal or30
proxy proposal; 31
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(B) Concludes what vote or course of action is most likely to1
positively affect shareholder value; and 2
(C) Explains the methods and processes used to prepare the analysis,3
including the experience and geographic location of the personnel who4
formed the recommendation; 5
(b) For a proxy advisory service described in subdivision (5)(a) or6
(b) of section 1 of this act, concurrently with providing the proxy7
advisory service, provide the disclosure under subdivision (1)(a) of this8
section to the board of directors of each company that is the subject of9
the service; and 10
(c) While any proxy advisory services described in this subsection11
are being provided, publicly and conspicuously disclose on the home or12
front page of the proxy advisor's website a statement that the advisor's13
proxy advisory services include one or more services that involve14
recommendations or policies against company management on company15
proposals or proxy proposals that are not made based on a written16
financial analysis regarding the impact of that recommended action on17
company investors that: 18
(i) Analyzes the expected short-term and long-term financial19
benefits and costs to the company of implementing the company proposal or20
proxy proposal; 21
(ii) Concludes what vote or course of action is most likely to22
positively affect shareholder value; and 23
(iii) Explains the methods and processes used to prepare the24
analysis, including the experience and geographic location of the25
personnel who formed the recommendation. 26
(2) If a proxy advisor makes a recommendation against company27
management on a company proposal or proxy proposal, or makes a default28
recommendation or policy involving votes against company management on29
company proposals or proxy proposals, and the proxy advisor does so based30
on a written financial analysis, the proxy advisor shall:31
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(a) Concurrently with providing the proxy advisory service, include1
a clear and conspicuous disclosure to each shareholder, or entity or2
other person acting on behalf of a shareholder, receiving the proxy3
advisory service that: 4
(i) Identifies the service being provided; 5
(ii) Identifies the recommendation or policy at issue;6
(iii) States that the proxy advisory service has made the7
recommendation or policy based on a written financial analysis that:8
(A) Analyzes the expected short-term and long-term financial9
benefits and costs to the company of implementing the company proposal or10
proxy proposal; 11
(B) Concludes what vote or course of action is most likely to12
positively affect shareholder value; and 13
(C) Explains the methods and processes used to prepare the analysis,14
including the experience and geographic location of the personnel who15
formed the recommendation; and 16
(iv) States that the analysis is available upon request;17
(b) Make such analysis available within a reasonable time to any18
client of the proxy advisory service upon request; and19
(c) For a proxy advisory service described in subdivision (5)(a) or20
(b) of section 1 of this act, concurrently with providing the proxy21
advisory service, provide a copy of such analysis to the board of22
directors of each company that is the subject of the service.23
Sec. 3. (1) A violation of section 2 of this act constitutes a24
deceptive trade practice under the Uniform Deceptive Trade Practices Act25
and is subject to any remedies or penalties available for a violation26
under the Uniform Deceptive Trade Practices Act. The Attorney General may27
exercise all investigative powers under the Uniform Deceptive Trade28
Practices Act if the Attorney General has reason to believe a violation29
has occurred, is occurring, or is about to occur. 30
(2) In addition to enforcement under subsection (1) of this section,31
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any person aggrieved by a violation of section 2 of this act may bring a1
civil action seeking a declaratory judgment or injunctive relief against2
a proxy advisor who violates such section. Not later than the seventh day3
after the date on which an action is brought under this subsection, such4
person shall provide written notice to the Attorney General, who has a5
right to intervene in the action. 6
(3) For purposes of this section, an aggrieved person includes:7
(a) A recipient of proxy advisory services provided by the proxy8
advisor; and 9
(b) A company, or any shareholder of such company, that is the10
subject of proxy advisory services described in subdivision (5)(a) or (b)11
of section 1 of this act provided by the proxy advisor.12
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