On The Proxy Season Blog this week, Liz has been sharing thoughts and helpful tips this week on the “minor quandary” (credit to Gibson Dunn for that characterization) that companies are facing for beneficial ownership reporting in their proxy statements in the wake of updated ownership reports filed late last week by Vanguard entities related to Vanguard’s internal realignment. They reported that Vanguard Group had zeroed out its holdings, but some of those holdings were likely reallocated to Vanguard Portfolio Management, which hasn’t yet had to make Schedule 13G filings for ownership of companies between 5% and 10%. For companies working on their proxy statement beneficial ownership table, Liz explained:

Instruction 3 to Item 403 permits companies to rely on a recent Schedule 13D/G for the table, but it also puts an obligation on companies to update the table if they know or have reason to believe that the information is inaccurate – or that a statement or amendment should have been filed and was not.

While we’re not yet at the point where these filings should have been made, some companies do have reason to believe that omitting a Vanguard entity completely would be inaccurate. Hence, the “minor quandary.” Luckily, the Gibson Dunn blog has suggestions. First, it notes:

Vanguard has voluntarily provided an Illustrative Beneficial Ownership report to assist market participants with understanding how beneficial ownership of portfolio company securities might have been attributed to VCM and VPM had the internal realignment occurred on or immediately prior to December 31, 2025. However, VGI states that this information is derived from VGI’s publicly available data as of December 31, 2025, including VGI’s Form 13F filings, and notes that the information does not replace or modify any official beneficial ownership information previously filed with the SEC. Moreover, in Corporation Finance Interpretation 229.02 under Regulation S-K, the SEC Staff advised companies not to rely on Schedule 13F filings when reporting beneficial ownership under Item 403(a) of Regulation S-K.

So, for companies that haven’t yet finalized their proxy statements:

[W]e believe one reasonable approach would be to (1) report the beneficial ownership indicated in the prior (not the most recent) Schedule 13G filed by VGI, particularly if the most recent VGI beneficial ownership filing occurred after the date that the company uses for its beneficial ownership table, and (2) state in a footnote to the beneficial ownership table that shares previously beneficially owned by VGI may now be owned by subsidiaries or divisions of VGI.

They also suggest:

– Based on language in the most recent VGI Schedule 13G filings, that footnote disclosure could read as follows: “The Vanguard Group subsequently reported that due to an internal realignment it no longer has, or is deemed to have, beneficial ownership over Company securities beneficially owned by various Vanguard subsidiaries and/or business divisions.”

– In order to track other language in the VGI Schedule 13G filings reiterating that other VGI subsidiaries or divisions may now own company shares, the footnote might also state: “The Vanguard Group also reported that certain subsidiaries or business divisions that formerly had, or were deemed to have, beneficial ownership with The Vanguard Group, will report beneficial ownership separately (on a disaggregated basis).”

– More generally, companies should carefully review the language that precedes their beneficial ownership table to make sure that it has an appropriate “knowledge” qualification, and that it accurately describes the date(s) as of which beneficial ownership is being reported.

Check out the full blog for more. For example, it also explains why companies that had already finalized their definitive proxy statements prior to Vanguard’s recent 13G filings generally do not need to update their beneficial ownership disclosures.

– Meredith Ervine