Democrats will control both chambers of the 120th Congress, giving them control of the House agenda and the power to call regulators to hearings. For employers, expect more scrutiny, funding fights, and personnel decisions than new laws. For executive compensation, expect renewed pay ratio legislation and pressure on the SEC’s aggressive agenda, though Democrats are unlikely to stop it.
SEC disclosure reform. We expect the proposed rule to streamline executive compensation disclosures for large companies any day. Final versions of the rules already proposed this year could come by the end of 2026, before the new Congress convenes. Democrats can hold hearings, send letters, and push appropriations limits, but reversing a final rule requires the President’s signature.
Rule 14a-8. The SEC proposed to rescind Rule 14a-8 and shift the entire shareholder proposal framework to state law. Because a December 2025 executive order directed the SEC to consider rescission, Democratic oversight can shape the record and timing but is unlikely to change the outcome.
Legislation. The Tax Excessive CEO Pay Act (H.R. 5298), introduced by Sen. Bernie Sanders and Rep. Rashida Tlaib, would raise the corporate tax rate for CEOs who earn more than 50 times their median worker’s pay. Bills expire with each Congress, so expect it back in 2027 with more attention under Democratic control.
Stock buybacks. Sen. Elizabeth Warren (D-MA) helped secure Section 815 in the Senate’s FY2027 NDAA, which would bar stock buybacks and dividends for virtually all Department of Defense contractors unless they obtain a waiver tied to approved defense investment plans. Industry opposition is strong, but if it doesn’t make the final NDAA, expect Warren to reintroduce standalone legislation in the new Congress, possibly backed by the President.
Bottom line: Expect oversight, not legislation, over the next two years. Democrats hold the majority, but need the President’s signature, 60 Senate votes to overcome a filibuster, or two-thirds of both chambers to override a veto. Broad workplace mandates are still unlikely to become law— before 2029, that is.