We examine the wealth effects of the Security and Exchange Commission's (SEC) recent proxy access rule to facilitate director nominations by shareholders. We focus on how a firm's governance characteristics affect the market reaction to the rule. We find more negative announcement effects for firms with high probabilities of being targeted by shareholders. The announcement effects of the proxy access rule are positively related to the fraction of independent directors and the ratio of non-cash-based compensation, while announcement effects are inversely correlated with board size. Our findings suggest that the marginal shareholder does not perceive the proposed rule as value increasing.