Tag: proxy advisory firm SEC proposal
A “speed bump” for proxy advisory firms instead of company pre-review?
The FT is reporting that the SEC is abandoning a key component of its proposal to add new disclosure and engagement requirements for proxy advisory firms, such as ISS and Glass Lewis. (See this PubCo post.) According to the report, the SEC has “scrapped the portion of the proposal that would have forced proxy advisers—led by Institutional Shareholder Services and Glass Lewis—to submit their voting recommendations to companies for checking before distributing them to investors in advance of shareholder meetings.” The proposal had received substantial pushback, including from the Council of Institutional Investors and even the SEC’s own Investor Advisory Committee. However, the FT appears to point the finger, or attribute the victory, depending on your point of view, primarily to hedge fund activists “who court proxy advisers’ support when fighting for board seats.”
Watchdog calls for investigation of “fishy” letters
In November, the SEC voted to propose amendments to add new disclosure and engagement requirements for proxy advisory firms and to “modernize” the shareholder proposal rules by increasing the eligibility and resubmission thresholds. (See this PubCo post and this PubCo post.) At the SEC open meeting, in explaining his perspective on the proposals, SEC Chair Jay Clayton indicated that, following the SEC’s proxy process roundtable (see this PubCo post), the SEC had received hundreds of comment letters, but there were seven letters that were most striking to him. Clayton seemed to be genuinely moved by these letters, ostensibly submitted by various Main Street investors, a group that Clayton considers to be core to the SEC’s protective mission. (See this PubCo post.) But, according to Bloomberg, there was something not quite right—something “fishy”—about those letters. (See this PubCo post.) Now, Bloomberg reports, a Democratic watchdog group is calling for an investigation into what is behind the “fishy” letters. And, as reported in this Bloomberg article, Clayton has said that the SEC is investigating.
Did the SEC Chair get punked?
You might recall that, earlier this month, the SEC voted to propose amendments to add new disclosure and engagement requirements for proxy advisory firms and to “modernize” the shareholder proposal rules by increasing the eligibility and resubmission thresholds. (See this PubCo post and this PubCo post.) At the SEC open meeting, in explaining his perspective on the proposals, SEC Chair Jay Clayton indicated that, following the SEC’s proxy process roundtable (see this PubCo post), the SEC had received hundreds of comment letters, but there were seven letters that were most striking to him. Clayton seemed to be genuinely moved by these letters, ostensibly submitted by various Main Street investors, a group that Clayton considers to be core to the SEC’s protective mission. (See this PubCo post.) But, according to Bloomberg, there’s something not quite right—something “fishy”—about those letters. To borrow a phrase, did Clayton get punked?
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