FOR IMMEDIATE RELEASE
Tuesday, February 4, 2020
Contact: 202-618-6433, press@bettermarkets.com
Washington, D.C. – Lev Bagramian, Senior Securities Policy Advisor of Better Markets, issued the following statement regarding the Securities and Exchange Commission’s (SEC) proposals on proxy advice and shareholder proposals:
“The SEC’s proposals regarding proxy firms and shareholder proposals will help entrench existing management and make shareholders’ ability to exercise corporate oversight more difficult. Proxy firms are one of the few sources of independent expert advice shareholders can obtain, but the SEC wants to subordinate them to corporate management which wants to silence alternative views. The SEC would also make it harder for shareholders to engage with companies they co-own. These rule proposals are fundamentally anti-investor, and their negative impact on retail investors would be significant. They particularly target the kinds of shareholder proposals that have been gaining more and more support among large and small shareholders. They will make it much harder for shareholders to hold companies and their executives accountable.
“The SEC exists to protect and empower savers and retirees, whose hard-earned savings fuel the economy. To hold corporate management accountable, these shareholders propose resolutions which then is considered by management and other shareholders, and use proxy advisors as a source of expert analysis and advice on how to exercise their corporate suffrage. The SEC’s proposal would effectively curtail this independent advice and deprive shareholders of their ability to challenge, for example, management’s endorsement of its own compensation, however much inflated or undeserved.
“Regrettably, corporate management and their allies at the Chamber of Commerce now have an SEC that will prioritize phony complaints about proxy firms and proxy proposals over investors’ best interests. To add insult to injury, these harmful changes were crafted and sold to American savers and retirees through a fraudulent ‘astroturf’ public engagement process.
“If approved as proposed, these rules would give corporate management significant new powers to stifle the independent voices of proxy advisory firms and entrench and strengthen management’s ability to disenfranchise shareholders who fight for executive accountability and improved corporate governance.
See Better Markets’ letters on proxy advisory firms [here], on proxy proposals [here], and on the fraudulent and compromised process by which the SEC crafted and promoted these rules [here].”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
