Jay Clayton is Chairman of the U.S. Securities and Exchange Commission. This post is based on Chairman Clayton’s recent public statement, available here. The views expressed in this post are those of Mr. Clayton and do not necessarily reflect those of the Securities and Exchange Commission or its staff.
Our capital markets benefit from a level of retail investor participation that is unparalleled among the world’s large industrialized countries. Our Main Street investors who, day in and day out, put their hard-earned money to work for the long term are the reason why we have the deepest, most dynamic and most liquid capital markets in the world.
Today’s Main Street investors have a substantial responsibility to fund their own retirement and other financial needs. As a result of increased life expectancy and a shift from defined benefit plans (e.g., pensions) to defined contribution plans (e.g., 401(k)s and IRAs), the investing interests and needs of our Main Street investors have changed. Put simply, our Main Street investors are more than ever focused on long-term results. We also must recognize that our Main Street investors who have entered retirement or have another expense, such as paying for tuition or an unforeseen event, need liquidity. In other words, at some point, long-term investors do become sellers.
A “Draft Review” as a Safeguard on Proxy Advisors
More from: Gary LaBranche, Ted Allen, NIRI
Ted Allen is Vice President and Gary LaBranche is President and CEO of the National Investor Relations Institute. This post is based on a letter sent by the National Investor Relations Institute to the U.S. Securities and Exchange Commission.
I am writing on behalf of the National Investor Relations Institute (NIRI) to offer additional comments on proxy advisory firms. [1] Founded in 1969, NIRI is the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts, and other financial community constituents. Our more than 3,300 members represent over 1,600 publicly held companies and $9 trillion in stock market capitalization.
Our members play a vital role in communicating with institutional and retail investors on proxy voting matters. This role is especially critical when a company needs to engage with shareholders during a proxy contest or a “vote no” campaign, or after receiving a negative proxy advisor recommendation on an equity incentive plan or during a Say-on-Pay vote.
We are pleased to join with 318 issuers [2] around the country and a broad coalition of corporate organizations, including the Shareholder Communications Coalition, the Society for Corporate Governance, the U.S. Chamber of Commerce, Nasdaq, the Business Roundtable, the National Association of Manufacturers, the Biotechnology Innovation Organization, the Center On Executive Compensation, and Nareit, in urging the Commission to exercise greater oversight over proxy advisors.
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