Allison Herren Lee is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on her recent public statement, available here. The views expressed in the post are those of Commissioner Lee, and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.
There is a common theme that unites the two proposals before us today[Nov. 5, 2019]: they both would operate to suppress the exercise of shareholder rights.
The proposed changes to our current proxy regime would make it more costly and more difficult for shareholders to cast their votes or even to get their issues onto corporate ballots. There is a stark divide between issuers and shareholders on the policies reflected here. [1] The bottom line is that these policy choices, if adopted, would shift power away from shareholders and toward management.
There is nothing inherently wrong in making such a choice, particularly if data suggests the need to correct some imbalance. But what does the data show about proxy voting? That the vote recommended by management carries the day some 90 percent of the time. [2] Management’s views nearly always prevail. That is the context in which we consider these two proposals that would tilt the scales even further against shareholders.
