Proxy Access: Monday AM

The Huffington Post appears to have the latest coverage, White House Flip Flops On Reining In CEO Pay, 6/17/10. I watched the televised Conference Committee where Chuck Schumer failed (on a vote of 4 to 8) to delete Dodd’s amendment that basically guts proxy access by limiting it to one 5% shareowner, an impossibly high threshold as most companies.

House Speaker Nancy Pelosi and Barney Frank are still stand strong against the effort by Dodd and the Business Roundtable to water down the proxy access provisions. The New York Times ran an editorial, Congress Defends the Big Guys (6/19/10). The bill that was supposed to restore confidence in the financial sector and business in general appears to be coming apart at the seams:

  • Exempt most publicly traded companies (worth less than $75 million) from a SOX anti-fraud auditing requirement.
  • Keeping boards safe for cronies by gutting proxy access.
  • Self-funding for SEC now in question.

So, as of early this morning our best understanding is that the House Conferees will reject the Senate counteroffer language on proxy access (the newly inserted 5% language). However, until that actually happens, it continues to make sense to contact the House conferees requesting that they reject the Senate language, and get in letters to the Senate Conferees protesting the 5% language.

Assuming, the House conferees reject the Senate language, the issue goes back to the Senate conferees.  Then we need to turnaround Senators Dodd, Johnson and Lincoln.  Senators Bayh and Warner also appear to be critical.  Until we learn more, I would advise continuing to call Obama’s point person for the Administration, Valerie Jarrett through the White House switchboard at at (202) 456-1414 and by email to

Tell her how unhappy you are with with the White House interference on the crucial issue of proxy access. Express strong opposition to the Senate’s amendment imposing a 5% ownership threshold for shareowner access to the proxy.  Tell Jarrett and the White House to support the original language passed by both houses of Congress simply affirming the SEC’s authority to issue a proxy access rule.

I’ve written several times to committee members, staffers, etc. Here’s a quick version:

Please oppose the Dodd amendments to the conference committee bill on financial reform.  A 5% threshold by an individual investor will almost never be met by large diversified institutional investors since even the larges rarely hold more than about 1/2% of the shares of large companies. Shareowners need to be able to form groups to nominate directors using the corporate ballot.  Reject the Dodd amendment and take a step towards reducing entrenched boards and CEOs.

I break them into clusters so my outbasket doesn’t get clogged. Send e-mails to the following,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Proxy access is the most important reform in the bill. It would begin to provide shareowners with the tools to end cronyism and hold directors accountable. Directors are supposed to represent shareowners. All too often, they represent CEOs and their own entrenched interests. We need the SEC to be able to move forward with proxy access. Please take a few minutes for a phone call and an e-mail and be sure to include your contact information in your e-mails.

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