Sock puppets are trying to generate another round of astro-turf comment letters to the SEC. Proxy advisors do NOT file shareholder proposals. Your money is NOT being stolen to pay for abortions. Shareholder proposals are nonbinding and do NOT give money to anyone. This YouTube video is full of lies made up by fake organizations to allow fat cat CEOs to be unaccountable to workers. Will a folksy YouTube video from two sock puppet political hacks generate another round of letters to be used by SEC Chairman Clayton in support of a rule requiring proxy advisors to check with the Fat Cats first?
Sock Puppet Political Consultants Chris and Holly Turner
Here is a paragraph from a typical sock puppet letter generated to the SEC by this video:
These firms are not investing your money in companies that give you the best return on your money. They are investing in far left institutions that promote things like abortion, open borders, gun bans, etc. The proposed new SEC rule (S7-19-22) prevents that and allows investment ONLY in companies that provide the safest and highest yield for the investor. I feel it is definitely a needed rule and think you will agree. The only way we can assure this rule passes is to WRITE to the SEC.
Fat Cats Seek Protection From Misleading Rules and Sock Puppet Letters
Proxy advisory firms DON’T invest your money. They advise funds that invest your money and that helps funds achieve BETTER returns. Proxy advisors are NOT promoting abortion, open borders, gun bans, etc. They DO frequently recommend funds vote in favor of measures to discourage companies from offloading the costs or their activities, such as toxic pollution, onto workers and taxpayers. They do so primarily because bad corporate behavior often leads to lawsuits and fines. Think about Boeing not paying attention to safety or Wells Fargo ripping off customers. That’s what happens when Fat-Cats aren’t held accountable.
Proxy advisors DO generally recommend in favor of proposals that companies disclose risks, including what are currently “dark money” contributions to political campaigns and for lobbying. They DO recommend against some of the highest highest CEO pay packages. The AVERAGE S&P 500 CEO earns $14 million a year. That’s about $2,000 an hour. This rule will make it more difficult for proxy advisory firms to recommend against such pay packages by forcing them to essentially negotiate with corporate managers and CEOs before making recommendations to the funds that manage your money. That’s what the rule is all about. Entrenched managers want more power and don’t want to be held in check by funds getting the facts from proxy advisors.
The person making the comment quoted above in the second paragraph after watching this video believes the proposed rule (S7-19-22) would allow funds to invest “ONLY in companies that provide the safest and highest yield for the investor.” However, the rule would not regulate funds at all. Proxy advisors don’t provide advice on what shares to buy. That’s the job of buy-side analysts. This proposed rule does nothing to regulate those analysis who are making far more errors than proxy advisors.
Proxy advisors are hired by funds to review items on the corporate proxy before funds vote on your behalf. 90% of the time, proxy advisors recommend voting the same as management. However, about 10% of the time they recommend voting against management. For example, they might recommend against a pay package that isn’t aligned with performance. Why give a CEO a $20 million severance pay to leave a company for doing a poor job. Don’t you want your fund to know when that happens? How much money have you ever gotten for doing a bad job and being fired?
With regard to shareholder proposals, proxy advisors often recommend voting in favor of a proposal asking the company to disclose its political contributions but fat cat CEOs don’t want you to know when they are making those dark money payments. Funds don’t have to take the advice of the proxy advisors they hire and companies are not required to implement a shareholder proposal, even if it gets 99% of the vote. This rule wasn’t written to protect workers from proxy advisors. It was written to protect fat-cat managers from workers like us.
Also read this excellent piece from Nell Minow: Republican Operative Holly Turner Posts Appallingly Deceptive Video in Support of Anti-Shareholder Proposal from the SEC at ValueEdge Advisors.
Get the Facts Before Commenting
Here’s a news story that exposed the sock puppet letters Chairman Clayton read when he introduced the rule. SEC Chairman Cites Fishy Letters in Support of Policy Change. At the meeting when they vote to finalize this rule, will Chairman Clayton cite sock puppet letters generated by the above video from political consultants?
Managers are trying to stir up a culture war by creating what looks like a groundswell of support for a rule to reduce their accountability. Don’t be fooled by this video. Don’t be another sock-puppet. This folksy video isn’t from a couple of workers. They are both well paid political consultants. (Chris & Holly Turner and Stampede Consulting, offering their fat clients a money back guarantee for campaign effectiveness.)
Before writing the SEC, read the LATimes: The SEC is trying to stifle shareholders’ right to challenge corporate managements. Our money IS being stolen… not by proxy advisors who analyze what will be voted on at shareholder meetings but by FAT-CAT CEOs who don’t want anyone providing advice they haven’t approved. This isn’t about the culture wars, its about YOUR MONEY. Tell the SEC NOT to adopt rule S7-19-22. Read more at SEC Rulemaking Comment Tips and from the Shareholder Rights Group. Don’t let Fat-Cat CEO’s turn corporations into democratic-free zones.
Ask the SEC to Consider Alternatives
Concerned with what proxy advisors and recommending and how funds are voting? Funds are required to report their votes but only once a year and they can basically report in code. Read the disclosure by Vanguard Index Trust Total Stock Market Index Fund. Real-time proxy vote disclosure would allow people pick funds that vote shares in alignment with their own values. See, for example, this voluntary disclosure from Trillium Asset Management. You may or may not agree with how they vote but it is easy to find.
If most funds announced their votes in advance of meetings in a sortable format, other funds could ignore the advice of proxy advisors or at least consider how others are voting. Real-time disclosure would start an informed dialogue. You could easily look up how they are voting and you would have the facts, instead of the lies spouted by political consultants. See rulemaking proposal File 4-748, Report of proxy voting record.
By law, the SEC must consider alternatives suggested in place of their own proposed rules. In your comments, ask the SEC to consider the alternative of amending proxy reporting requirements so we can find voting records more easily. Submit comments to reject S7-19-22 and S7-19-23 and request consideration of the alternative — make proxy reporting requirements more user friendly. See SEC Rulemaking Comment Tips. To support the better alternative, also send comments in support of File 4-748 to firstname.lastname@example.org. The subject line of that message must include File 4-748.