Tag Archives | New York City Comptroller

Real Main Street Investors Endangered

Real Main Street Investors are NOT the members of a Coalition formed by the National Association of Manufacturers to buttress arguments made by the Business Roundtable and United States Chamber of Commerce. (see Main Street Investors: Battle Coming) In fact, real Main Street investors are an endangered species that may actually go away if the Coalition gets its way.

The Coalition appears to be getting traction with SEC Chairman Clayton who mentioned “Main Street Investors” 28 times in testimony to the House Committee on Financial Services. Or, perhaps he is referencing the real main street investors, not the Coalition?

The Coalition has budgeted millions of dollars on an information campaign based on paid for biased research. For example, one of their surveys found that 78% of ETF investors chose passive funds for stable, consistent returns, while only 11% select ETFs for how they influence worthy political or social causes.

However, most of the 78% investing primarily for money also may want both: earn money and have a positive influence. The survey was designed to exclude measuring the popularity of such motivations.

Real Main Street Investors Endangered

Who are the real Main Street Investors? According to Wikipedia, “Main Street” represents the interests of everyday people and small business owners, in contrast with “Wall Street.” Further, investors are those who “allocate capital with the expectation of a future financial return.”

By that definition, real Main Street investors are an endangered species. Half of American’s have no investments in equities, not even mutual funds. The top 1% holds more wealth than the bottom 95%… before the recent roll back of inheritances taxes. “Everyday people” in America do not invest in corporations. For most everyday people, their homes are their primary investments.

Studies find a direct correlation between income inequality and political polarization over the last 60 years. Unfortunately, it manifests itself daily in the erosion of norms around civility, truth telling, declining trust in our institutions and political dysfunction. 

inequality correlates to polarization

It is clear we need more real Main Street investors if we are to avoid plunging deeper into turmoil. One thing the Main Street Investors Coalition gets right is that real people have almost no ability to influence the decisions corporations make on their behalf. 

We do need to change that. However, we cannot accomplish that by suppressing shareholder proposals and proxy advisors. Instead, we need to emphasize how real Main Street Investors can invest with our values, instead of despite our values. 

Real Main Street Investors Need to be Involved in Corporate Governance

Contrary to Coalition pronouncements, there is no such thing as value-free economics or investing. When we abrogate our moral responsibilities, we tilt the rules away from citizens to entrenched insiders. 

Common values must be created through open dialogue and elections, not by unaccountable individuals hidden behind dual-class corporate structures controlling our economy. 

Although buying a mutual fund is investing, most mutual fund holders do not really identify with the companies mutual funds own. When I invest, I ask myself what the world needs and try to find public companies that fulfill that need. 

Investing is just the start of a long-term relationship. Real Main Street investors should hope to hold forever and to suggest ways our companies can improve, either through shareholder proposals or in other communications with the company.

I recently read a wonderful little book, A Nation of Small Shareholders, about an NYSE campaign to get more Americans to feel like part of the capitalist system after WWII. It was a way to convince Americans that capitalism would offer them more benefits than communism. Since they felt like shareholders, they would also be more likely to favor lowering capital gains taxes. It was a nudge campaign before behavioral economics took hold. The NYSE knew what it wanted before they started and it was not fostering dialogue with real Main Street investors.

Today, America needs a campaign to make all Americans shareholders. It should emphasize the shareholder’s voice in shaping corporate impacts, as well at potential profits. The SEC should educate real Main Street investors about resources available to them in meeting their voting responsibilities as shareholders.

The New York City Comptroller recently joined a dozen other funds in announcing their votes in advance of annual meetings. Reviewing those disclosures is very helpful in making voting decisions. Proxy Insight compiles it all for a reasonable subscriber fee. We hope to get ProxyDemocracy back up and running as a free service. Meanwhile, you can always research them one-by-one through the Shareholder Action Handbook on CorpGov.net.

If the overwhelming majority of investors simply want to earn the highest return possible, regardless of impact, we are doomed as a society unless the Universe was meant to bend toward greed. I am convinced most real Main Street investors want to live in a civilized society on a salubrious planet.

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Virtual-Only Shareholder Meetings: Anathema or Convenience? (Part I)

The first part of an in-depth look at Virtual-Only Shareholder Meetings, a new front in corporate-investor engagement.

Scenario 1: In-Person Shareholder Meeting

A shareholder proposal calling for the chairman’s resignation is coming up for vote at the physical annual meeting of Acme Inc.

In the packed hall, a supporter of the proposal rises to her feet and begins to describe exactly why the chairman must resign, making fulsome reference to his incompetence in negotiating the latest CEO’s pay package, dealing with the former CEO’s sexual misconduct and a botched acquisition that halved the company’s market cap. Continue Reading →

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CII: Climate Competency & Risk

Shifting Investor Perspectives on Climate Risk & Board Climate Competency

These notes on climate competency are my last post from the Council of Institutional Investors Fall 2017 conference.  Find more at .  As a member of the press, I was excluded from the policy-making meetings. Still, it was a great opportunity to touch base with members of CII and to learn of recent developments and where we may be headed.

The panel discussion on climate risk and board competency hosted by the 50/50 Climate Project and the New York City Comptroller’s Office. From the program: Continue Reading →

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Virtual-Only Meetings: The Nuclear Option

Virtual-Only Meetings Growth

Virtual-Only and Hybrid Meetings Data Reported by Broadridge in the FT

Virtual-Only Meetings are quickly being adopted by entrenched boards who fear both adverse publicity and any attempt by shareholders, especially retail shareholders, to hold them accountable. Broadridge Financial Solutions ($BR) has a direct financial incentive to push companies toward virtual-only meetings. Although many funds and organizations oppose such meetings, no one in the opposition has a such a direct financial incentive to oppose them. 

Take Action: Vote against any all all directors serving on governance or similar committees at companies that hold virtual-only meetings.  Continue Reading →

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Replay the Glass Lewis Conference Call on Proxy Access

Glass LewisOn Thursday March 5th proxy advisor Glass Lewis held a conference call to discuss proxy access, i.e. the right for shareholders to place their director nominees on company proxies, instead of having to pay for a separate proxy and solicitation.

The New York City Comptroller, Scott Stringer has taken the lead on proxy access this year with his Boardroom Accountability Project and the introduction of 75 proxy access proposals. Continue Reading →

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American Express (AXP): How I Voted – Proxy Score 47

               American Express Company $AXP is one of the stocks in my portfolio. Their annual meeting is on 5/12/2014. ProxyDemocracy.org had collected the votes of three funds when I checked and voted on 5/4/2014.  I voted with management 47% of the time.  View AXP’s Proxy Statement, which is user friendly. My recommendations on how to vote the AXP proxy follows.

Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious CrimeI generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted.  Continue Reading →

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