June 22, 2018
In a House Financial Services Committee oversight hearing, SEC Chairman Jay Clayton again signaled the re-opening of the public comment period on the 2010 “Proxy Plumbing Concept Release,” which would examine every issue in the proxy voting process, including proxy advisory firms and shareholder proposal issues.
Proxy process—a top GOP priority: House Republicans have acted on multiple bills focusing on the proxy process and related corporate governance issues, including bills requiring greater SEC oversight of proxy advisory firms and, more recently, updating shareholder proposal resubmission thresholds.
Clayton quizzed on SEC action: Given the legislative gridlock, several members of the GOP prodded Mr. Clayton on whether the SEC would act on proxy issues in the near future.
“[Proxy advisors] have a very important role in our regulatory ecosystem and because of that we have to look at them,” according to Mr. Clayton.
Reopening SEC Proxy Plumbing Concept Release—potential avenue to reform: The SEC’s 2010 Proxy Plumbing Concept Release sought public comments on needed fixes to the proxy system, including the role of the proxy advisory firm industry, shareholder resubmission thresholds, and shareholder proposal eligibility requirements.
The Association’s Center On Executive Compensation filed detailed comments on the 2010 proposal and is actively engaging on both the Hill and at the SEC on these issues.