Press Release: Senate Banking Right to Examine Proxy Advisory Process

WASHINGTON – The American Securities Association (ASA) today commended Senate Banking Committee Chairman Mike Crapo (R-ID) for holding a hearing to examine the flawed proxy advisory process, and outlined a series of reforms needed to prioritize the interests of Main Street investors over certain politicized proxy advisors and fund managers.

“The proxy advisory oligopoly has teamed up with certain fund managers to use the shareholder proposal process to push political agendas that harm the returns of Main Street investors and retirement savers,” said ASA CEO Chris Iacovella. “While these firms play useful roles in our markets, playing politics with the savings of American retirees isn’t one of them. We thank Chairman Crapo for shining the light on the flawed proxy advisory process and look forward to working with Congress and the SEC to implement needed reforms to increase accountability and transparency.”

ASA strongly supports proxy advisory process reforms that would:

  • Subject the voting reports proxy advisory firms produce to the anti-fraud provisions of the proxy solicitation rules;
  • Prohibit proxy advisors from offering rating and consulting services to issuers on any matter that they are also being paid by an investor to provide a voting recommendation on (there is no way to manage this conflict); and
  • Update the resubmission thresholds for proposals that lose by wide margins.

ASA CEO Iacovella has penned numerous op-eds on the need to reform the proxy process. He has been featured in The Hill, RealClearMarkets, and Morning Consult.