Earlier this month, responsible investors filed thousands of comments with the U.S. Securities and Exchange Commission (SEC) to oppose a rule making that will entrench corporate CEOs from accountability on environmental, social and governance issues. Pension plans, socially responsible investors, faith-based funds, individual investors and investor rights groups strongly opposed the SEC power grab by CEOs and their corporate lobbyists.
AFL-CIO President Richard Trumka (UMWA) said: “We strongly oppose the SEC's shareholder proposal rule changes that will limit the ability of working people and their pension plans to have a voice in the companies that we invest in.” The SEC voted to propose these pro-CEO rule changes in a partisan 3–2 vote in November last year.
The SEC’s proposals include a variety of new restrictions on the ability of shareholders to file proposals. These shareholder proposals encourage reforms on topics including executive compensation, workers’ rights and board diversity. The SEC estimates that its proposed rule changes will reduce the number of shareholder proposals by more than 37%.
Secondly, the SEC has proposed to allow companies to undermine the independence of proxy advisers who recommend how shareholders vote at company annual meetings. The SEC proposal will allow companies to “pre-review” proxy voting advice before it is given to investors. Companies may threaten to sue if proxy advisers do not make their requested changes.
In two letters to the SEC, the AFL-CIO defended the rights of union members’ pension plans to file shareholder proposals and to vote proxies using independent advice. “The SEC should protect the rights of working people as the real main street investors, not the interests of overpaid and unaccountable corporate CEOs,” Trumka explained.