We recently commented on the SEC’s decision not to challenge the court ruling vacating its proxy access rule. The Council of Institutional Investors had quickly registered its disappointment. Global Pensions reported yesterday that a number of pension funds are now urging the SEC to issue a new rule.
According to the statement issued on Sept. 13, 2011, the SEC’s rule “was the right rule when it was issue – and it’s the right rule today. In strong wording, the statement cites “far too many examples of unaccountable directors on boards which have ignored shareowner proposals, fallen short of their duty to oversee management and, too often, overcompensated CEOs and senior executives relative to performance results when they failed to deliver shareowner value.” It goes on to “strongly urge” the SEC to issue new rules and “continue its commitment” to giving long-term holders a voice.
A total of 14 funds endorsed the statement, including CalPERS, CalSTRS, the New York City Pension Funds, and the New York State Comptroller.
OUR TAKE: This statement illustrates the united front of numerous key institutional investors to force change in this area. It puts additional pressure on the SEC both to produce results and meet the challenges raised in the Business Roundtable and U.S. Chamber of Commerce’s attack on the first rule.