New Proxy Voting Rules Take Aim at Powerful Advisory Firms
Lobbyists are pushing the SEC to rein in companies like ISS and Glass Lewis that help big investors decide whether to oppose or support management.
The shareholder vote is fundamental to how publicly traded companies are run. But the question of who gets a real voice in a proxy fight is more complicated than one vote for every share.
Many investors hop in and out of stocks and are happy to ignore votes. Others hold their stock at one remove, via a mutual fund or pension. Decisions on voting those shares are often farmed out to proxy advisers, specialized companies that provide recommendations to money managers. And while many investors—and corporate managers—think votes should focus solely on issues that affect profits and shareholder returns, others see owning a piece of a company as an opportunity to weigh in on how it behaves. About half of shareholder proposals these days focus on social and environmental issues.