Vanguard Group opposes a proposed SEC rule that would give shareholders access to corporate proxy material to nominate directors, according to a comment letter it submitted to the Securities and Exchange Commission.
Microsoft Corp., McDonald’s Corp. and a group of eight former senior staff members at the SEC also opposed the proposal in separate comment letters.
“As fiduciaries acting on behalf of our funds, we care deeply about the effective management of public companies. We fear that the ownership thresholds in the (proposal) will open the door to distraction and expense at the whim of investors whose financial interests do not justify the amount of management attention and resources they could consume,” wrote Heidi Stam, managing director and general counsel, Vanguard, in a four-page comment letter.
John A. Seethoff, vice president and deputy general counsel, Microsoft, wrote that the SEC should instead “give shareholder proxy access a chance to develop within the framework of a state-enabled system that fosters, rather than inhibits, meaningful shareholder choice.”
The proposal “will not promote better corporate governance and therefore will not be an effective way to address a perceived lack of accountability and responsiveness on the part of public company boards to their shareholders,” wrote Gloria Santona, executive vice president, general counsel and secretary at McDonald’s.
The group of former SEC senior staffers in a five-page joint letter wrote that “at this particular juncture in its history, it would be a mistake for the commission to divert its resources to these matters. Simply put, there are far more important regulatory matters on its agenda. … Absent congressional action … the SEC will never have the ability to change the governance of corporations meaningfully.” The former staffers are Roger D. Blanc, James R. Doty, Marty Dunn, Carrie E. Dwyer, Alan Dye, Jonathan Katz, Simon M. Lorne and David B.H. Martin.
Meanwhile, a group of nine law firms, specializing in representing institutional investors in securities litigation, endorsed the proposal.
“We disagree that any aspect of the proposal would impede the shareholder franchise or improperly conflict with state law.” The law firms are Labaton Sucharow; Bernstein Litowitz Berger & Grossmann; Berman DeValerio; Grant & Eisenhofer; Cohen Milstein Sellers & Toll; Milberg; Pomerantz Haudek Grossman & Gross; Kaplan Fox & Kilsheimer; and Barroway Topaz Kessler Meltzer & Check.