The SEC on Wednesday issued a concept release seeking public comment on whether the agency should reform the corporate proxy voting system to make it more accurate and transparent.
Among the specific issues on which the agency is seeking comment is whether pension funds and other lenders of securities should be provided more notice about the content of upcoming shareholder meetings so they can “decide whether to recall their shares and regain their right to vote these shares,” SEC Chairwoman Mary Schapiro said during an agency meeting Wednesday morning.
The SEC also is seeking comment on whether proxy advisory firms should be subject to new SEC regulations and disclosure requirements.
“Some companies and investors have raised concerns that proxy advisory firms may be subject to conflicts of interest or may fail to conduct adequate research and base recommendations on erroneous or incomplete facts,” according to an SEC fact sheet.
Charles G. Tharp, executive vice president for policy, Center on Executive Compensation, in a statement commenting on the release said: “There have been legitimate questions raised around the analytical rigor with which compensation is reviewed and reported by proxy advisory services. The center hopes to work with the commission to ensure that, moving forward, analysis is conducted and recommendations on pay votes are made in a way that supports a clearer pay for performance analysis.”
The SEC issues concept releases to seek public comment on issues officials believe might warrant regulation in the future.
The public will have 90 days to comment on the concept release after it is published in the Federal Register. The publication date hasn’t been set.