In a partisan 3-2 vote, the Trump administration’s Securities and Exchange Commission (SEC) proposed to curtail the rights of investors to file proposals for a vote at company annual meetings. If adopted, these changes will hinder shareholder proposals by union members and their pension plans to hold corporate management accountable.
“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,” said AFL-CIO President Richard Trumka (UMWA). The proposed changes include dramatic increases in stock ownership requirements and vote resubmission requirements.
Corporate CEOs of the Business Roundtable and the Chamber of Commerce have long wished for these changes to the shareholder proposal rule. In a 2017 letter to the SEC, the AFL-CIO showed how these proposed rule changes will undermine efforts to increase corporate responsibility for environmental, social and governance issues.
“The right to petition corporate management by filing shareholder proposals is an integral part of shareholder democracy in the United States,” Trumka explained. “The SEC should protect the rights of working people as the real main street investors, not the interests of overpaid and unaccountable corporate CEOs.”
For more information about the efforts of SEC Chairman Jay Clayton, nominated by President Trump, to disenfranchise investors and reduce shareholder democracy by curtailing the shareholder proposal rule, please visit the Investor Rights Forum.
This article was originally published at AFL-CIO on November 5, 2019. Reprinted with permission.