CalPERS and 20 other public pension plans have written to key US lawmakers urging them to keep corporate governance provisions in the final version of a proposed financial regulations reform bill.
The US House of Representatives and Senate have each passed versions of reform legislation and now must now merge the two bills. Both measures include provisions that would give shareholders advisory votes on executive pay packages and would clarify the authority of the SEC to issue rules that would enable shareholders to put director nominees on proxy ballots. The letter to Rep. Barney Frank, D-Mass., and Sen. Christopher Dodd, D-Conn., the sponsors of the House and Senate bills, states that the proxy access measure “will provide investors with the necessary tool to achieve appropriate transparency, accountability, and management of risk at the corporate level.”
The CalPERs letter adds further weight to the submission already made by Council of Institutional Investors that “Proxy access would finally give investors a tool they need to fulfill their oversight role as responsible corporate owners”.
It is understood that Frank intends to use the text of the Senate bill as the basis for the final legislation and includes a provision to mandate majority voting in uncontested board elections and an annual “say on pay” vote. It does not however include a shareholder vote on golden parachutes. Pending last minute lobbying, President Obama is expected to sign the final bill into law by 4th July.