Are Social Investors Mounting A Campaign For Minority Rule?

As discussed in this prior post, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires that companies include in their proxy statements not less frequently than every six years “a separate resolution subject to shareholder vote to determine whether votes on the resolutions required under paragraph (1) [the advisory vote on executive compensation] will occur every 1, 2, or 3 years.” In response to this requirement, the Securities and Exchange Commission proposed an amendment to Rule 14a-4 to specify the form of proxy that issuers must use. The SEC has proposed that shareholders only be permitted to vote on one choice. My own view is that the SEC’s proposal limits shareholder choice and is not the best way to ascertain shareholder intent. In my comment letter, I urged that the Securities and Exchange Commission allow shareholders more choice.

However, others have submitted comments supporting reduced choice. For example, Walden Asset Management, a firm that manages “investments for clients who seek to integrate environmental, social and corporate governance”, submitted this comment...

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