SEC Head, Sen. Corker Discuss Proxy Access In Financial Bill
April 15 2010 - 4:36PM
Dow Jones News
A lead Republican negotiator on a financial overhaul bill met
earlier this week with U.S. Securities and Exchange Commission
Chairman Mary Schapiro about the SEC's proposal to give
shareholders easier access to corporate voting, a sign that
Republicans could bend on one of the key sticking points in the
Senate bill.
Sen. Bob Corker (R., Tenn.) said Thursday that Schapiro "has
some interesting ideas" about the SEC's so-called "proxy access"
rule to ensure that shareholders who put their board candidates on
proxy voting ballots have the best interests of the company in
mind.
The SEC's proxy access rule, which Schapiro expects to finalize
later this year, is meeting with vehement opposition from the
business community. Once finalized, the rule will almost certainly
face a court challenge.
Democrats in Congress are hoping to make it easier for the SEC
to complete the proxy access rule without a lawsuit. Financial
rewrite bills in both the House and the Senate include language
giving the agency the explicit authority to write the rule.
The House passed its bill last year, and the Senate is expected
to vote on its version in the coming weeks.
Republicans in the Senate have objected to the financial bill's
proxy access provision, saying it goes outside the scope of
regulatory overhaul. Opponents of proxy access also worry that
unions or other corporate activist groups will hijack corporate
boards using the proxy voting system.
Corker has prepared an amendment to strip the proxy access
provision from the Senate bill, which he could offer during floor
debate.
But Corker said Thursday that he is in talks with the SEC and
some state regulators about how to handle proxy access.
"I still have some concerns about a single-purpose interest
group trying to take control of a board," Corker said.
But the SEC is mulling a number of ideas that could respond to
those worries. "They're doing things like saying for a shareholder
to do it, you've got to own stock for two years, instead of a hedge
fund coming in two months before and gaining access by buying a
large amount [of stock]. I think that makes sense," Corker
said.
All rules coming out of the SEC require approval from at least
three of the five sitting commissioners. Individual aspects of
rules often are tweaked hours before a scheduled vote. People
familiar with the SEC proxy access negotiations say many details of
the rule are still under negotiation."
Corker said Republicans are "still noodling" about the proxy
access rule. He indicated the language in the Senate bill could be
less offensive to Republicans, for example, if the rule initially
only applied to large companies.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263;
fawn.johnson@dowjones.com