US Lawmakers Reach Deal On Proxy Access
First Published Friday, 25th June 2010 01:37 am - © 2010 Dow Jones
By Victoria McGrane
Of Dow Jones NEWSWIRES
WASHINGTON -(Dow Jones)- After nearly two weeks of haggling, U.S. House and Senate negotiators reached agreement on a provision to financial-overhaul legislation designed to give shareholders easier access to corporate voting.
The deal brings the negotiators practically back to where they started from at the start of the bicameral negotiations. Lawmakers agreed to retain the Senate language giving the Securities and Exchange Commission the authority to write a rule granting shareholders so-called proxy access. Lawmakers added language granting the SEC authority to exempt small public companies from the proxy access rule, if the agency chooses.
The agreement came after a several back-and-forth proposals from the two sides. Senate Banking Chairman Christopher Dodd (D., Conn.), under pressure from moderate Democrats in his caucus, repeatedly tried to add in specific ownership requirements, mandating that shareholders own at least 5% of outstanding shares for at least two years to be able to gain proxy access.
House Democrats rejected these attempts, backed up by major institutional investors such as the California Public Employees' Retirement System. Investor groups argued that the Senate's 5% ownership proposal would create too high a hurdle for individual shareholders--or even groups when dealing with very large corporations--to realistically meet.
After some more back-and-forth discussion Thursday night, House and Senate negotiators agreed to go back to where they started, leaving it to the SEC to decide what ownership requirements shareholders must meet to gain proxy access.
-By Victoria McGrane, Dow Jones Newswires; 202-862-9267; firstname.lastname@example.org