July 23, 2014

CREW: Chamber of Commerce’s Self-Serving Rulemaking Petition Would Disenfranchse Shareholders

U.S. Chamber of Commerce

Petition Would Undermine Corporate Accountability

Washington, D.C.—Citizens for Responsibility and Ethics in Washington (CREW) today filed comments with the Securities and Exchange Commission (SEC) opposing a rulemaking petition from the U.S. Chamber of Commerce that would obstruct votes on shareholder proposals, including those designed to increase transparency of corporate political spending. By making it harder to get votes on these proposals, the Chamber’s petition would disenfranchise shareholders and undermine corporate accountability.

Read CREW's comments to the SEC.

“Shareholder-led pushes for corporate political spending disclosure are on the rise, but the Chamber’s proposal would help corporations kill them in the crib. The Chamber’s petition is all about keeping shareholders in the dark and unable to raise objections while making sure corporations can continue making contributions to support the Chamber’s political activity,” CREW Executive Director Melanie Sloan said.

Under current SEC rules, a company may exclude a shareholder proposal from its proxy solicitation materials only if the proposal received support from less than three percent of shareholders during the most recent vote if voted on once in the past five years; six percent if it was voted on twice in the past five years; and ten percent if it was voted on three or more times in the past five years.

The Chamber’s petition seeks to significantly increase these thresholds and, if a proposal appeared more than once on a corporate ballot, require that it gain progressively more support each time it appears.  Otherwise, a shareholder proposal could be excluded from a company’s proxy materials for three years. In other words, the Chamber wants to make it easier for corporations to block investors from voting on shareholder proposals that have not yet passed.  At a time when support for political spending disclosure proposals is on the rise, the Chamber’s proposed new rule would make it harder for such proposals to pass.

CREW pointed to a lawsuit brought against Aetna by CREW on behalf of a shareholder as an example of the need for shareholders votes on corporate political disclosure proposals.

“Aetna is a perfect example: The corporation made false and misleading statements to defeat shareholder proposals that would have required more disclosure of Aetna’s political spending. Despite these deceptive tactics, the Chamber’s proposal would make it more difficult to get votes on these proposals in the future,” Ms. Sloan said.

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