Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value (EventID=118577)

Video Description

Connect with the House Financial Services Committee » Get the latest news: https://democrats-financialservices.house.gov/ » Follow us on Facebook: https://www.facebook.com/USHouseFSC » Follow us on Twitter: https://x.com/USHouseFSC » Follow us on Instagram: https://www.instagram.com/ushousefsc/ » Follow us on Bluesky: https://bsky.app/profile/ushousefsc.bsky.social ___________________________________ » Subscribe: https://www.youtube.com/@USHouseFSC?sub_confirmation=1 ___________________________________ On Wednesday, September 10, 2025, at 10:00 a.m. (ET) full Committee Chairman Hill and Ranking Member Waters will host a hearing entitled, “Proxy Power and Proposal Abuse: Reforming Rule 14a-8 to Protect Shareholder Value." ___________________________________ Witness for this one-panel hearing will be: • Mr. James Copland, Senior Fellow & Director of Legal Policy, Manhattan Institute • Mrs. Ferrell Keel, Partner, Jones Day • Mr. Ron Mueller, Partner, Gibson Dunn & Crutcher LLP • Mr. Brad Lander, Comptroller, City of New York ___________________________________ This hearing will examine Rule 14a-8 under the Securities Exchange Act of 1934, which governs shareholder participation in corporate governance. The Committee will assess whether the shareholder proposal process, originally designed to provide all shareholders a voice in company oversight, has been co-opted by activist investors who prioritize narrow policy goals over maximizing shareholder value. The Committee will also evaluate the influence of proxy advisory firms on capital markets, specifically their effect on corporate governance and shareholder voting outcomes. The Committee will highlight legislative solutions to limit proposals to material issues, curb misuse by special interests, and enhance the transparency of proxy advisory firms. Legislation Noticed 1. H.R. 4098, the Stopping Proxy Advisor Racketeering Act (Fitzgerald): This bill makes it unlawful for proxy advisory firms to provide voting recommendations under several circumstances: (a) when they offer consulting services to a registered company; (b) when they modify voting recommendations based on a company’s subscription to their services; (c) when they provide advice during periods when they are simultaneously providing stewardship services to a shareholder proponent; or (d) when they are members of organizations supporting shareholder-sponsored proposals related to their voting advice. 2. H.R. 3402, a bill to amend the Securities Exchange Act of 1934 to require certain disclosures by institutional investment managers in connection with proxy advisory firms, and for other purposes (Loudermilk): This bill requires institutional investment managers to file an annual report with the Securities and Exchange Commission (SEC) explaining how they voted on shareholder proposals, the percentage of votes that aligned with proxy advisory firm recommendations, and how they considered these recommendations in their voting decisions. Additional requirements apply to managers with over $100 billion in assets, including clarifying to customers that shareholders are not obligated to vote on every proposal and performing an economic analysis before voting on shareholder proposals to ensure the vote is in the “best economic interest” of shareholders. 3. H.R. ____, a bill to amend the Securities Exchange Act of 1934 to provide for the registration of proxy advisory firms, and for other purposes (Steil): This discussion draft: (1) requires proxy advisory firms to register with the SEC before providing proxy voting advice, research, analysis, ratings, or recommendations to clients; (2) requires that the registration process provide information about their procedures, methodologies, conflicts of interest, and qualifications of staff; (3) allows the SEC to censure, deny, or suspend the registration of a firm if it finds this necessary for investor protection and the public interest; (4) requires registered firms to establish policies and procedures to publicly disclose and manage conflicts of interest, and to ensure the reliability and accuracy of their proxy advice; (5) prohibits firms from engaging in unfair, coercive, or abusive acts or practices related to their proxy advisory services; and, (6) requires registered firms to file annual reports disclosing information about their proxy recommendations, analysis, and compliance. 4. H.R. ____, a bill to amend the Securities Exchange Act of 1934 to provide for liability for certain failures to disclose material information in connection with proxy voting advice (Steil): This discussion draft establishes that the failure to disclose... ___________________________________ #federalreserve #doddfrank #fdic #cfpb #occ #financialservices #regulation #sec #securities #securitiesandexchangecommission #fsoc #ofr ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=413559