A letter to U.S. SEC on Shareholder Proposals Rule |
送交者: 比较政策 2014年04月02日21:07:20 于 [天下论坛] 发送悄悄话 |
April
3, 2014
U.S. Securities
and Exchange Commission
100 F Street, NE
Washington, DC
20549-2736
Via
email to: chairmanoffice@sec.gov
Re:
Shareholder Proposals Rule Change
Dear ladies
and gentleman:
As a small
shareholder having had about ten human rights proposals voted in recent years[1], I am
writing you to express my grave concerns of the recent reports on shareholder
proposals rule change attempts[2],
especially of “Remarks at the 26th Annual Corporate
Law Institute, Tulane University Law School: Federal Preemption of State
Corporate Governance” by Commissioner Daniel M. Gallagher, New Orleans, LA,
March 27, 2014[3]. As reported by New York
Times, “S.E.C. Official Criticizes Proxy Proposals on Social Issues” (MARCH
27, 2014), these attempts want to kill the only democratic element in current American
economy system for corporate governance and social responsibility.
In his remarks, Commissioner Gallagher starts “II. Shareholder Proposals” with: “One
area where the SEC’s incursions into corporate governance have had a
particularly negative effect is shareholder proposals.” He then surprised readers: “Activist
investors and corporate gadflies have used these loose rules to hijack the
shareholder proposal system.” Perhaps Commissioner Gallagher is right: Socrates “hijacked” the Athenian democratic system; Jesus
“hijacked” human civilization. I was
accused so when I pushed my human rights proposal to News Corp. shareholders
meeting in October 2010[4],
just before News’ human rights scandals became known to the public.
Commissioner Gallagher states that “the vast majority of proposals are
brought by individuals or institutions with idiosyncratic and often political
agendas that are often unrelated to, or in conflict with, the interests of
other shareholders.” He certainly has the right to say so, but he has no right
to deprive shareholders of the right to vote on social issues, and we
shareholders know better how to defend our long-term interests.
Commissioner
Gallagher
continues: “The low level of hedge fund activism here implies that their
concerns with corporate management are being addressed using avenues other than
shareholder proposals—as most legitimate concerns can be.” This clearly indicates whom Commissioner Gallagher represents because hedge fund activism never shoed interest in social
issues.
Commissioner
Gallagher
further says, “of course, where management is breaching its fiduciary duties,
investors can have recourse to the courts.” This effectively excludes
any possibility for small shareholders without million dollars, such as me, to
participate, assist and help American corporate improving governance and social
responsibility especially doing business outside of the U.S.
Commissioner
Gallagher
reveals his stance: “I’m not sure we need shareholder proposals at all.” It is very alarming that such a commissioner
seats inside the SEC.
Commissioner
Gallagher further complains: “It is enormously
expensive for companies to manage shareholder proposals.” However, from my experience with Y
company, it is the company management who abused the company resource to hire
outside law firms to exclude my human rights proposals with materially false
and misleading statement. And Commissioner
Gallagher did not say one word about the “enormously expensive”
CEO pay in the U.S. and the world.
Commissioner
Gallagher raises the point of his remarks, “the holding
requirement to submit proxies should be updated. $2,000 is absurdly low,
and was not subject to meaningful economic analysis when adopted. The
threshold should be substantially more, by orders of magnitude: perhaps
$200,000 or even better, $2 million.” “I would support banning proposal by
proxy.” Again, this just indicates whom Commissioner
Gallagher represents inside the
SEC. As a shareholder, I would like to suggest the
threshold should be substantially less, say $1,000, to encourage more
shareholders to participate economic democracy so we can prevent more corporate
scandals, crimes, and financial crisis.
Commissioner
Gallagher even attacks social issues proposals: “Making adjustments
along these lines will go a long way towards ensuring that the proposals that
make it onto the proxy are brought by shareholders concerned first and foremost
about the company—and the value of their investments in that company—not their
pet projects.” If Commissioner Gallagher considers social issues such as UN Global
Compact “pet projects,” I have to doubt that the SEC is “hijacked.”
Near
the end, Commissioner Gallagher proposes that “companies shouldn’t have to go through the time and expense of
litigation to vindicate their substantive rights under our rules. The
burden to ensure that a submission is clear and factually accurate should be placed
on the proponent, not the company. I believe that the Staff should take a
more aggressive posture toward proponents that fail to meet that burden.” If
the SEC is hijacked to serve the economic oligarchy only, the only way to
express our social concerns is to protest in front of corporate headquarters,
as I actually was forced to plan hunger-strike in front of Y company for its
policy and practice against Chinese human rights movement.
Let’s work together
to stop the assault on American economic democracy.
Respectfully,
Jing Zhao, Ph. D
President of
US-Japan-China Comparative Policy Research Institute
zhao.cpri@gmail.com
[1] Google,
Chevron, Cisco, News Corp. (2010), Yahoo (2011, 2013), HP, Goldman Sachs,
Oracle (2013), Sohu.com (2014). I also submitted proposals to other companies,
withdraw some proposals voluntarily, and presented some proposals on behalf of
other shareholders.
[2] For example, Wall Street Journal report “Corporations Take Swats at a Gadfly,” March 12, 2014, and opinion article “The SEC’s Corporate Proxy Rules Need a Rewrite” March 28, 2014. |
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