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Ya gotta love Commissioner (of the SEC) Kathleen Casey. If only for entertainment purposes.
In a June 29, 2011 speech (text available at http://www.sec.gov/news/speech/2011/spch062411klc.htm), she said a number of endearing things. My favorite is that ”shareholder empowerment … reflects more than just giving greater effect to shareholder voice and promoting important dialogue between shareholders and the companies they own. Rather, it more fundamentally reflects the transfer of corporate power from the board of directors to the shareholders themselves.”
Since when does a board of directors wield power? As anyone other than a cheerleader for the Business Roundtable or the Chamber can tell you, “Boards are really working for management rather than shareholders,” as Professor Espen Eckbo of the Tuck School of Business at Dartmouth College has said. “Shareholder empowerment,” as Commissioner Casey calls it, is really a struggle between management and shareholders over who controls the directors.
And another: ”While I look forward to considering proposals to address the potential conflicts of interest at proxy advisory firms and the questions regarding the accuracy and transparency of their research and voting recommendations, I do believe we must look at the proxy voting system holistically because of its complex mechanics.”
Hmm, I didn’t know that proxy firms have conflicts of interest or that their research isn’t accuarate or transparent. Oh, wait a minute – the Commissioner only said there were potential conflicts. And that there were questions about accuracy and transparency. Not that there are actual inaccuracies or obfuscations. Hey, we better get the SEC looking at these potential problems! Lord knows there’s a dearth of actual problems out there. And doesn’t Commissioner Casey also decry the “expansion of the objectives and purpose of the securities laws”? Since when did “the objectives and purpose of the securities laws” include regulation of the recommendations of proxy advisory firms?
Ok, I think you get my point. And maybe I’m not as in love as I thought I was. Well, as Gloria Gaynor says (not Professor Espen Eckbo of the Tuck School of Business at Dartmouth College, as far as I know), “I will survive.”
FYI, here’s a good article on CEO pay at the Simon Property Group: http://www.breakingviews.com/2011/07/08/simon.aspx?sg=nytimes
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