Quote:
Many Americans own public company shares, either directly, or indirectly through a mutual fund, certain pension funds, or index fund.
Regulations for public companies are designed on the premise that corporate management is ultimately responsible to shareholders' interests -- which is to maximize their return. This is often done via a board of directors.
Many companies recognize that to build shareholder value for the long-term, they must participate in socially responsible decisions.
Some management does not work in either shareholders' or society's interest, but only their own.
When institutional ownership of a company (index funds, mutual funds, etc.) reaches a high percentage, management is free to provide for themselves lavish salaries and bonuses. These institutions don't vote.
Often, management proposals are passed because management, for those proposals, make non-votes and abstentions as YES votes. (index funds and many other institutional funds don't vote!)
On the other hand, shareholder proposals often fail, because non-votes and abstentions count as NO votes.
To ensure management responsiveness to shareholders, we propose the following national law:
* Shareholder-initiated proposals: do not count abstentions & non-votes in the total.
* Management-initiated proposals: count abstentions and non-votes as NO.
Quote:
Many Americans own public company shares, either directly, or indirectly through a mutual fund, certain pension funds, or index fund.
Regulations for public companies are designed on the premise that management is ultimately responsible to shareholders' interests -- to maximize company value. This is often done via a board of directors.
When institutional ownership of a company (index funds, mutual funds, etc.) reaches a high percentage, management is free to provide for themselves lavish salaries & bonuses. These institutions don't vote. There is often abuse by management & the B.O.D.
To ensure this doesn't happen, we propose a federal law:
* Shareholder-made proposals: don't count abstentions & non-votes in the total.
* Management-made proposals: count abstentions and non-votes as NO.
