Jan. 02, 2019
Dear Chairman Clayton: Please do NOT revise the shareholder proxy voting process under SEC Rule 14a-8. There is no need to revise the rules governing the proxy process. When corporations destroy our environment and harm our health, people need to be able to hold them accountable. One of the most effective ways to do that is to use shareholder power to vote on corporate practices. Shareholder resolutions have pushed oil and gas corporations to report on the risks of climate change and build business plans in alignment with the Paris Climate Agreement. They have forced companies like Kellogg and ConAgra to get conflict palm oil and deforestation out of their supply chains. Resolutions highlighting human rights risks in global supply chains have helped to curtail human trafficking and forced labor. The current shareholder proposal process is effective, efficient, and beneficial to both shareholders and the long-term well-being of the companies they hold. It has had a strong and positive effect by highlighting ineffective corporate governance, enhancing transparency, and promoting corporate actions on a range of environmental, social, and governance issues that promote economic growth and job creation over the long term while increasing long term shareholder value. Raising the ownership threshold threatens to exclude smaller investors and a diversity of voices, which will categorically diminish the equality of the system. Shareholders big and small can make and have made valuable contributions to the companies that they own. This should remain as is. The argument that shareholder resolutions are a burden on the markets is phony. Relatively few social and environmental resolutions came to a vote this year, nowhere near enough to qualify as a “burden.” The vast majority of companies never even receive a shareholder resolution. Rather, most resolutions prompt productive dialogue and improved understanding between shareholders and management, leading to significant policy changes that can transform businesses. The effort by Trump and his corporate cronies to curtail shareholder power is clearly political. They want to limit the ability of shareholders to engage with the companies that they own and to cripple the proxy process that has been in place for over fifty years. Changes designed to erode shareholder power are nothing more than still another attack on our environment and our democracy. I urge you to uphold the rights of shareholders by not making changes to Rule 14a-8. Thank you. Mr. Theodore S. Cochrane [redacted]