December 17, 2019
Dear SEC officials, In recent years, CEOs and other managers in big public companies are becoming increasingly entrenched on average across big public companies. This can be seen from increasingly unequal pay for top management versus other firm employees, an increased level of empire building (mergers and acquisitions with poor returns), and increasingly used dual-class stock structures. It's my opinion that while many of these executives are brilliant and capable, too much power has shifted away from the owners of big public firms (shareholders) and other stakeholders towards management. We need more checks on management power. One check on management power, although not the most effective, are proxy voting advice firms. These firms are currently able to act as a check on management's power by advising shareholders to vote against management when they deem that changes need to be made. This newly proposed rule essentially eliminates this check on management, by forcing these proxy voting advice firms to submit their proposals to management first, and opening them up to being sued if management does not like their advice. These rules further entrench management and deeply undermine shareholder votes. Imagine if I wanted to say "vote against the current politician," I had to first submit my proposal to the current politician in power and I would open myself to fraud lawsuits if the politician didn't like what I said. This is not a legitimate voting system, it's a sham. This voting system obviously helps entrench the sitting politician and eliminates checks on his/her power. This is essentially what this rule does with shareholder votes. Similarly, imagine if an independent organization like Consumer Reports was able to be sued each time it published a negative review of a product. That would undermine the admirable mission of that organization to help consumers make wise choices. When Consumer Reports publishes its research, it is not forcing consumers to choose only the highest-rated products, instead, it is helping to educate the public, allowing them to make better decisions. This proposed rule also undermines free speech. Proxy voting advice firms should be free to say whatever they want to unless it falls within the bounds of libel or gross defamation. They have maintained their legitimacy because of their commitment to offering responsible and well-reasoned opinions to voters. They will continue to be influential only if they continue to offer responsible advice and if you do not subject them to new rules that would castrate the valuable role they play in good corporate governance. In summary, I strongly oppose this new rule. Sincerely, Colby Davis Vice President of Sales and Marketing