Comments on Proposed Rule: Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice December 29, 2019
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090
Re: File Number S7-22-19
To Whom It May Concern:
My name is Tanja Kemp, and I am a computer analyst in Orange County, Florida. I have recently become aware of the SEC’s November vote regarding proxy advisory firms, and I very much appreciate a chance for the public to weigh in. It seems to me these firms are not being held as accountable as they should be, and I strongly support the SEC taking additional steps to provide oversight for the industry.
I have a family and am saving for retirement, like millions of other prudent people in our country. I believe every hardworking American should be entitled to a safe and secure retirement, and certainly those with public employee pensions. In the last decade, the Florida Retirement System fund averaged around 12 percent, including a minuscule 0.29 percent return in 2012. It is impossible, given the growth in recent years, to conclude that it is due to anything other than wanton mismanagement and neglect. Is that what our public servants deserve?
A likely culprit, or at least part of the problem, is proxy advisory firms. These firms often support ESG investing strategies which the data shows deliver more than 40 percent lower returns than the standard index funds. Proxy firms have become increasingly politicized in recent years, and pensioners are paying the penalty as a result. These firms are imposing their own moral objections toward certain companies that could be earning more for retirees, and often their criticisms are not even warranted.
I believe investing—especially on behalf of others—should not be used as a tool for other purposes like social justice. People are entitled to their own views, and the retirements that they depend on should not be used to express the views of others. They don’t have a choice. A fund manager should be respectful and do their fiduciary duties and not impose their will on others who cannot afford to fight back.
I consider myself a reasonable person who wants a better world, but often proxy advisors’ objections are not black and white. It’s an increasing problem throughout our “cancel” culture, suggesting that anything less than complete devotion to an ideological agenda is worthy of condemnation. I know corporations can always do better, but I also see that most are trying, and singling out companies in certain fully legal industries isn’t fair. It is upending corporate governance and will end up decimating the domestic economy.
I am particularly alarmed to learn that the proxy advisory field is really just two firms that control more than 90 percent of the market and have little transparency into their strategic process. Few other industries enjoy the kind of unchecked power this one does, and that needs to change for certain. There should also be greater scrutiny of these firms. There should also be more competition in the field, including firms from across the political spectrum. It’s ridiculous the amount of power that these two firms have been entrusted with, including hundreds of billions of dollars of pensions across the country.
I know the SEC takes this issue seriously and will do a good job of reviewing the matter. Again, thank you very much for your time and attention to this issue and for allowing me the chance to speak my mind.
Sincerely,
Tanja Kemp