January 16, 2020
Vanessa Countryman, Secretary
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090
January 16, 2020
Re: File Number S7-22-19
Sec. Countryman:
Thank you for taking public comments on the proxy process. This is an important moment in the history of Americas economy, and it is time to update the SEC's oversight on the power of this industry, particular its two major players, Institutional Shareholder Services and Glass Lewis. The practices of these firms have been very disruptive to pensioners, retail investors, and corporate governance. If something is not done, I fear the eventual consequences could be grave.
My wife and I work at Walt Disney World, which has provided us with a good living and a great deal of pride. But every penny we make is hard-earned, and when we invest in our pensions, we expect it to be there when we retire. If proxy advisors are allowed to undermine our investments, however, we may one day find that our dream to retire is no longer sustainable.
Proxy advisory firms are insufficiently regulated, and engage in a number of unfair practices, such as failing to disclose conflicts of interest, utilizing automatic voting, and resubmitting shareholder proposals with little support. They operate mostly behind closed doors, and because of their political investing, they do not accurately represent the views of those to whom they owe their livelihoods.
Some may agree with their positions, but many do not. I even support some of their views. But it is inappropriate to exploit other peoples money to advance these views. Anyone advising an investment fund should do so only on the basis of earning as much as possible for beneficiaries.
They could be forgiven if their political investing strategies delivered even moderately good returns. But they typically support ESG strategies that have been shown to deliver over 40 percent less than the overall stock market. This is one reason why we have a nationwide pension crisis how many private investors are as upside down as these funds? They wouldnt tolerate it, nor should we.
Workers demand that their pensions are protected. I have faith that the SEC is listening, and your recent action to deem proxy advice as a solicitation is an important first step. I hope there will be many more including finalizing the SEC's newly proposed rule on proxy advisory firms.
Sincerely,
Walter Lipton