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The U.S. Securities and Exchange Commission said Tuesday that it will not enforce Trump-era rules for shareholder advisory firms, giving a hard blow to companies like ExxonMobil that have argued that CEOs exercise too much power.
In a statement, committee chairman Gary Gensler dit has asked agency staff to review the restrictions for delegated advisors that the committee adopted in July 2020. Staff should also reconsider the guidelines for discouraging CEOs that the published in 2019, He said.
The SEC dit “It will not recommend implementing actions” based on the agency’s 2019 guidelines for delegated advisers and the 2020 rules, now that the commission “is considering a new regulatory measure in this area”.
Gensler’s decision marks a victory for Institutional Shareholder Services and Glass Lewis, the two most important consulting firms. Public companies represented by the U.S. Business Roundtable and the U.S. Chamber of Commerce had pressured the SEC to impose regulations on CEOs.
But investors, who use recommendations from CEOs to vote on corporate boardroom issues, encouraged SEC action.
“It’s June Christmas for investors,” said Amy Borrus, executive director of the Institutional Investors Council. “Today’s decision by SEC President Gensler for the agency to consider reviewing its controversial actions on representative advice is a great triumph for investors and representative advisory firms that would have been chained by the regime. regulator that the commission approved in the previous administration “.
ISS sued the SEC to stop its 2020 guidance and rules, and this case is still pending in the courts. Oral arguments are expected by June 7th. SEC delegate counseling regulations are expected to reach ISS and Glass Lewis with new legal costs.
“We welcome the SEC’s announced decision to consider reviewing its chief executive’s regulatory decision,” ISS said. dit in a statement.
ISS and Glass Lewis provide investors with advice on how to vote on corporate issues ranging from the disclosure of climate change to the election of board members, and their recommendations can influence.
ISS and Glass Lewis respectively avalat three and two ExxonMobil board nominees presented by engine No. 1 of the activist hedge fund Last week. It was confirmed that at least two of the candidates won seats.
In a 2020 letter to the SEC, Exxon also said it supported the agency’s regulations for CEOs.
Dennis Kelleher, chairman of advocacy group Better Markets, said: “Trump’s SEC actions were incorrect and probably illegal. Given that the SEC exists to protect investors, not for current management, the current actions are successfully initiating the process to restore investor rights and reaffirm investors. “
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