Senator Thomas Carper, a Democrat from Delaware, introduced amendments May 6 that seek to remove the proxy access and majority voting provisions from Senator Christopher Dodd's financial reform bill, which is now being debated on the floor of the U.S. Senate.
Carper's measure to remove the majority voting section is supported by Republican Senators John Ensign of Nevada, Judd Gregg of New Hampshire, and Bob Corker of Tennessee. Carper's proxy access amendment is backed by Gregg and Ensign.
Section 972 of Dodd's "Restoring American Financial Stability Act" affirms the authority the SEC to issue a proxy access rule, but it doesn't set any specific standards for access. Section 971 directs the SEC to work with the national stock exchanges to make it a listing requirement for companies to have majority voting in uncontested board elections.
The Council of Institutional Investors, which represents public and labor pension funds, is urging its members to contact senators to urge them to oppose the Carper amendments.
"Investors need stronger market-based tools to hold managers and boards accountable," the council said in an alert to members. "We accordingly agree with President Barack Obama's recent remarks at the Cooper Union in New York City that important reforms are needed to 'give shareholders new power in the financial system... so that investors and pension holders have a stronger role in determining who manages the companies in which they've placed their savings.' "