Friday, 18 June 2010 - 01:15
Group Targets Obama Adviser Jarrett On Proxy Access
By Victoria McGrane Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A leading association of institutional investors is urging its members to directly contact senior White House adviser Valerie Jarrett in a bid to quash efforts to set a threshold for shareholders to gain so-called proxy access to nominate their own candidates in corporate elections.
At issue is a provision in the financial-overhaul bill that would give the Securities and Exchange Commission explicit authority to write a rule giving easier access to corporate voting, or proxy access. Senate Banking Chairman Christopher Dodd (D., Conn.), with the support of Senate Republicans, moved Thursday to require shareholders to collectively own 5% of outstanding shares for at least two years for proxy access.
The Senate lawmakers voted to defeat, 8-4, an attempt by Sen. Charles Schumer (D., N.Y.) to strike out the threshold.
After that vote, the Council for Institutional Investors sent its members an "urgent" e-mail alert, asking them to call Jarrett Thursday and voice opposition to the Senate change. The group represents public, union and corporate pension funds with combined assets of more than $3 trillion. The group argues that the 5% threshold would effectively bar their members from gaining proxy access.
"As a senior advisor to President Obama, Jarrett has significant influence over the ongoing House-Senate conference committee negotiations, particularly regarding the proxy access provision of the base text," the alert said.
The White House has been the leading force pressing for the 5% threshold, said a person close to the negotiations.
An administration official said that proxy access was not part of the administration's original financial overhaul proposals, and the White House has not taken an explicit position on the issue.
"We understand the concerns from the business community about this issue and have heard from business leaders," the official said. Jarrett has not made any calls to Capitol Hill on the issue, the official said.
CFA Institute, an association for investment professionals, also weighed in on proxy access Thursday. CFA Institute Managing Director Kurt Schacht wrote in a letter to conferees that the proposed 5% threshold would "render this important shareowner right useless."
Schacht argued that Congress isn't the best entity to determine the threshold for proxy voting. "We believe the Securities and Exchange Commission, which functions in closer proximity to issuers and investors alike, is in a better position to determine what ownership threshold is appropriate."
-By Victoria McGrane, Dow Jones Newswires; 202 862 9267; email@example.com
(Fawn Johnson and Damian Paletta contributed to this story.)
(END) Dow Jones Newswires
June 17, 2010 18:15 ET (22:15 GMT)
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