Securities and Exchange Commission Must ‘Prevent Further Politicization of Shareholder Proxies’ Over Votes on Universal Health Coverage Proposal, Editorial States
"It's corporate proxy season, and as usual, the shareholder activists are out to make a splash," but this year "there's an important twist: the Securities and Exchange Commission is helping them," a Wall Street Journal editorial states (Wall Street Journal, 6/4). SEC, in a reversal of a previous position, has told companies that they cannot exclude a health care proposal from proxy materials provided to shareholders (Kaiser Daily Health Policy Report, 5/27). According to the Journal, this year labor activists "asked for proxy space on the 'principle' of universal health care," because "voting on general principles isn't shareholder micromanagement and so would evade SEC strictures."
The editorial continues, "How universal health care would enhance shareholder value is at best unclear, however." The Journal adds that "these proposals are not about investment returns" but "about browbeating corporate America into endorsing the union health care agenda." The proposals were designed "to echo through national political debates and get businesses on record as supporting 'universal' (read: government) health insurance," the Journal states, adding, "This should have been reason enough for the SEC to throw the proposals out," but "at every company where they were offered, the SEC approved them." The editorial continues, "We're also told the staff also proceeded on its own, without the approval of SEC commissioners." According to the Journal, "If that's true, this is an abuse of discretion by the staff, or an abdication by the commissioners, or both."
According to the editorial, SEC this year "reviewed 14 of these health care proposals," and, "[g]iven their success, we can expect more of them next spring." The Journal concludes, "Since the SEC staff is determined to play dumb about their political purpose, the commissioners will have to exercise some adult supervision to prevent further politicization of shareholder proxies" (Wall Street Journal, 6/4).
