October 1, 2021

Agenda – SEC Issues the ‘Most Meaningful’ Updates to Proxy Voting Disclosure in Decades

This week, SEC commissioners in a four-to-one vote proposed a rule broadening the type of investors required to publicly disclose their “thumbs up” and “thumbs down” votes on executive compensation plans, marking the first time that investors such as hedge funds and endowments have been required to disclose say-on-pay votes. In the same rulemaking, the SEC also proposed amending the disclosures funds make about their votes on shareholder and management proposals. If approved, the disclosures would be made in a predetermined format, unlike the current disclosures that vary immensely from fund firm to fund firm and even from fund to fund in the same complex.

Currently, companies dig through N-PX filings or hire third parties to find out how investors voted on pay unless investors voluntarily disclose or engage earlier, sources said. Even then, it takes some time to piece together votes from all the funds at large investment firms to see how the overall firm voted, said Robin Ferracone, founder and CEO of compensation consulting firm Farient Advisors.

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