Texas lawmakers are taking additional measures against proxy advisory firms that oppose companies redomiciling to Texas. This comes after Dell shareholders approved the company’s relocation from Delaware to Texas, despite objections from proxy advisers.
Background
Proxy advisers are financial firms that research shareholder votes and make recommendations to institutional investors. However, some lawmakers argue that these firms’ recommendations are based on politics, social issues, or personal vendettas rather than financial returns.
Texas Senator Bryan Hughes, who chairs the Texas Senate Committee on State Affairs, expressed concerns about the influence of proxy advisers. He stated that their recommendations can be ‘inherently fraudulent’ and may not align with the fiduciary duties of asset managers.
Recent Developments
Recently, several companies, including Dell and ExxonMobil, have announced plans to relocate to Texas. However, proxy advisers such as Institutional Shareholder Services (ISS) and Glass Lewis have urged shareholders to vote against these moves.
In response, Texas lawmakers are considering expanding state regulation of proxy advisory firms. This includes requiring additional transparency measures and preventing conflicts of interest.
U.S. Representative Ann Wagner has also filed a bill to impose new rules on proxy advisory firms, including requirements for strong transparency disclosures and the prevention of conflicts of interest.
Original reporting: KTBS 3 (Shreveport) — read the source article.
