Economists Comment to SEC Proposal on Proxy Advisors

On January 15, a group of over 60 leading finance professors from major American universities filed the following comment to the SEC to ask a revision of the proposed draft regulation:

Dear Chairman Clayton and Members of the Commission:

We share the Commission’s concerns about concentration in the proxy advisory market. Yet, we disagree with the following proposed remedies: 1) forcing proxy advisors to share their opinions with managers ahead of time and 2) treating opinions on proxies as proxy solicitations. By increasing the cost of opining on proxy statements such proposals will only discourage new entry into the proxy advisory market and exacerbate the problem of market concentration in this sector. We ask the Commission to strike these proposed changes.

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