Dec. 14, 2021
Via Email December 14, 2021 Vanessa A. Countryman Secretary Securities and Exchange Commission 100 F Street NE Washington, DC 20549-1090 Re: File Number S7-11-21 I am writing regarding the Securities and Exchange Commission proposed rules “Enhanced Reporting of Proxy Votes by Registered Management Investment Companies; Reporting of Executive Compensation Votes by Institutional Investment Managers (File No. S7-11-21)” proposed on September 29, 2021. As You Sow supports these rules, as we believe disclosure of voting records to be critical. The disclosure that will flow from the adoption of this proposal will shed much needed light on several of the murkiest components of proxy voting. Founded in 1992, As You Sow promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. Our efforts create large-scale systemic change by establishing sustainable and equitable corporate practices. For the past seven years we have issued a report “The 100 Most Overpaid CEOS: Are Fund Managers Asleep at the Wheel” that explores fund voting on compensation to the extent it is available. The data has been welcomed by investors, with the report downloaded frequently. This report, representing the broadest survey of institutional voting ever done on the topic, showed that pension funds are more likely to vote against overpaid packages than mutual funds. As You Sow’s experience may be illustrative of the need for increased disclosure among 13F filers. There has not traditionally been a requirement for public pension funds to disclose their votes. In the spirit of good governance and transparency, a number of pension funds do provide beneficiaries and the public with the opportunity to review their shareholder proxy votes. As the Canadian Pension Plan Investment Board states on its website, “One of the most effective mechanisms we have to engage with public companies is voting our proxies. As an engaged owner, we are transparent in our voting activities and implement the leading practice of posting our individual proxy vote decisions in advance of meetings.” However, those funds were the exception rather than the rule. In the first edition of our report “The 100 Most Overpaid CEOS: Are Fund Managers Asleep at the Wheel”, published in 2015, we identified and reported on only nine such funds. For the next report in 2016 we sought data at 75 public pension funds using various specific open record requests, similar to those authorized on a federal level under the Freedom of Information Act (often referred to by the acronym, FOIA). As You Sow submitted dozens of requests, and found the challenges, costs of filing the requests, and the responsiveness to the requests to vary considerably. Some funds responded within a day of receiving the request, and others issued multiple 90-day delays. That year we expanded our disclosure to include results from 32 funds. We found the process cumbersome given the various rules. While most funds provided the material at no cost, there were some that required a payment. In one case, the Oklahoma Retirement System, the cost was several hundred dollars. Two states – Tennessee and Virginia – required that the FOIA be filed by a resident of the state. One sent documents with type so small we could not decipher it. Eventually we turned to an outside service provider (Insightia, then Proxy Insight) that does that data collection. However, this data should not be available only for those who can afford subscriptions to data services. We appreciate the expansion of disclosure. Our organization is an Associate Member of the Council of Institutional Investors, a nonprofit, nonpartisan association primarily made up of U.S. public, corporate and union employee benefit funds. Regarding the more specific details of the release we wish to offer support for the comments made by the Council of Institutional Investors. We urge the Commission to promptly complete this rulemaking. This is an important first step, but we encourage you to remember that shareholders want voting information on all topics, not just compensation. Thank you for the opportunity to share these comments and for your consideration. Melissa Walton Executive Compensation & Say on Climate Associate As You Sow ~Building a Safe, Just and Sustainable World since 1992~