October 15, 2013
Elizabeth M. Murphy
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20509-1090.
Dear Ms. Murphy:
As the Chairman of the New York Stock Exchange’s Proxy Fee Advisory Committee, I am writing to encourage the Commission to approve the proxy fee proposal submitted by the NYSE.
The Committee engaged in a thorough, disciplined, and fact-based process to develop a proposal that served as the basis for the NYSE’s submission to the SEC. We began with the premise that the prior fee schedule, which was approved by the SEC, satisfied the regulatory requirements at the time in providing for reimbursement for reasonable expenses incurred in connection with the distribution of proxy materials. We then conducted an independent evaluation of how the underlying work and expenses have evolved (including a detailed analysis of the categories of work currently performed by Broadridge, the costs incurred by Broadridge and by bankers and brokers, and independent investment analyst reports regarding Broadridge’s margins). We then developed a fee proposal that, despite inflation, reduced overall fee levels, better matched the fee structure to the work performed, eliminated anomalies arising from the prior fee structure, increased transparency by renaming certain fees, and supported retail voting participation. We also “reality tested” the fee structure to assess whether there would be unintended consequences of significantly changing fees for categories of users.
The net result of this process was a fee structure that the Committee believes not only provides for reasonable reimbursement of expenses, but also is more transparent and fair than the one currently in place. It is also a proposal that has received widespread support from those who actually pay the fees. Failing to approve the proposed fee structure would result in keeping in place a fee structure that is less connected to the current work and costs associated with processing proxy materials, less fair, less transparent – and more expensive. It would also represent a rejection of a process that has been used previously in developing such fee structures, with no discernible path forward.
Accordingly, I urge the SEC to adopt the NYSE’s proposal as submitted.
Paul F. Washington