5113 Verdome Lane
Houston, Texas 77092
Chairman Arthur Leavitt
Securities and Exchange Commission
450 5th Street NW
Washington, D.C. 20549
Dear Chairman Leavitt:
I am writing to make known my serious objection to the SEC's proposed rules (S7-25-97). These rules, if adopted, would seriously undermine the shareholder process and give companies free license to make dangerous, shortsighted management decisions without review by, or accountability to, their investors.
Today's shareholder process is a responsible one and a powerful tool of democracy. Shareholder participation in corporate governance has led to many important changes in corporate behavior. For example: the establishment of clear standards for corporate environmental behavior, divestment in South Africa, and an end to the use of child labor and corporate governance, to name a few.
The shareholder process allows for dialogue between shareholders and corporate decision-makers and helps find real solutions to urgent social, environmental, labor and human rights issues. The following provisions are especially problematic:
- The new rules would block shareholder resolutions that address less than 3% or $10 million of a company's business. This provision would effectively eliminate many emerging issues or business practices that are not easily measured in dollars such as sweatshop labor or pollution.
- The new rules provide an automatic qualification for any resolution sponsored by the owners of 3% of a company's shares of stock. For most Fortune 500 companies, 3% of the shares means more than $1 billion worth of stock, which means only the biggest investors could wield this kind of clout. This is grossly discriminatory.
Please protect the rights of American shareholders to address irresponsible corporate behavior through the shareholder resolution process and stop these regulations from going through.
Jamie L. Weaver