Rhode Island General Treasurer Seth Magaziner joined a group of treasurers and investors in sending a joint statement to Congress opposing the "Financial CHOICE Act" which drastically reduces corporate accountability and denies all but the wealthiest shareholders the ability to influence company policies.
"This legislation would remove a critical tool that we use to keep corporations accountable to their shareholders and prevent the kind of mismanagement that led to the global financial crisis in 2008," said Treasurer Magaziner. "Too many Rhode Islanders have suffered due to irresponsible financial practices and a lack of corporate oversight. We cannot allow big corporations to repeat the mistakes of the past."
The Act makes it impossible for all but the wealthiest shareholders to submit proposals at a company's annual meetings. Shareholder engagement strengthens oversight of companies, allowing every day investors, like the public employees served by the Rhode Island pension system, to have a voice at the table and hold management and boards accountable.
Currently, the Securities and Exchange Commission allows any investor who owns at least $2,000 in stock to file a proposal at a company's annual meeting. The proposed legislation would raise that limit to only shareholders who own 1% of company stock.
"The actions of publicly traded companies have tremendous effects on people's lives, the economy and the environment," continued Treasurer Magaziner. "This measure would bar all but the wealthiest investors from having a voice in those decisions."
Recently, Rhode Island was among 62% of ExxonMobil shareholders who voted in favor of a proposal requesting the board of directors provide a detailed analysis of the risks that climate change may pose for the company. Under the Financial CHOICE Act, an investor would be required to hold 4,237,000 shares, worth $344 million, of ExxonMobil stock to file such a proposal with the company.
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Evan England, Director of Communications Office of the General Treasurer (401) 439-2199 / evan.england@treasury.ri.gov