Reuters: Regulatory News: UPDATE 1-US Chamber wants SEC review of proxy adviser

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UPDATE 1-US Chamber wants SEC review of proxy adviser May 31st 2012, 19:47 Thu May 31, 2012 3:47pm EDT May 31 (Reuters) - The U.S. Chamber of Commerce on Thursday called for regulators to review the proxy adviser firm Glass, Lewis & Co, adding fuel to a simmering dispute in corporate governance. The Chamber, which represents U.S. companies large and small, said it asked the U.S. Securities and Exchange Commission to "monitor" the activities of Glass, Lewis and its owner, the Ontario Teachers Pension Plan, for potential conflicts of interest. In a case earlier this month, the Ontario pension fund opposed directors at Canadian Pacific Railway Ltd.,, the Chamber noted. Glass, Lewis then recommended that shareholders vote in favor of the Ontario pension fund. The recommendation "calls in question the role of proxy advisory firms in corporate governance" and could pose a conflict of interest, the Chamber said. Glass, Lewis did not comment. A representative for the Ontario pension fund did not immediately return messages. SEC spokesman John Nester declined to comment. Proxy voting at annual corporate meetings was once little more than a rubber-stamp of management requests. But, since the financial crisis, the area has drawn attention from institutional investors turning a more critical eye on the companies whose stock they own. In one high profile example this year, Citigroup Inc failed to get a majority of its shareholders to approve its executive pay plan including the $15 million paid to Chief Executive Vikram Pandit. Glass, Lewis had urged a vote against the plan. The U.S. Chamber's push-back against sometimes critical recommendations from proxy advisers like Glass, Lewis comes as many companies grow uncomfortable with the heightened scrutiny they are getting from shareholders, said Broc Romanek, editor of TheCorporateCounsel.net, a website for governance executives, "They're looking for any instance where they can attack the proxy adviser firms," he said. "Companies are more angry right now." Glass, Lewis of San Francisco is one of the two largest firms that advise institutional shareholders o n voting along with principal competitor, the ISS unit of MSCI Inc. The firms have previously defended their methods and approach to reviewing questions on which shareholders vote, such as the election of corporate directors and the advisory votes on pay. Link this Share this Digg this Email Reprints

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