Hedge Fund Disclosures on CEO Pay Votes Get Renewed SEC Push (1)

Sept. 29, 2021, 3:18 PM

The U.S. Securities and Exchange Commission is taking up a long-delayed bid to force money managers to disclose whether they voted in support of shareholder proposals on executive pay.

The SEC proposed the regulation, which would apply to hedge funds and pensions with more than $100 million in stocks, on Wednesday at Chair Gary Gensler’s first policy meeting since taking the helm of the agency earlier this year. The regulator was required to write the proxy-vote disclosure rules more than a decade ago, but has not finished them following pushbackfrom investment firms.

The disclosure rule is just one of dozens of items on Gensler’s to-do list. He’s laid out an ambitious agenda, calling for new regulations on everything from how stocks trade to clamping down on the once red-hot SPAC market. Last week, he said at an industry conference that finishing other post-crisis regulations related to executive compensation would also be a priority during his tenure.

Read More: Wall Street Pay Clawback Rule to Get New Push at SEC

The renewed SEC push on fund disclosures is likely to please Democratic lawmakers who have pressed the regulator for years to finish the so-called say-on-pay requirements, part of the 2010 Dodd-Frank Act. The agency’s new plan comes more than a decade after it started requiring companies to allow shareholders to weigh in on pay packages for top executives.

The agency’s commissioners voted 4-1 to propose the new regulation and will seek feedback for 60 days. Hester Peirce, a Republican on the panel, dissented. Elad Roisman, the agency’s other GOP member, raised concerns but voted to open it for public comment.

The new regulation would also make changes to forms that investment firms file with the agency regarding their proxy votes. Some of the alterations under consideration include standardizing how proxy proposals are described and categorized, as well as requiring funds to disclose when they don’t vote in proxies because their shares are on loan, according to the SEC.

(Updates with agency vote starting in second paragraph.)

--With assistance from Miles Weiss and Jesse Hamilton.

To contact the reporter on this story:
Ben Bain in Washington at bbain2@bloomberg.net

To contact the editors responsible for this story:
Jesse Westbrook at jwestbrook1@bloomberg.net

Elizabeth Dexheimer

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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