House Passes Bipartisan Bill That Includes Investor ProtectionsCII applauded the House passage July 17 of two investor protection provisions in a bipartisan bill—the JOBS and Investor Confidence Act of 2018—that includes several investor protections. "We are pleased that several investor protection provisions were included in today’s bipartisan bill" said CII Executive Director Ken Bertsch. "We are particularly supportive of two of the bills’ provisions, one affecting trading plans and the other providing more information about multi-class stock structures." CII believes the first would help ensure that corporate insiders could not indirectly engage in illegal insider trading through changes to their trading plans. The second provision would require public companies with multi-class share structures to clarify disclosures about certain shareholders’ voting power. CII said the disclosures were no substitute for stock exchange listing standards to require time-based sunsets on newly listed dual class companies, but that improved disclosure is needed and an important supplement to stronger listing standards.
CII Takes Netflix to Task for Ignoring Shareholder' Wishes—AgainIn a recent letter to Netflix directors, CII likened the company’s cavalier behavior toward its shareholders to the distaste for democracy displayed by Frank Underwood, a lead character in Netflix’s original series House of Cards. “Underwood’s aside as he recites the oath of office that ‘democracy is so overrated’ may provide a provocative plot point in a fictional political drama, but it is a poor precept to apply to public companies,” CII Executive Director Ken Bertsch wrote in a July 5 letter to Netflix’s lead independent director and two other members of the board’s nominating and governance committee. The letter chided Netflix for failing to respond to five shareholder proposals that each received a majority of the votes cast at its June 6 annual meeting. Netflix is an outlier among large-cap companies for repeatedly disdaining majority-shareholder requests. For example, 2018 was the fifth time in six years that Netflix took no action after shareholders overwhelmingly backed proposals to adopt a majority voting standard in uncontested director elections and to replace supermajority voting provisions in the company’s charter and bylaws with a simple majority standard.
Podcast: What Investors Need to Know about CFIUSIn this new podcast, Clay Lowery, a managing director at Rock Creek Global Advisors and former assistant secretary for international affairs at the Treasury Department, talks with CII’s Brandon Whitehill about CFIUS, the Committee on Foreign Investment in the United States. CFIUS is a regulatory body charged with reviewing M&A deals that result in foreign control of U.S. companies and assets. The podcast discusses CFIUS’s authority to scrutinize, alter, or altogether block, M&A deals. It also explores the Foreign Investment Risk Review Modernization Act (FIRRMA), which would strengthen the committee and have broad implications for many transactions, including cross-border investments, joint ventures, venture capital and hedge funds.
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Fair Financial RulesSensible, effective rules safeguard investors and strengthen markets.
Dual-Class StockEach share of a public company's common stock should have one vote.
Majority Voting for DirectorsIn uncontested elections, directors should be elected by majority vote.
Universal ProxyIn contests, investors should be free to vote for the nominees they prefer.
News & Highlights
- July 20 - Apple, Starbucks Have an Answer for the Tight Job Market: Hand Out Stock
- July 19 - Bank of England Probed Risks to KPMG’s Viability after String of Scandals
- July 17 - House Passes Expansion of JOBS Bill
- July 17 - Investors Smell Action at Germany’s Top Activist Bet
- July 16 - SEC Stops Prodding Companies to Detail Climate Change Impacts
- July 11 - NYSE Opposition to Trading-Fee Review Puts Companies and Some Shareholders at Odds
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