CII Advocacy Priorities
Grounded in CII member-approved policies, CII’s advocacy priorities for 2026 include:
- Proxy vote reliability: end-to-end vote confirmation
- Proxy vote transparency: class-by-class vote disclosure
- Executive compensation transparency: non-GAAP reconciliation
Investors and the companies in which they invest should have confidence that shareholders’ votes are counted as instructed. Yet the complexity of the infrastructure underpinning proxy voting, known as “proxy plumbing,” has historically presented challenges to this fundamental expectation.
CII is co-leading a working group co-chaired by the Society for Corporate Governance to ensure that the various intermediaries in the voting chain, including banks, broker-dealers, public companies, tabulators, transfer agents and tabulators work together to ensure that beneficial shareholders can confirm that their votes in contested director elections were counted correctly. This project follows from a predecessor initiative, also co-led by the CII and the Society, which ushered in significant improvements in the ability of beneficial shareholders to confirm for uncontested shareholder meetings that their votes were counted as directed.
Proxy vote transparency: class-by-class vote disclosure
For investors in companies with two or more classes of stock with differential voting rights, understanding the impact rendered by voting of each share class on shareholder meeting outcomes is a guessing game. Current SEC regulations do not require multi-class companies to disclose vote results by share class to the public.
CII is working with policymakers to ensure that multi-class companies provide class voting results in their public filings following their annual shareholder meetings. This additional disclosure would clarify the extent to which the preferences of a company’s public shareholders, who generally hold the class of stock with lower relative voting power, are consistent with the preferences of founders, insiders and other holders of the class with higher per-share voting rights. Potentially, investors could factor into their valuation models situations where founders and public shareholders are substantially at odds or drifting in opposite directions. Class-by-class disclosure also may prompt value-enhancing conversations among board members and managers. Further, investors would get a clearer view of voting results without the aggregate vote totals being obfuscated by the higher voting rights of founders and insiders.
Executive compensation transparency: non-GAAP reconciliation
While there may be reasonable reasons for companies to use non-GAAP financial measures in executive compensation programs, there is the potential for boards to misuse them in a manner that may reward executives despite poor performance. Due to a loophole that permits companies not to reconcile non-GAAP target measures used for executive compensation with GAAP, investors are not always able to monitor the appropriateness of exclusions and other adjustments to GAAP being incorporated into executive compensation decisions.
Importantly, this loophole applies only to the Compensation, Discussion & Analysis (CD&A) section of the proxy statement. For over two decades, the SEC has generally required companies to give equal prominence to GAAP and non-GAAP financial measures as well as provide a quantitative reconciliation of the numbers in most financial filings. The solution is straightforward: The SEC should require that the CD&A include an explanation of why non-GAAP measures are better for determining executive pay than GAAP, and provide a quantitative reconciliation (or a hyperlink to reconciliation in another SEC filing) of these two sets of numbers.
