Vote for capitalism, not the one percent
Dear Editor, U.S. Rep. John Faso, R-Kinderhook, has an opportunity to take a stand for the little guy.
A bill now before the House would strip all but the largest investors of the rights to petition the management of companies that they own to make changes that would benefit corporate performance.
At present, a shareholder can file a resolution with a company if she has held $2,000 worth of shares in a company for at least a year. This threshold allows a broad range of shareholders to participate in the proposal process.
The new bill, misleadingly labeled the Financial Choice Act, would require 1 percent ownership over three years to submit a proposal. For context, a shareholder would have to hold over $7 billion worth of Apple shares for three years to qualify. This ownership threshold arbitrarily limits access to the resolution process at large companies to a handful of fund managers who control billions of dollars.
Resolutions help spur dialogue between shareholders and management and are typically withdrawn prior to a vote if management agrees to address area of concern. For example, Starbucks recently agreed to eliminate the routine use of medically important antibiotics from the company’s poultry supply chain by 2020, after shareholders raised the issue of the growing threat of antibiotic resistance.
The resolution was brought by a financial company, Green Century, where shareholders identified overuse of antibiotics as issues of major concern. Starbucks stock represented between 1 and 2 percent of Green Century’s holdings, a significant percentage. However, the mutual fund’s ownership stake falls far short of the 1 percent of Starbucks required under the draft language and they would thus have been prevented from engaging with Starbucks.
This bill is a naked power grab by big companies to avoid dealing constructively with their owners.
Faso should support 99 percent of Americans to have a voice in the companies we own by voting no on the Financial Choice Act. Eban Goodstein Tivoli, N.Y.