House Passes Bill to All-But-Eliminate Shareholder Resolutions
(3BL Media/Justmeans — As the Trump administration continues along its circus parade route, unleashing one spectacular display of self-destructive grandiosity after another, Republicans in Congress are using the distraction to try and sneak through some very damaging legislation, gift-wrapped offerings, in the form of additional game-rigging, to their wealthy patrons.
If you’ve heard about this at all, you’ve probably heard about the festering attempt in the Senate to ram through an “anything-but-Obamacare” health bill, without any hearing whatsoever. But there is another bill, aimed at eviscerating Dodd-Frank.
Dodd-Frank was a response to the the shameful feeding frenzy that led to the 2008 financial crisis in which thousands lost their homes. That bill did not pass however, until it was sufficiently weakened by Republicans to the point where it would not avoid another crisis. The crisis came about after the repeal of Glass-Steagall which worked effectively for decades after the 1929 crash. (Oh, how quickly we forget!)
We're talking about just one particularly egregious aspect of this bill just passed by the House of Representatives, called the Financial Choice Act, that rides alongside calls to scrap the Consumer Financial Protection Bureau, or revoking the authority for the FDIC to take over a failing firm. This particular element appears intended to specifically target attempts by shareholders to rein in the behavior of companies regarding issues that said shareholders consider important.
At issue are shareholder resolutions, which were established by SEC rules, that allow shareholders to weigh in on issues of concern, which often hold management accountable on ethical issues. While not legally binding, the resolutions do carry weight since the same majority that passed the resolution could choose to vote out any board members that chose to ignore it.
This is particularly relevant since just two weeks ago, a 62% majority of Exxon-Mobil shareholders passed a resolution demanding that the company produce an annual report that discloses the financial risks associated with global efforts to reduce greenhouse gas emissions. Similar resolutions have also been passed for Occidental Petroleum and the electric utility PPL Corp. In fact, according to the Washington Post, nearly 20% of the roughly 1,000 shareholder resolutions submitted last year concerned corporate policy on climate change.
Under the current law, any shareholder who owns either $2,000 of stock in a company or 1 percent of the corporation’s total shares, can submit a shareholder resolution. Under the Financial Choice Act, the $2,000 threshold would be eliminated, meaning that the shareholder would need to own at least 1% of the company stock before they could submit a resolution. In the case of a company like Exxon-Mobil, that would mean owning in excess of $3 billion in stock.
This is yet again another move attempting to shift our society from a democracy to a plutocracy. As they often do, the authors use words like ‘choice’ or ‘freedom’ to refer to an absence of control or regulation, in other words, the opposite of government. In actuality, the choice is usually only available to those they favor, or those who can afford it, which are often one and the same.
This bill appears to lean towards extending additional favors to the oil and gas industry, rather than acknowledging that the world is ready to move on to cleaner options. Some have asserted that the Trump administration is seeking to gamble our future on an alliance with oil-rich countries like Saudi Arabia and Russia, seceding from the world community in order to perpetuate the dominance of fossil fuels, much as the American South once seceded from the Union in order to cling to the anachronistic and barbaric institution of slavery.
Fortunately, the bill is not expected to pass the Senate, at least not in its current form.