Steil Introduces Legislation to Rein in the Proxy Advisor Duopoly

Washington D.C. - Today, Congressman Bryan Steil (WI-01), introduced the Protecting Americans' Retirement Savings from Politics Act. This legislation will impose new rules on the proxy advisor duopoly that require strong transparency disclosures and prevent conflicts of interest that have tarnished proxy advice and corrupted corporate governance. Congresswoman Ann Wagner (MO-02) is an original cosponsor of this bill.

"Too often, proxy advisors have encouraged votes that run counter to the economic interests of retirees and seniors. Investment advisors and pension funds should be focused on securing your retirement, not advancing their political agenda," said Steil. "My bill will bring accountability and transparency to the proxy advisor duopoly and help end the politicization of Americans' retirement funds. I'd like to thank Congresswoman Wagner in joining me on this important legislation."

The Protecting Americans' Retirement Savings from Politics Act will:

• Provide transparency and accountability to the proxy advisory industry, prohibit robo-voting, prohibit the inherent conflict of interest associated with consulting services, and require proxy advisory firm clients to issue annual public reports on their proxy voting.
• Require large asset managers to explain how they use proxy advisor recommendations and put their customers' economic interests first.

• Roughly 70% of the outstanding shares in publicly traded U.S. companies are held by institutional investors such as mutual funds and pension funds. American families depend on these institutional investors to manage their retirement savings, including voting their shares. However, to save costs, many institutional investors rely on proxy advisory firms for recommendations on how to vote the shares under their control.
• The market for proxy advice is dominated by two firms, Glass Lewis and Institutional Shareholder Services (ISS), which jointly have 97% market share. ISS is a German-owned company and Glass Lewis is owned by Peloton Capital, a private equity fund. Often, these two proxy advisory firms successfully pressure institutional investors to vote contrary to shareholder economic interests and in support of woke political initiatives.
• Steil previously introduced similar legislation in the 118^th Congress, where it passed by a vote of 215-203.