On the Issues
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SHAREHOLDER RIGHTS Senator Levin is a long-time champion of shareholder rights. As far back as 1991, he has advocated strengthening the ability of shareholders to nominate directors at the companies they own; to get accurate, complete and comprehensible information about company finances, performance, and executive pay; and to file shareholder proposals at annual meetings. In 2002, Senator Levin introduced the Shareholders' Bill of Rights Act, S. 2460, to provide shareholders with added protections against the corporate misconduct exposed by the scandals involving Enron, Tyco, Worldcom, and other U.S. publicly traded corporations. Also in 2002, Senator Levin, then chairman of the U.S. Senate Permanent Subcommittee on Investigations, conducted a yearlong, bipartisan investigation into Enron, a major focus of which was examining the role of the Enron Board of Directors. [Learn more about the Enron investigation] On May 7, 2002, the subcommittee held a hearing and took testimony from five of the Enron directors as well as corporate governance experts. On July 8, 2002, the subcommittee issued a bipartisan report which found that the Enron Board had failed to safeguard Enron shareholders and had contributed to the company's collapse by allowing Enron to engage in high risk accounting practices, inappropriate conflict of interest transactions, extensive undisclosed off-the-books activities, and excessive executive compensation. This report presented a number of recommendations to strengthen boardroom oversight and improve corporate governance. A number of the measures contained in the Levin bill, S. 2460, and recommended in the subcommittee report were later included in a Senate corporate reform bill, S. 2673, later enacted into law as H.R. 3763, the Sarbanes-Oxley Act of 2002. Senator Levin has also worked hard to put additional teeth in our investor protection laws. In 2003, he introduced S. 183, “The SEC Civil Enforcement Act,” to enhance the ability of the SEC to detect, investigate, and punish corporate and individual violations of the federal securities laws. Related links:
Senator Levin has also fought for shareholder rights by supporting important new reforms at the stock exchanges and the Securities and Exchange Commission (SEC). In 2002 and 2003, for example, he supported proposals by the New York Stock Exchange to require all corporate stock option plans to be approved by shareholders and to bar brokers from voting on these plans absent specific shareholder instructions. These and similar proposals were approved by the SEC in 2003 and are now in effect. Senator Levin is also a strong supporter of proposals to enable shareholders to nominate directors at the companies they own. In 2003 and again in 2007, Senator Levin wrote to the SEC in favor of giving shareholders a stronger voice in nominating the boards of directors at the companies they own. As of 2007, the SEC is still considering such proposals. Related link:
Senator Levin also supports giving shareholders a voice on executive compensation packages. In 2007, he cosponsored S. 1181 to require a nonbinding shareholder vote on executive compensation packages, which would force corporate boards to justify compensation proposals to shareholders. As part of the confirmation process for the Obama Administration's three top financial nominees, Senator Levin ment with Mary Schapiro, nominated to chair the Securities and Exchange Commission. Senator Levin also sent her a series of written questions, which she answered. Related link: |
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