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Council of Institutional Investors Comment Letter to SEC on Proposed Pay Ratio Rules (PDF)

"The members generally agreed that the Commission has done an admirable job in proposing to implement Section 953(b) in a flexible manner that attempts to strike an appropriate balance between providing potentially useful information to investors and limiting company compliance costs.... Two of the three members were 'not comfortable' with the proposed exemption from the pay ratio disclosure requirements for emerging growth companies, smaller reporting companies, foreign private issuers, and MJDS filers .... The three members generally agreed with the SEC that, consistent with the language of Section 953(b), all employees, including non-U.S. employees, should be considered in the calculation of the median[.]"

Council of Institutional Investors Overhauls Its Policy on Executive Compensation

"CII's revised policy reflects its goal of encouraging companies to simplify plan design, use defensible performance metrics that are linked to long-term company performance and clearly articulate the terms of their executive pay programs.... [S]ome of the suggested 'solutions' will likely be viewed as a bridge too far that could put some companies at a competitive disadvantage in recruiting and retaining top talent."

Council of Institution Investors Criticizes DOL Fiduciary Voting Proposal

"[The Council of Institutional Investors (CII)] disputes the DOL assertion that there is 'a persistent misunderstanding among some stakeholders that ERISA fiduciaries are required to vote all proxies' and that 'some fiduciaries and proxy advisory firms ... may be acting in ways that unwittingly allow plan assets to be used to support or pursue proxy proposals for environmental, social or public policy agendas that have no connection to increasing the value of investments.' ... Overall, CII believes the proposal would create an overly burdensome and unjustified process for considering the voting of proxies that would, in many cases, effectively prohibit ERISA plans from exercising their shareholder rights."

Pensions and ESG: An Institutional and Historical Perspective

"With growing asset size, funded pensions ... and other large institutional investors became 'universal owners' and, along with thought leaders and regulators, drove the evolution of sustainable investing ... [Q]uestions remain, such as who will be most influential in determining the future of sustainable investing -- pensions and other institutional investors, governments, shareholders and companies -- as well as what it will look like.... [S]ustainability remains a work in progress and pensions are in a strong position to shape its evolution." [WP2021-19]

The Rise and (Maybe) Fall of the Golden Parachute

"The practice of sending executives off with golden parachutes is ubiquitous in corporate America -- but shareholders are pushing back, in ways that could substantially deflate them.... [T]he Council of Institutional Investors -- whose members hold over $3 trillion in assets -- approved a policy encouraging shareholders to require that boards consider executive tenure and performance before signing off on those giant stock awards. The idea: To make sure a CEO is still incentivized to do well by the company rather than rush it towards a merger."

Pensions Leaving Workers Behind by Focusing on Messaging, Politics

"[The Council for Institutional Investors (CII)] describes itself as a 'leading voice for effective corporate governance practices for U.S. companies and strong shareowner rights and protections.' But what started off as promoting good governance has transformed into politically motivated environment and social governance, often referred to as ESG. Fiduciary responsibility has taken a back seat.... CII members are staring at an unfunded liability of nearly $4 trillion ... So why do they insist on devoting so much of their time and resources on initiatives that will do nothing to help close that gap?"

ICI Comment Letter to Financial Stability Oversight Council on Proposed Money Market Mutual Fund Reforms (PDF)

"We remain firmly committed to working with regulators on this important issue. We submit, however, that this process should be guided by two principles. First, we should preserve those key features of money market funds that have made them so valuable and attractive to investors. Second, we should preserve choice for investors by ensuring a continued robust and competitive global money market fund industry.... [S]hould regulators continue to believe further actions are necessary, the use of gates and liquidity fees by 'prime' money market funds can provide further stability to money market funds consistent with these two objectives."

Economic Policy Institute Comment Letter to SEC on Possible Fiduciary Rule

"While we recognize that the SEC has an important role in setting the standards that apply to broker-dealers and investment advisers, many of the questions you ask were satisfactorily answered by the [DOL], the Council of Economic Advisors (CEA), consumer advocates, and other experts representing the interests of retirement savers who submitted comments and testified in the process of crafting the DOL fiduciary rule.... We urge the SEC to build on the DOL rule addressing conflicts of interest that harm retirement savers to extend protections to other investors."

Blazing the Oregon Pension Trail

" If pension officials get their wish, the Oregon Investment Council (OIC), the body that oversees a combined $80 billion in pension and other state trust fund assets, will become the Oregon Investment Corp., a quasi-governmental entity with greater control over the state's assets.... [T]he staff of the corporation would report to a fully independent board rather than to just the treasurer. The board would take budgetary authority away from the legislature, be able to scrutinize the cost of the entire program and prioritize human capital and technology resources[.]"

Public Pensions are Increasingly the Focus of SEC Activity

Excerpt: Several recent actions taken by the Securities and Exchange Commission SEC) indicate that there is increasing attention being paid to public pensions ? and not just in their role as institutional investors. While the SEC's proposed restrictions on so-called 'pay to play' activities of investment advisors was not a surprise, an 'informal inquiry' into certain public pension fund activities initiated by the SEC's Division of Enforcement, and the recent announcement of the creation of a new 'Municipal Securities/Public Pension Unit' to look into unfunded and underfunded pension liabilities, among other things, are sounding alarm bells. Even the SEC's acting chief accountant has gotten into the act, expressing concerns with pension plan smoothing activities.