Institutional investors and proxy experts pushed back on Congress as the GOP reawakened the idea that the main proxy advisors have too much power over shareholder proxy voting. It’s déjà vu all over again as lawmakers on the House Financial Services subcommittee held a hearing examining the influence of ISS and Glass Lewis (though apparently the targets were not invited).

The message shared by the International Corporate Governance Network to Congress this week was “Proxy advisors don’t vote, Investors do.” Mm, not sure about that.

Reporting from the hearing, The Deal’s Ron Orol noted that subcommittee members expressed concerns about “robovoting” – where investors automatically vote in line with recommendations issued by a proxy advisor – and accused ISS and Glass Lewis of wielding outsized influence over ESG-related matters.

Testifying before the subcommittee, Nell Minow pointed out that ISS recommended voting with management on 96% of AGM proposals in 2024, hardly a sign of enforcing an ideological agenda. Minow also emphasized that shareholders routinely support proposals even when proxy advisors oppose them, such as Elon Musk’s $56 billion Tesla pay package, which was overwhelmingly approved despite criticism from ISS and Glass Lewis.

At least one major proxy advisor is already adjusting its approach. Semafor’s Liz Hoffman and Rohan Goswami report that Glass Lewis is pivoting away from its traditional “house view” recommendations and will create customized voting policies for individual clients, mirroring recent policy changes adopted by large asset managers. Semafor notes that the shift could have major implications on the activist landscape, potentially giving ISS’s opinion even more sway in contested elections.

On the topic of diffusing and distributing proxy voting, Vanguard this week published the results of a new investor survey showing very strong interest in voting choice programs. Over 80% of respondents said they want asset managers to consider their preferences when casting votes on their behalf, and two-thirds said they would participate in a proxy voting choice program. Watch this space.  

Have a great weekend and see some of you at Milken,

GPP Team

Steel Man: Third Point Owns Stake in U.S. Steel, Sees Opportunities in Credit, Letter Says

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The Wall Street Journal: Should You Buy a Stock Targeted by an Activist Investor? (no)

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FROM OUR DESK TO YOURS

Spring has finally and belatedly sprung in New York with the temperatures finally above 50 degrees, and with Spring comes great new shows on Broadway.

We saw the revival of “Pirates of Penzance”, the Gilbert & Sullivan musical from the late 19th century that still has its wit and charm. The Roundabout Theatre Company version has moved the setting from Penzance in Cornwall on the English Channel to New Orleans, which feels quite appropriate for a bunch of rum-drinking pirates.

David Hyde Pierce is still going strong and plays lyricist Sullivan as well as Major General Stanley — “I am the very model of a modern major-general” quoting the much joked about song. Hyde Pierce rivals only Daveed Diggs playing Lafayette in “Hamilton” in the alacrity of his elocution.

Some history: Pirates was first previewed and staged in New York in 1879 (for copyright reasons). Their HMS Pinafore was a hit in London and bootleg versions cropped up all over the U.S. Gilbert & Sullivan were told that by launching in the U.S., they would have a great chance of being able to control the copyright. “Pirates” was thought to be a jab at the theatrical pirates who had pilfered their show for no dough.

The current theatre it is playing in, now called the Todd Haines Theatre, was built in 1918 and sits right on 42nd Street where many theatres were once housed. Originally named the Selwyn after brothers Arch and Edgar Selwyn, its greatest hit was in 1927 with George S. Kaufman and Edna Ferber’s “The Royal Family.”



During the Depression, the theatre became a movie theatre until it was restored for Roundabout Theatre in the late 1990s.

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• May 4-7: Milken Institute Global Conference, Los Angeles
• May 14-15: NYSE Tech Summit, San Francisco
• June 1-3: NIRI 2025 Annual Conference, Boston

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