Response to TX SB 2337
As part of a campaign to attract companies to relocate to, incorporate in, and list on a new Texas-based exchange, the Texas legislature is rushing through a number of corporate governance measures. A bill set to become law would permit Texas-based and listed public companies to amend their governing documents to impose much greater ownership […]
Nichol Garzon is the Chief Legal Officer and SVP Corporate Development at Glass Lewis. This post is based on a Glass Lewis letter.
As part of a campaign to attract companies to relocate to, incorporate in, and list on a new Texas-based exchange, the Texas legislature is rushing through a number of corporate governance measures. A bill set to become law would permit Texas-based and listed public companies to amend their governing documents to impose much greater ownership thresholds on shareholders seeking to submit proposals. Other bills, including one already signed into law, would insulate Texas companies and their boards from private litigation.
Among these is a new measure that purports to regulate proxy advisors, but that could have far-reaching implications for our institutional investor clients, as well as other parts of the stewardship eco-system. Glass Lewis is concerned that this bill is being rushed through the legislative process with no consultation with proxy advisors or their clients. It is wholly unworkable, conflicts with federal securities laws, and would serve no useful purpose, while creating unnecessary costs for proxy advisors and investors.
Below is the text of a letter Glass Lewis sent to Members of the Texas House Committee currently considering the bill.
