Investments

Issues Update

CalPERS hailed the release of federal financial reform legislation recently announced by Senator Christopher Dodd, D-Connecticut and Chairman of the Senate Banking Committee.

The bill includes a pair of CalPERS priorities—provisions that would give shareholders proxy access for director nominations and the ability to cast advisory votes on executive pay packages.

The bill would also:

• give the Fed oversight of the nation’s largest financial institutions;
• create a council led by the Treasury Department to watch over entities and activities that pose a “systemic risk” to the nation’s economy;
• give the federal government the authority to seize a firm that posed a systemic risk;
• impose rules intended to prevent excessive risk-taking by financial firms;
• overhaul the supervision of banks; and
• reform the regulation of derivatives.

The House of Representatives in December passed a financial reform bill that includes the creation of a standalone consumer agency with rule-writing authority and no reviewing council. The legislation also would give shareholders advisory votes on executive compensation packages and clarify the Securities and Exchange Commission’s authority to propose a proxy access rule. CalPERS joined 13 other public pension plans urging that the new bill include proxy access and other corporate governance provisions in reform legislation.

For more on CalPERS support. A summary of the bill can be found here.