Blackrock and Vanguard “pause” corporate meetings, SEC’s boardroom power shift in the sarcastic Good Game

Proxy vote support for ESG drops to record low in 2024 5

1. ShareAction's Voting Matters report says ESG proposal support has dropped from 21% to 1.4% since 2021.

1. Trump's SEC leader shifts power from investors to boardrooms 10

1. New policies from the top U.S. securities regulator hand corporate boards more power over investors in ways that could curtail investor-initiated reform efforts on everything from climate policy to director contests.

2. Mark Uyeda, acting chair of the SEC, the agency has made it easier for boards to block shareholder resolutions, put stricter filing requirements on passive funds, and limit investors' communication abilities.

2. BlackRock pauses corporate meetings in wake of new ESG rules 7

3. Vanguard pauses corporate meetings over new ESG guidance 7

4. Meta, X and Snap submit joint letter signaling support for age verification bill to protect teens 5

1. The controlled empires told South Dakota’s Senate Judiciary Committee members that the bill is the "best solution to support families."

5. New York Times Encourages Staff to Create Headlines Using AI 10

1. "Generative AI can assist our journalists in uncovering the truth and helping more people understand the world," the newspaper's new editorial guidelines for AI read.

6. Citi raises CEO [Jane] Fraser's compensation 33% to $34.5 million for 2024 2

1. Shell CEO [Ben van Beurden] pay up 50% as soaring energy prices boosted profit 4

2. Morgan Stanley boosts CEO Ted Pick's compensation to $34 million in first year at helm 1

7. HSBC announces share buyback of up to $2 billion as annual profit jumps 6.5% 10

1. HSBC’s CEO Targets $1.5 Billion in Cost Cuts

2. HSBC to cut jobs as bank shifts to building Asian wealth hubs

3. HSBC Pushes Back Net Zero Goals by 20 Years

8. Airbnb is suing New Orleans over new rules requiring platforms to verify owners have permits for short-term rentals 0

1. In its lawsuit filed against the city in federal court last week, Airbnb said that it had no responsibility for the actions of hosts on its platform, in the same way that social media sites are protected from liability for the posts of its users. The company also denied that it was obliged to verify that its listings are in compliance with city laws.

2. Airbnb added that it was the government’s job to enforce its laws, while describing the City of New Orleans’ regulations as a “highly punitive enforcement regime that violates homeowners’ longstanding and fundamental property rights”.

9. David M. Foulkes elected Chairman of Brunswick Corporation Board of Directors in addition to current CEO Role

10. JPMorgan Chase Begins To Remove DEI Efforts From Website After CEO Jamie Dimon's Bold Pledge To Take On Conservative Agenda

11. UnitedHealth Group resists shareholder proposal on delayed and denied care 5

1. UnitedHealth Group is attempting to swat down a non-binding shareholder proposal that asked the company to prepare reports on the costs of delayed and denied healthcare.

12. Chances of asteroid hitting Earth are 'higher than ever'

1. 3.2% chance; higher than the 1.4% supporting ESG proposals.

Fun times in 13G filings

• Let’s be honest - almost no one knows of or cares about 13G vs. 13D filings

• Let’s call it the “death of shareholder democracy by bureaucracy”

• The short version: the Make Middle School Boys Great Again SEC has declared that if you own >5% of a stock and attempt to influence directors or company direction in any way, you have to pay more lawyers and take more time to file constant reports with the SEC

• Which explains this headline: BlackRock halts meetings with companies after SEC cracks down on ESG

• And this: Trump's SEC leader shifts power from investors to boardrooms

• Here’s the size of the problem:

• Out of 4,529 public US companies… 

• Blackrock: 2,363 13G filings, 3,418 appearances in the top 10 

• Vanguard: 2,182 13G

• Let’s assume:

• 13G filing fees are zero, and each is a rote form

• Let’s pretend Blackrock’s COO has to sign off on every one, and it takes about 2 min to fill and review (these are short forms and automatable) - that would be ~114 hours per year, or 2.3% of his time if he works 65 hour weeks

• So it costs $445,920 of his summary comp including options

• 13D filing fees are $110 each, and each is a longer form

• Let’s pretend it takes 20 min to do each

• That’s 23% of his time, or $4,459,205 plus $259,930 in filing fees

• 10X the cost for paperwork!  From the party of deregulation and bureaucracy killing!

• Let’s assume 13g filers basically stop most governance work for fear of increased filing burdens… 

• Some company winners:

• Philip Morris (33% of the vote recaptured for management!)

• Eli Lilly (32% vote recapture)

• -24% gender power gap - can’t close it now!

• 36% of the board is connected!

• Abbott (25%)

• 46% connected directors, 0.189 controversies batting average!  Forget asking about them!

• Chevron (24%)

• 75% board connection, below average TSR at .462, -11% gender power gap, and no more questions about carbon please!

• Alnylam Pharmaceuticals, who gets back 53.2% of their vote from 13gers

• Atmos Energy and Regency Centers also get >50%

• All three can kind of do anything without fear of engagement?