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Investing.com-- The Donald Trump administration is exploring new measures to reduce the influence of proxy advisers and index fund managers on shareholder voting, the Wall Street Journal reported on Tuesday.
Trump administration officials are discussing at least one executive order to restrict proxy-advisory firms such as Institutional Shareholder Services and Glass Lewis, the WSJ reported, citing people familiar with the matter.
Measures could include a broad ban on shareholder recommendations or an order blocking recommendations on companies that have engaged proxy advisers for consulting work, the WSJ report said.
White House officials are also considering limits on how index-fund managers are allowed to vote– measures that could crimp the power of asset managing giants such as BlackRock, Vanguard, and State Street.
The WSJ report comes amid growing criticism of proxy advisory firms for their role in swaying shareholder votes. Tesla Inc (NASDAQ:TSLA) CEO Elon Musk had called their influence “corporate terrorists” when several fund managers opposed his $1 trillion pay package at the electric vehicle maker, which was recently approved by shareholders.
JPMorgan Chase & Co (NYSE:JPM) CEO Jamie Dimon had also criticized proxy advisory firms, and had expressed concerns over large institutional investors potentially weakening public company governance.