Glass Lewis has been a thorn in the side of conservative efforts to influence corporate America through shareholder proposals. The firm issues voting recommendations to asset managers and retail investors for proxy voting items, including proposals, and sides with NLPC’s proposals so rarely that when they do its a major news item for our organization.
But this source of opposition is changing. According to Reuters:
Major proxy adviser Glass Lewis will no longer offer its “benchmark” voting recommendations starting in 2027 and instead will offer a set of new options for clients, according to a company spokesperson on Tuesday.
In a position paper sent by Glass Lewis, the company cites a growing split between how U.S. and European investors approach issues like fiduciary duty and sustainability.
The spokesperson also said the change was indirectly a result of criticism the firm has faced from U.S. Republican politicians. “The whole geopolitical environment is attached to this,” the spokesperson said.
Glass Lewis and its rival Institutional Shareholder Services, or ISS, have been under pressure from politicians aligned with corporate managers, as topics like executive pay and climate politics drew more attention at corporate annual meetings.
In Texas, for instance, the two firms face an investigation by the state’s Republican Attorney General over whether they violated consumer-protection laws including rules on disclosing material facts. The companies have denied wrongdoing, and separately won preliminary injunctions blocking a new state law that would have required them to tell clients their advice on environmental, social and governance matters does not solely serve shareholders’ financial interests.
This is great news for NLPC. According to the Wall Street Journal:
Glass Lewis said disagreements between U.S. and European investors on sustainability matters are “challenging the traditional model of proxy voting organizations that rely on a single house view.” What it means is that U.S. investors were tired of Glass Lewis’s bullying leftward tilt in its proxy recommendations. Going forward, the firm said it plans to let its customers decide.
Even conservative shareholders have expressed to us in the past that they use Glass Lewis’s voting recommendations to save time and effort, even if those voting recommendations contradict conservative principles.
NLPC’s proposals will no longer face automatic opposition from Glass Lewis’s clients, which means we will have more opportunity to elicit higher vote support and sustain extended corporate campaigns against liberal activists’ priorities. Leftist shareholders will continue to oppose our proposals, but at least fiduciary-minded shareholders will have the opportunity to let their vote reflect their worldviews and support corporate policies they feel will enhance financial returns.
