SB 417
Proxy Advisor Transparency Act
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Sign in to take action- Introduced
- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill, the Proxy Advisor Transparency Act, aims to increase transparency in how proxy advisors operate. It requires these advisors to disclose whether their recommendations against company management are based on a written financial analysis that considers the impact on shareholder value. The bill also mandates that companies receive notice of these recommendations and allows shareholders to request the underlying analysis. Furthermore, it establishes definitions for key terms related to proxy advisors and their services, and outlines enforcement mechanisms to address potential deceptive practices.
Key provisions
- Requires proxy advisors to disclose whether recommendations against company management are based on a written financial analysis.
- Mandates companies receive notice of proxy advisor recommendations.
- Allows shareholders to request the underlying financial analysis used by proxy advisors.
- Defines key terms related to proxy advisors, companies, and shareholder proposals.
- Establishes a process for enforcement of the law by the Attorney General.
- Creates a framework for companies to challenge proxy advisor recommendations.
- Sets an effective date of July 1, 2026.
- States that the changes in law apply only to proxy advisory services provided on or after the effective date.
Who is affected
- Shareholders
- Publicly-traded companies
- Proxy advisors
- Boards of Directors
- Investment Management Firms
Notable changes
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