U.S. Representative Ed Royce (R-Calif.) recently questioned witnesses on the negative impact of rising corporate governance compliance costs on consumers during a Capital Markets and Government Sponsored Enterprises Subcommittee hearing entitled “Corporate Governance: Fostering a System that Promotes Capital Formation and Maximizes Shareholder Value.”
“The U.S. has half as many publicly listed companies trading on its exchanges today as it did in 1996. That’s a pretty precipitous drop, and that trend is particularly alarming for a Californian, like myself, because the startup capital of the world is out in our neck of the woods. Firms that would otherwise go public have been deterred, and arguably if you listen to the firms they say they are deterred by unnecessary hurdles on compliance… which are unbalanced. The consequences of that are unrealized economic growth that otherwise might occur in job creation. Governor Engler, the stockholder proposal resubmission thresholds have not been changed since President Eisenhower’s term here. Clearly, they’re outdated. But rule 14A-8 also allows shareholders who have held $2,000 of a company’s stock for one year to submit a proposal to be included in a company’s proxy statement,” stated Rep. Royce.
“So looking at that in its totality, what are …read more
Source:: U.S. Rep. Ed Royce