DTC claims factual inaccuracies, Society distances itself from Shareholder Communications Coalition, Plagiarism in Comment Letters, plus more

In my last post I wrote that that a few more comments had dribbled in past the October 20 deadline.  Well, it's now up to 30 more letters (although a few of these are of the "form" variety). Some of the new batch are quite thoughtful and provide concrete examples. In this regard, the October 22 letter by UnitedHealth Group is worth a read.

Some letters wanted to set the record straight.  The October 25 letter of the Depository Trust & Clearing Corporation, whose subsidiary is the The Depository Trust Company (DTC), writes that it "takes issue with any characterization in the [SEC Concept] Release that casts doubt on the legitimacy of the [DTC Omnibus Proxy] Procedure.  The Release cites, on page 18, footnote 42, the decision of a Delaware Chancery Court subsequently overturned. The court makes a statement about a lack of standard policies or procedures governing DTC's production of omnibus proxies, which is not well-founded and is factually inaccurate. . . .  DTC has a longstanding and public Procedure pursuant to which it issues the omnibus proxy as soon as possible following record date. This Procedure is effective, as are all of DTC's rules and procedures, as a contract between DTC and its participants."

Note to DTC (if you are reading this): in footnote 3 of the letter you reference an internet address where the Omnibus Proxy Procedures are available; but it doesn't work. Please let me know the correct URL.

Another letter to set the record straight comes from the Society of Corporate Secretaries and Governance Professionals. I have been eagerly awaiting the Society's letter, and when I saw its name with a submission on October 27, I opened it right away. What I found however was the following brief statement:

"The Society submits this letter in response to the letter filed by the Shareholder Communication Coalition on October 20, 2010. We would like to clarify that we do not support the positions taken in the Coalition letter except for Section III relating to Proxy Advisory Firms. We note that the letter has no indication of the names of the members of the Coalition, but the website includes the Society as a member. For this reason, it is possible that one could infer that all members of the Coalition agree with all the points made in the letter. However, as stated above, the Society does not."

Some useful comments on U.S. proxy voting system come from a couple of UK listed companies that also have ADRs traded in the U.S.  Both BP p.l.c. and British American Tobacco p.l.c. submitted letters on October 22, identifying in places, contrasts with the U.K. system. Fortunately you don't need to read both letters to get the point, since they are nearly word-for-word identical - so just pick one: BP or BAT.

The Center On Executive Compensation (COEC) focuses its October 25 letter on the role of proxy advisors (like ISS).  The COEC calls for the registration with the SEC of proxy advisors under the Investment Advisers Act, subject to certain minimum criteria for the number of clients they serve. In addition, the COEC states that registration is not enough and that the SEC should take several additional steps including banning the practice of firms providing proxy advisory services to investors while simultaneously selling consulting services to corporate issuers on the same, or substantially similar, subject matters.