President Donald J. Trump Protects American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors – The White House

PROTECTING AMERICAN INVESTORS AND RETIREMENT SAVINGS: Today, President Donald J. Trump signed an Executive Order to end the outsized influence of proxy advisors that prioritize radical political agendas over investor returns.

• The Order directs the Chairman of the Securities and Exchange Commission (SEC) to review and, as appropriate, rescind or revise all rules and regulations related to proxy-advisors that implicate “diversity, equity, and inclusion” (DEI) and “environmental, social, and governance” (ESG) priorities, as well as rules related to shareholder proxy proposals that are inconsistent with the policies in the Order.
  • It requires the SEC to enforce anti-fraud provisions in securities laws against proxy advisors with respect to their voting recommendations, consider requiring proxy advisors to register as investment advisers, consider requiring proxy advisors to provide increased transparency on conflicts of interest, examine whether proxy advisors serve as a vehicle for investment advisers to coordinate their voting decisions, and assess whether registered investment advisers breach their fiduciary duties by hiring proxy advisors to advise on, non-pecuniary factors in investing, including on factors such as DEI and ESG, and subsequently follow their recommendations.
• The Order directs the Chairman of the Federal Trade Commission (FTC), in consultation with the Attorney General, to determine whether proxy advisors are engaged in unfair methods of competition or unfair or deceptive acts or practices and to review ongoing state antitrust investigations into proxy advisors for violations of Federal antitrust law.
• The Order directs the Secretary of Labor to strengthen ERISA fiduciary rules and increase fiduciaries’ transparency regarding their use of proxy advisors, ensuring proxy advisors and plan managers act solely in the financial interest of American workers and retirees.

RESTORING CONFIDENCE IN THE PROXY ADVISOR INDUSTRY: President Trump is stopping foreign-owned proxy giants from using Americans’ 401(k)s, IRAs, and pensions to force leftist policies on U.S. companies.

• Two foreign-owned proxy advisors—Institutional Shareholder Services and Glass Lewis—dominate more than 90% of the proxy advisor market and routinely recommend votes for racial equity audits, aggressive GHG emission cuts, and other actions that are similarly designed to advance radical politically-motivated agendas like DEI and ESG.
• These firms’ clients often adopt the proxy advisor firms’ recommendations without independent analysis, giving proxy advisors enormous power over shareholder proposals, board composition, executive compensation, and other corporate governance matters at America’s largest companies.
• Their politically-motivated advice has prioritized ideological goals over maximizing returns for millions of hard working- and middle-class American investors.
• Conflicts of interest, lack of transparency, and one-size-fits-all voting policies have eroded trust and hurt the value of retirement savings for everyday Americans. 

BUILDING WEALTH FOR ALL AMERICANS: President Trump is enhancing financial opportunities and retirement security for all Americans, ensuring they can build wealth and thrive.

• On the campaign trail, President Trump vowed to “sign an Executive Order … to keep politics away from America’s retirement accounts forever. I will demand that funds invest your money to help you, not them, but to help you. Not to help the radical left communists, because that’s exactly what they are.”
• Through tax cuts and deregulation, President Trump is delivering on his promise to Make America Wealthy Again, empowering workers to save and invest more for their retirement.
• Under President Trump’s Working Families Tax Cuts Act, the vast majority of senior citizens will pay no tax on their Social Security benefits.
• President Trump signed an Executive Order to allow 401(k) investors to access alternative assets for better returns and diversification.