U.S. Governance Rules and Taxes
The Exchange’s most recent collection of input took place in June, shortly after U.S. Sens. Charles E. Schumer (D-N.Y.) and Maria Cantwell (D-Wash.) introduced a “Share-holder Bill of Rights” designed to give shareholders a “say on pay” and a voice in the corporate boardroom. NYSE Euronext collected views on the bill from 383 CEOs, CFOs and general counsels and presented them to Schumer and other policymakers. According to the poll, most executives (81 percent) oppose the bill.
The survey also included several questions about the Obama administration’s proposal to reform the tax “deferral” rule, which lets U.S.-based multinational companies deduct expenses for overseas operations but defer paying income tax on the profits from those operations. Nearly half of those surveyed oppose the proposal and believe it would impair their competitive position.
Short-Selling Concerns
Another recent survey examined short selling, a practice — generally defined as selling borrowed securities in an attempt to buy replacements at a lower price — for which the SEC had been considering alternative rules. NYSE Euronext actively participated in the rule-making process, delivering collective views on this topic, as well as its own, while educating constituents with Webcasts and other timely communications. “We’re trying to find the balance between preventing harmful activities and ensuring the market has enough liquidity to allow a stock to trade properly,” Niederauer explains.
“We are committed to being a public advocate for the companies listed on our exchanges.” —Duncan Niederauer
NYSE Euronext CEO
More than 95 percent of those surveyed in May believe that the market would function better with one of the proposed short-selling restrictions. These findings are in line with this year’s NYSE Euronext CEO Report, which reveals that most CEOs think short selling is harmful to their stock and their shareholders. For more information on shortselling, visit http://www.sec.gov/news/press/2009/2009-179.htm.
Listening to Customers
A series of recent meetings with executives of listed companies in various parts of the country encouraged Niederauer to initiate the polls and formalize the Exchange’s advocacy efforts. “Our listed companies have been expressing strong interest in these issues, and we quickly took initiative to convey the views to policymakers as they consider legislative reform initiatives,” Niederauer says.
Among the executives with whom Niederauer met was Patti Hart, CEO and president of International Game Technology (IGT). “Now more than ever, with the common issues we face as top-listed companies, it is imperative that our collective voice be heard and that the Exchange help fill that role,” she says. “The issues are global, and the more united we can stand and be heard as a larger voice, the better our chance of shaping favorable legislation and positive opinions that will help us thrive as businesses.”
John Chen, chairman, CEO and president of Sybase Inc. (SY), agrees. “It is important for the listed companies to come together to address issues impacting the business community,” he says. “We need to have open, meaningful and in-depth discussions with policymakers and the general public on topics that affect the competitiveness of American corporations as a whole. The Exchange plays an instrumental role in providing the opportunities for its listed companies to identify their voice and communicate it through the right channel.”
“Personally,” adds Hart, “I find the exchange of opinions via the CEO surveys both positive and helpful. We can all benefit from an open exchange of ideas, and NYSE’s role in accommodating this is good for all involved.”
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