SEC proposes to end shareholder vote oversight, a blow to reformers

Sept 16 (Reuters) - The U.S. Securities and Exchange Commission on Wednesday proposed to end its oversight of corporate shareholder votes on ‌topics like climate change or executive pay, a move critics see as ‌a blow to corporate reforms.

The move, expected since last month, is part of a broader shift ​of power away from investors to corporate managers by the SEC, which now has three Republican members and two vacant seats previously held by Democrats.

Wall Street's top regulator also proposed changes including ending a rule that companies produce glossy annual reports it ‌said duplicate information in their ⁠annual Form 10-Ks.

SEC Chairman Paul Atkins said in a statement the SEC lacks the statutory authority to oversee shareholder voting and ⁠that the area is best run by states. Several, including Texas, have offered companies favorable treatment when they incorporate locally.

"As we experience an exciting period of increased competition among ​states ​for corporate domicile, there is no better ​time for the Commission to recognize ‌the limits of its authority, relative to state law, for regulating shareholder proposals," Atkins said in a statement.

Investor resolutions focused on topics like carbon emissions, workforce diversity or executive roles have been a focal point of many corporate annual meetings, though the number has fallen in recent years.

Activists worry the SEC's move to dismantle ‌longstanding processes will diminish their influence on ​areas such as environmental matters or CEO pay. ​The proposed changes are now subject ​to a public comment period and further SEC action.

"For more ‌than 80 years, the shareholder proposal process ​has been a ​cornerstone of American corporate governance that has strengthened board oversight, improved risk management, and fostered productive dialogue between investors and companies," said New York State ​Comptroller Thomas DiNapoli, who ‌oversees state retirement funds, in a statement.

With its proposal "the SEC has chosen ​to allow corporate management to shield themselves from accountability," DiNapoli said.

(Reporting ​by Ross Kerber; Editing by Chris Reese)