United States Senator Bill Hagerty has called on the Department of Justice and the Federal Trade Commission to investigate Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co. for potential antitrust violations. As a member of the Senate Banking Committee, Hagerty sent a letter to Attorney General Pamela Bondi and FTC Chairman Andrew Ferguson highlighting concerns over the influence these firms wield in the proxy advisory market.
Hagerty’s letter states that ISS and Glass Lewis “control more than 90% of the U.S. market for proxy advisory services” and use their position to “suppress competition, hijack corporate governance, impose ideological agendas,” among other allegations. He further argues that their actions have significant impacts on American investors and consumers.
This move follows Hagerty’s previous efforts to address issues within the proxy advisory sector, including demanding documents from ISS regarding their support for proposals not linked to long-term shareholder value. He also sponsored legislation aimed at expanding SEC authority over such firms.
The senator’s concerns extend to how these firms’ market power influences public companies’ governance standards and policies. According to Hagerty, ISS and Glass Lewis dictate practices through vote recommendations that can override independent board decisions, pushing companies towards social changes outside democratic processes.
The letter highlights conflicts of interest arising from consulting services offered by these firms. It notes that ISS provides both proxy advisory services and consulting on executive compensation plans—potentially leading to a “coercive pay-to-play setup.” While Glass Lewis claims not to offer consulting services, it does provide equity plan advisory services similar to ISS.
Additionally, Hagerty accuses both firms of coordinating voting guidelines with organizations like Climate Action 100+, which could steer institutional investors toward outcomes based on partisan ideology rather than shareholder value.
Hagerty concludes by urging federal authorities to investigate these practices thoroughly to ensure competition in the proxy advisory market is preserved.
