Shareholder consent bill advances

By CMTA Staff

Capitol Update, April 28, 2006 Share this on FacebookTweet thisEmail this to a friend

Efforts to ban corporate political activity without shareholder consent gained momentum as SB 1354 (Joseph Dunn, D-Santa Ana) was approved by the Senate Elections, Reapportionment and Constitutional Amendments Committee on April 24th. The bill targets corporate political activity by entitling any objecting shareholder to a payment from the corporation, after the fact, of the part of the contribution equal to their proportional share of the value of their equity in the corporation.

CMTA believes that this bill is both unnecessary and an inappropriate expansion of shareholder rights. The current FPPC mandated Major Donor reports and the user-friendly political activity database provided by the Secretary of State's website provide for sufficient transparency with regard to political contributions. Based on this information, shareholders have the right and ability to dispose of shares if they disagree with a corporation's contribution strategies. Also, allowing certain shareholders to profit by receiving refunds as well as the gains attributable to stock ownership would unfairly harm other shareholders in the corporation.

SB 1354 previously failed passage in this committee, but with Senator Kevin Murray's (D-Los Angeles) decisive aye vote on April 24th, the bill now goes before the Senate Appropriations Committee, which Murray chairs.
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