JP Morgan severs ties with all proxy advisors: WSJ
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The news: JP Morgan’s asset-management unit is cutting all ties with proxy advisory firms with immediate effect, according to an internal memo seen by the Wall Street Journal.
The context: The WSJ wrote that for the upcoming proxy season, JP Morgan will use an internal artificial-intelligence-powered platform it is calling Proxy IQ to assist on US company votes.
The bank will use the platform to manage votes and the AI also will analyse data from more than 3,000 annual company meetings and provide recommendations to the portfolio managers, the memo reportedly explained, replacing the typical roles of proxy advisers.
The memo said that JP Morgan thinks it is the first large investment firm to entirely stop using external proxy advisers, such as Glass Lewis and Institutional Shareholder Services, which offer research, advice and voting infrastructure to investment firms.
The move comes after US President Donald Trump signed an executive order in December aimed at boosting oversight of the proxy advisory sector, which argued that top firms often "advance and prioritize radical politically-motivated agendas."
The source: Wall Street Journal
