Senator Evan Bayh
131 Russell Senate Office Building
United States Senate
Washington, DC 20510

Dear Senator Bayh:

Thank you for cosponsoring the Corker amendment to strike the proxy access provision from the Restoring American Financial Stability Act. We are disappointed that the full Senate did not allow a vote on this important matter and we hope the Conference Committee drops this provision from the final report.

As you know, the legislation as passed by the Senate grants the Securities and Exchange Commission authority to issue rules on proxy access, which we believe can only exacerbate the short-term focus that is widely considered to be a contributing factor to the financial crisis. The prospect of frequent election contests will create a perverse incentive for directors to focus on short-term stock price rather than the creation of long-term value. The provision also will allow special interest groups to exert undue influence and pursue a short-term agenda to the detriment of other shareholders. Such behavior is already evident in the practices of some hedge funds, which have encouraged companies they invest in to engage in practices that increase immediate financial returns to shareholders, but that are harmful to longer-term growth, such as taking on increased debt loads and reducing capital investments.

We greatly appreciate your thoughtful leadership on financial regulatory reform and urge you to continue to push for the removal of proxy access in the final conference report.

Sincerely,

John J. Castellani