House to Discuss PE’s Role in U.S. Health Care | Middle-Market Public Policy Roundup

Following a sudden announcement last week, the House is set to host a subcommittee meeting on Thursday examining the role of private equity in U.S. health care. In the Senate, former presidential candidate and current Budget Committee Chair Bernie Sanders introduced legislation that would hike taxes on CEO pay. At the Securities and Exchange Commission, the agency’s acting-chief advocated for more reporting requirements on large investors. The agency also unveiled a new webpage to collect information on ESG investing. Lastly, the House Financial Services Committee is requesting diversity data from the nation’s largest investors.

House Subcommittee Announces Hearing on Private Equity’s Role in U.S. Health Care

• Following a sudden announcement last week, lawmakers will discuss private equity’s role in health care at a hearing scheduled for Thursday.
• The House Ways and Means Oversight Subcommittee will hold the hearing entitled, “Examining Private Equity’s Expanded Role in the U.S. Health Care System” on March 25 at 1 p.m. Eastern Time.
• Little information has been released about the hearing, including the names of witnesses or discussion topics. The hearing was announced by the subcommittee’s Chair Rep. Bill Pascrell, D-N.J., on March 18.
• While rarely dealing with matters related to the finance industry directly, the Ways and Means Committee is the chief tax-writing body of the House and presides over most revenue-raising measures, and has jurisdiction over some federal programs like Medicare.

Sanders Backs Proposed Tax on CEO Pay

• Former presidential hopeful and newly-installed chair of the Budget Committee, Sen. Bernie Sanders, D-Vt., introduced legislation that would apply an additional tax on companies that compensate CEOs significantly higher than average workers, a move he and other say would address income inequality.
• Sanders was joined by other lawmakers, including Sen. Elizabeth Warren, D-Mass., in support of the proposed “Tax Excessive CEO Pay Act,” which would raise taxes on companies that pay their top executives at least 50 times more than the pay of a median worker.
• “We need to take dramatic steps to address wealth inequality in this country and discouraging massive executive payouts is a good place to start,” Sanders said in a statement.
• Despite his short tenure leading the committee, Sanders was instrumental in shaping the recently-passed $1.9 trillion stimulus package.

SEC Wants More Voting Information from Large Fund Managers

• The acting chair of the Securities and Exchange Commission wants the regulator to demand more transparency about how fund managers cast shareholder votes.
• In a speech delivered at the 2021 ICI Mutual Funds and Investment Management Conference on Wednesday, Acting Chair Allison Herren Lee said that disclosure laws have struggled to make ordinary investors grasp how administrators exercise certain important votes.
• With the rise of index funds, shareholder voting power is now heavily concentrated in the hands of a few firms. BlackRock, Vanguard Group and other large managers can decide the fates of companies by voting on corporate boards or issues such as business acquisitions. Many say they pay attention to environmental, social and governance matters when voting. Still, these firms are required to disclose little to the SEC about how they vote all of the shares they oversee for investors. [Dawn Lim, The Wall Street Journal]
• “Corporate accountability is only possible when the funds that manage American investors’ savings diligently exercise their authority to vote, clearly disclose their votes to investors, and operate in a system that efficiently provides accurate information about vote execution,” Lee said in prepared remarks.
• After President Biden’s nominee for the SEC’s top job, Gary Gensler, is confirmed by the Senate, Lee will relinquish control of the agency. Before sweeping amendments to disclosure laws will be approved, they must first be submitted and then made available for public consultation, according to The Journal.

SEC Launches New Page to Collect Agency Actions and Information on ESG Investing

• The SEC launched a new webpage this week to bring together agency actions and the latest information about climate and environmental, social and governance, or ESG, investing.
• In response to increased investor demand for this information, the “SEC Response to Climate and ESG Risks and Opportunities” page will appear on the front page of SEC.gov and will be updated as the agency continues to respond to investors.
• “Our all-of-SEC approach looks at how climate and ESG intersect with our broader regulatory framework to get investors the information they need to plan for their financial future,” Lee said in a statement.

HFSC Requests Investors’ Diversity Data

• Lawmakers are asking the nation’s largest investment firms to disclose data on diversity and inclusion efforts.
• Chair of the House Committee on Financial Services Rep. Maxine Waters, D-Calif., and Rep. Joyce Beatty, D-Ohio, chair of the Subcommittee on Diversity and Inclusion, sent requests to the nation’s 31 largest investment firms for data on their diversity and inclusion.
• The requests are part of a longstanding effort to hold the financial services sector accountable and provide the American public with a complete picture of how financial firms are meeting their commitments to diversity and inclusion, the lawmakers said in a statement.
• The lawmakers requested information about each institution’s diversity and inclusion data and policies from 2016 through the present, including workforce and board diversity, work with diverse suppliers, and challenges implementing diversity and inclusion policies and practices.
• The list of firms that received requests included private equity firms, including alternative investment giant Blackstone Group.