FTC Takes Aim at Corporate America’s Power Brokers

According to Financial Times News, the Federal Trade Commission has launched an antitrust investigation into proxy advisory firms Institutional Shareholder Services and Glass Lewis. The probe examines whether their market dominance unfairly restricts competition and harms consumers through their influence over shareholder votes. This comes as President Donald Trump was considering an executive order to curb the power of both proxy advisers and major asset managers like BlackRock and Vanguard. Several influential CEOs had urged Trump to address what they view as excessive power held by proxy advisers over corporate decisions. The investigation remains non-public, with Glass Lewis stating it’s complying with document requests while noting the probe doesn’t suggest any law violations. ISS declined to comment on the FTC’s actions.

Proxy Power Play

Here’s the thing about ISS and Glass Lewis – they basically shape corporate America’s direction without most people even knowing they exist. These two firms advise institutional investors on how to vote on everything from executive pay to who sits on company boards. And when you control the recommendations that guide trillions in investment dollars, you wield incredible power. But is that power crossing into antitrust territory? That’s what the FTC wants to figure out.

Political Backdrop

This isn’t just dry regulatory stuff – there’s a serious culture war brewing in corporate boardrooms. Trump’s team is looking at this through what sources call a “populist lens” that blends antitrust concerns with cultural politics. Many in Trump’s orbit see BlackRock’s Larry Fink as public enemy number one for pushing ESG priorities. They view his famous CEO letters as progressive agenda-pushing through financial muscle. So this investigation isn’t just about market competition – it’s about reversing what they see as ideological capture of American businesses.

Bigger Picture

Look, previous administrations have tinkered with corporate governance reforms, but this feels different. We’re talking about a direct challenge to the entire ecosystem that’s developed around shareholder activism. The complaint from Trump’s Wall Street allies is that between the proxy advisers and giant index funds, you’ve got incredible market concentration that stifles competition. But here’s the question – is this really about protecting competition, or is it about changing the political direction of corporate America? The lines seem pretty blurry.

What’s Next

This investigation could fundamentally reshape how shareholder democracy works. If the FTC finds antitrust violations, we might see forced changes to how proxy advice gets delivered and priced. But proving harm to competition won’t be easy – these firms dominate because institutional investors want their services. Meanwhile, the executive order threat hanging over asset managers adds another layer of pressure. Basically, we’re watching a power struggle over who really controls corporate America – and the outcome could affect everything from your retirement account to which social issues companies champion.