Shareholders are demanding more from managements and boards – not just as overseers, but in an effort to increase the value of the enterprise. Amid the backdrop of record-low interest rates, pent-up M&A demand and stacks of cash on corporate balance sheets, these activists are being backed by new capital. In addition, more companies are working with activist investors to identify opportunities to create and unlock substantial shareholder value. A recent panel at the Milken Institute explored the rise of investor engagement and its impact on all stakeholders. Continue Reading →
Turnkey Governance Problematic at Northern Lights
Some trusts are created as turnkey mutual fund operations that launch numerous funds to be managed by different unaffiliated advisers and overseen by a single board of trustees. The federal securities laws require all mutual fund directors to evaluate and approve a fund’s contract with its investment adviser, and the funds must report back to shareholders about the material factors considered by the directors in making these decisions. The SEC Enforcement Division’s Asset Management Unit has been taking a widespread look into the investment advisory contract renewal process and fee arrangements in the fund industry. Continue Reading →
How I Voted: Gilead Sciences, Inc. (GILD) – Proxy Score 50%
Gilead Sciences, Inc. ($GILD) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/8/2013. ProxyDemocracy.org had collected the votes of six funds when I checked on 4/30/2013. I voted with management 50% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003.
Continue Reading →
Bank of America (BAC) Faces Proxy Access on May 8th
John Harrington, of Harrington Investments, will present his proposal on proxy access at the upcoming Bank of America (BAC) meeting on May 8th in Charlotte, North Carolina. It will be the first time language modified to provide a floor for retail nominators of at least 1/2% will be voted on.
That modification was made in an attempt to win over proxy advisors who were concerned the previous version could theoretically allow retail shareowners with as little as $100,000 in equity to nominate directors. Under the revised proposal, the minimum threshold for a nominating group under provision 1(a) at BAC is approximately $1.3B and under provision 1(b) is approximately $666M. Under either option, that is a substantial investment. Continue Reading →
EMC Corp (EMC): How I Voted – Proxy Score 53%
EMC Corp ($EMC) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/1/2013. ProxyDemocracy.org had collected the votes of seven funds when I checked on 4/30/2013. I voted with management 53% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
How I Voted: Kansas City Southern (KSU) – Vote Score 86%
Kansas City Southern ($KSU) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/2/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 4/26/2013. I also checked OTPP, which voted the same as CalSTRS and Calvert. I voted with management 86% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
How I Voted: Fluor Corp (FLR) – Proxy Score 58%
Fluor Corp ($FLR) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/2/2013. ProxyDemocracy.org had collected the votes of two funds when I checked on 4/26/2013. I also checked OTPP, which voted with management except they voted against amending the stock plan. I voted with management 58% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003. Continue Reading →
Wayback Machine: Five, Ten and Fifteen Years Ago in Corporate Governance
Five years ago in Corporate Governance
Whole Foods Market Inc. (WFMI) says federal securities regulators are recommending that no action be taken against the grocery chain over anonymous postings on financial-news Web sites by its chief executive. Mackey’s postings, including many to CorpGov.net publisher James McRitchie, surfaced when they were included among a trove of documents that Whole Foods turned over to the Federal Trade Commission, which was examining whether the purchase of Wild Oats violated antitrust standards. (Whole Foods Not Penalized Over CEO’s Web Postings, WSJ, 4/28/08) Disclosure: The publisher of CorpGov.net is a WFMI shareowner.
WSJ, using data from Broadridge Financial Solutions, reports that 80 companies that have switched to e-proxy. Only 4.6% of individual shareholders voted under e-proxy, a sharp decline from the 19.2% when the companies sent out traditional paper ballots. Continue Reading →
How I Voted: MSCI – Proxy Score 100%
MSCI ($MSCI) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/1/2013. ProxyDemocracy.org had collected the votes of only one fund when I checked on 4/25/2013, so I also took a quick look at OTPP’s vote. I voted with management 100% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
How I Voted: Kimberly Clark (KMB) – Score 64%
Kimberly Clark ($KMB) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/2/2013. ProxyDemocracy.org had collected the votes of five funds when I checked on 4/26/2013. I voted with management 64% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
Video Friday: The Retirement Gamble
Retirement is big business in America, but is the system costing workers and retirees more than what they’re getting in return, asks FRONTLINE correspondent Martin Smith. I thought the program was so good, I wanted to be able to access it from my site for future use.
Watch The Retirement Gamble on PBS. See more from FRONTLINE. Continue Reading →
Institutional Investor Engagement Improves Disclosure of Bribery & Corruption Risks
A three-year engagement by PRI signatories has resulted in improved transparency and disclosure of anti-corruption strategies, policies and management systems by several global companies with significant exposure to corruption risk. Continue Reading →
How I Voted: American Express Company (AXP) – Proxy Score 59%
American Express Company ($AXP) is a stocks in my portfolio. Their annual meeting is coming up on 4/29/2013. ProxyDemocracy.org had collected the votes of six funds when I checked on 4/22/2013. I voted with management 59% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
Review Essay: Citizens DisUnited
Citizens DisUnited: Passive Investors, Drone CEOs, and the Corporate Capture of the American Dream both delights and informs as only Robert A.G. Monks can. No one else writes so well about topics like “How CEOs and the Business Roundtable Hijacked the World’s Greatest Wealth Machine” and those in the current volume because no one else has been as engaged in corporate governance as Monks with such depth from so many angles.
A serial entrepreneur, public official, director, prolific author and long-time agitator, his lifework has been delineating the underlying dynamics of corporate power and devising system that integrate wealth creation with the interests of society. Citizens DisUnited is a clear call to action. I hope my review advances that call by emphasizing the need for every investor, every citizen to get involved. Continue Reading →
How I Voted: Kellogg (K) – Proxy Score 75%
Kellogg ($K) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/26/2013. ProxyDemocracy.org had the wrong date for the meeting and hadn’t posted any votes when I checked on 4/23/2013. I voted with management 75% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
New Independent Investment Firm, Sustainvest Asset Management, LLC Starts in Petaluma
New investment advisory firm, Sustainvest Asset Management LLC focused on sustainable and responsible investing (SRI), has started operations. The firm focuses on investment management for individuals, foundations and non-profit organizations who are searching for an investment advisor who uses the 3 pillars of SRI: Continue Reading →
How I Voted: Johnson & Johnson (JNJ) – Proxy Score – 76%
Johnson & Johnson ($JNJ) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/25/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 4/22/2013. I voted with management 76% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003. Continue Reading →
How I Voted: Citigroup (C) – Proxy Score 41%
Citigroup ($C) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/24/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 4/21/2013. I voted with management 41% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003. Continue Reading →
How I Voted: NCR – Proxy Score 12.5%
NCR ($NCR) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/24/2013. ProxyDemocracy.org had collected the votes of two funds when I checked on 4/21/2013. I voted with management 12.5% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by publiccompanies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003. Continue Reading →
How I Voted: Coca-Cola Company (KO) – Proxy Score 55%
Coca-Cola ($KO) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/24/2013. ProxyDemocracy.org had collected the votes of five funds when I checked on 4/21/2013. I voted with management 55% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
How I Voted: Canadian National Railway (CNI) – Proxy Score 13%
Canadian National Railway ($CNI) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/23/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 4/21/2013. I voted with management 13% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
Video Friday: Director Watch
The Huffington Post has agreed to partner with the Center for Economic and Policy Research (CEPR) to host a new website called Director Watch. Director Watch will bring to light the names of people serving on corporate boards who get large paychecks even as the companies they oversee are going down the tubes. Continue Reading →
Fair Harvard Fund Makes Progress: Alternative Endowment Should Be Permanent & Democratic
The Responsible Investment at Harvard Coalition recently announced it had invested contributions from 450 donors in a socially responsible fund withheld from Harvard University. The Fair Harvard Fund, designed as an alternative endowment fund, will be invested in the Portfolio 21 Global Equity Fund.
According to Harvard undergraduate and investment committee member Michael Danto: Continue Reading →
Help in Achieving CSR & Sustainability Awards and Recognition
Governance & Accountability Institute (G&A), a strategies and consulting firm focusing on Sustainability and 3BL Media, the leading distributor of Corporate Social Responsibility, Sustainability, Health, and Energy news and content, announced G&A Institute’s Awards & Recognition Program yesterday.G&A Institute inaugurated its Awards & Recognitions program to assist client companies in navigating the increasing number of leadership awards and recognitions now available for corporate sustainability and responsibility leaders. Continue Reading →
CorpGov Tidbits
PLANSPONSOR.com reports, a provision in President Obama’s Fiscal Year 2014 budget that pertains to employee stock ownership plans (ESOPs) could result in a disincentive for offering the plans.
The provision would eliminate Internal Revenue Code section 404(k), an incentive for ESOP creation and operation that permits a C corporation to deduct the value of dividends paid on ESOP stock passed through to employees in cash, deductions used to pay the ESOP acquisition loan, or when the employee reinvests in more company stock in his/her ESOP account balance. Continue Reading →
Event Coverage: Why the Corporation is Failing Us and How to Restore Trust
Introduction by Professor Ronald J. Gilson, the Meyers Professor of Law and Business, Stanford Law School; Commentary of Lecture by Professor David F. Larcker, the James Irvin Miller Professor of Accounting, Stanford Graduate School of Business.
The corporation is one of the most important and remarkable institutions in the world. It affects all our lives continuously. It feeds, entertains, houses and, employs us. It generates vast amounts of revenue for those who own it and it invests a substantial proportion of the wealth that we possess. But the corporation is also the cause of immense problems and suffering, a source of poverty and pollution, and its failures are increasing. While governments are subject to repeated questioning and scrutiny, the corporation receives relatively little attention.
Professor Colin Mayer discuss his book, Firm Commitment: Why the corporation is failing us and how to restore trust in it
Video Friday: Lucy Marcus Interviews Steve Waygood
Steve Waygood, of Aviva Investors, which owns 2% of UK equities, explains why fund managers still prefer to walk away, rather than trying to change a company culture. Wagood defines sustainability to include how mega-trends influence the firm. Retail investors doesn’t really understand what is being Continue Reading →
Job Opportunity: Director of Law and Policy in Beautiful Vancouver
The Shareholder Association for Research and Education (SHARE), a leading Canadian responsible investment education and advisory service for institutional investors, is accepting letters of interest for a full time, permanent position. Continue Reading →
Guns and Divestment
The California Constitution provides that the Legislature may, by statute, prohibit retirement board investments if in the public interest and providing the prohibition satisfies specified fiduciary standards. Current law prohibits the boards of CalPERS and CalSTRS from investing public employee retirement funds in a company with active business operations in Sudan and Iran, as specified.
AB 761 (Dickinson) would prohibit the funds from investing in companies which manufacture nonmilitary firearms or ammunition, as specified, and would require the funds to sell such existing investments. Continue Reading →
ITC Holdings (ITC): How I Voted at Special Meeting – Proxy Score 80
ITC Holdings (ITC) is one of the stocks in my portfolio. Their annual meeting is coming up on 4/16/2013. ProxyDemocracy.org had collected the votes of only one fund when I checked and voted on 4/9/2012. I voted with management 80% of the time. View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →
Harvard’s Shareholder Rights Project
Lucian Bebchuk
This guest post by Lucian Bebchuk originally appeared on the Harvard Law School Forum on Corporate Governance and Financial Regulation on April 9, 2013 as Wachtell Lipton Was Wrong About the Shareholder Rights Project and is reproduced here with Professor Bebchuk’s permission. Martin Lipton quickly rebutted in a post entitled A Reply to Professor Bebchuk.
The Shareholder Rights Project (SRP) is a clinical program operating at Harvard Law School and directed by Professor Lucian Bebchuk. The SRP works on behalf of public pension funds and charitable organizations seeking to improve corporate governance at publicly traded companies, as well as on research and policy projects related to corporate governance. Continue Reading →
Opportunity for Comment: Sustainability Listing Standards Proposed for Global Stock Exchanges
Yesterday, a group of investors announced a Consultation Paper with recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges.
The draft recommendations were developed by nearly a dozen investors who are part of the Ceres-led Investor Network on Climate Risk (INCR). BlackRock, British Columbia Investment Management Corporation, and the AFL-CIO Office of Investment are among those who participated on the INCR Listing Standards Drafting Committee. Continue Reading →
CalPERS: Passive Investing – Active Monitoring
Investment News reports that California CalPERS, the second biggest U.S. public pension fund, is weighing the idea of taking its massive $255 billion assets under management and moving to an all-passive portfolio. Should we care?
Well, it would matter a lot for active managers who receive management fees from CalPERS, Josh Brown, who runs the popular financial blog the Reformed Broker, points out on Twitter.
Of course, the income of active managers could suffer if CalPERS moved the vast majority of its money management in-house. However, depending on how it is done, it could also hurt the larger society. Continue Reading →
Video Friday – Corporate Speech: The Role of Corporations in Lobbying and Influencing Policy
Moderator: Jesse Eisinger, reporter at ProPublica, covering Wall Street and finance. Panelists: Martin Redish, NU Law; Robert A. Weinberger, Senior Fellow, Aspen Institute Initiative on Financial Security; former VP Government Relations, H&R Block; Chairman, Center for Responsive Politics; Lynn Stout, Cornell Law; Nell Minow, founder of GMI Ratings and co-founder and editor of the Corporate Library, a research firm for oversight on corporations and executive compensation. Continue Reading →
Proxy Access Proposals Move Forward
On March 26, 2012, SEC staff issued their decision on a request by iRobot (IRBT) to exclude my proxy access proposal from their proxy. Although similar proposals had survived no-action requests last year, IRB management held out hopes that small changes made in the proposal might have made the proposal “vague” under rule 14a-8(1)(3) or “ordinary business” under rule 14a-8(1)(7). SEC staff could not concur and therefore advised IRBT not to omit my proposal based on those rules. Continue Reading →
"Corporations determine far more than any other institution the air we breathe, the quality of the water we drink, even where we live. Yet they are not accountable to anyone." (Power & Accountability
) Participate to ensure accountability! Research fund votes: Proxy Democracy and FundVotes. Find voting guidelines and meeting dates: FundVotes. Rate coverage: VoterMedia.org. Follow Corporate Governance on Twitter. Visit our corporate governance bookstore. Collaborate with shareowners & ask companies questions at Sharegate.com.
) Participate to ensure accountability! Research fund votes: Proxy Democracy and FundVotes. Find voting guidelines and meeting dates: FundVotes. Rate coverage: VoterMedia.org. Follow Corporate Governance on Twitter. Visit our corporate governance bookstore. Collaborate with shareowners & ask companies questions at Sharegate.com.
