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 →
Proxy Access Proposals Move Forward
Contest: Foxhole of the Year Award
Corporate Governance was founded in 1995 and we have never run a contest… until now. Announcing the Foxhole of the Year Award for the company that makes it the most difficult for shareowners turn up at their annual meeting.
Our first nomination came from John Chevedden for FirstEnergy (NYSE:FE). According to the $17 billion company:
You are invited to attend the 2013 FirstEnergy Corp. Annual Meeting of Shareholders at 8:00 a.m., Eastern time, on Tuesday, May 21, 2013, at the Waterfront Place Hotel, Two Waterfront Place, Morgantown, WV 26501. Continue Reading →
Foxhole of the Year Nominee
Shareowner activist John Chevedden suggested the first nomination for a company avoiding its owners this proxy season. Continue Reading →
Proxy Advisors Get Tougher
I blogged about this in December (Key Changes to Proxy Advisor Policies for 2013), mainly referring to a recent Alert from Weil. Writing for Alliance Advisors, Shirley Westcott, has added to the mix. I’m not sure when it was actually written because the publication says January 2013 at the top but September 2012 at the bottom. Nevertheless, another good analysis to help us understand the changes. Here’s the lead-in from the email Continue Reading →
The AGM Votes are in and the Winner is ….
Steve Viederman
Guest Post from Stephen Viederman, Fellow, Governance & Accountability Institute, reposted here with the permission of Viederman and Accountability-Central.com. James McRitchie, Publisher of Corporate Governance reformatted the original to bring the footnotes up, hide urls and generated those wonderful ads.
The Spring madness of annual corporate meetings (referred to as AGMs) is upon us. Continue Reading →
Video Friday: David Langstaff on Tomorrow’s Corporation
Tomorrow’s Corporation that We Need Today: Getting there from here. David Langstaff, president and CEO of TASC Inc., discusses why understanding the purpose of the corporation is so important and suggests next steps. March 7, 2013. Continue Reading →
Agency Capitalism: Corrective Measures (Part 3)
This is Part 3 of a post which started out reviewing the important thesis outlined in The Agency Costs of Agency Capitalism: Activist Investors and the Revaluation of Governance Rights by Ronald J. Gilson and Jeffrey N. Gordon (January 1, 2013) in Agency Capitalism: Corrective Measures (Part 1). In this post and in Agency Capitalism: Corrective Measures (Part 2) I hope to extend the work of Gilson and Gordon by offering additional avenues to counterbalance the central problem of devalued governance rights. Continue Reading →
Deemphasizing Peer Groups: What’s Next?
There is nothing more controversial than setting the pay of America’s CEOs. 11:45 a.m., March 22, 2013–The John L. Weinberg Center for Corporate Governance at the University of Delaware will host a panel titled “Deemphasizing Peer Groups: What’s Next?” from 9:30 a.m.-11:30 a.m., Thursday, April 11, in Clayton Hall on UD’s Laird Campus.
The program will review the utility of using peer group benchmarking in setting executive compensation with a specific focus on what other factors should be considered by a compensation committee if peer group benchmarking is deemphasized. Continue Reading →
Review: Whistleblower Laws
In The Successes and Failures of Whistleblower Laws, Robert G. Vaughn puts his life-long interest in perspective. A background with Nader’s Raiders studying federal agencies, work as an attorney representing whistleblowers, academic research and insights gained through study abroad facilitate Vaughn’s ability to evaluate the laws through theory and practice, stories and themes.
From Stanley Milgram to the Stanford prison experiments, My Lai Massacre and civil rights cases, Vaughn explores those who actually took up the adage, ‘question authority’ and the laws that evolved to protect them. He delves into famous cases, such as that of Frank Serpico and Daniel Ellsberg, as well as those far more obscure but also important. We also see how protections largely started in the civil service Continue Reading →
SVDX/Stanford Rock: Two Classes of Common Stock: Qui Bono?
In light of the IPOs and subsequent performances of Facebook, Groupon, Zynga, etc., there has been renewed discussion in Silicon Valley. When two classes of common stock that place control of the board in the hands of the founders and not the investors, do investors benefit or does it just entrench management? One argument in favor of two classes of common stock is that it allows the founders to run the company without interference from activist shareholders who are “short-termers.” One argument against is that a founder who is a poor CEO cannot be removed by the board — and hiring and firing the CEO is the raison d’etre of a corporate board. SVDX‘s panel of seasoned experts hold divergent views on this topic. This program, like all SVDX programs, was subject to the Chatham House Rule. I’ve added a few links that might be helpful. Continue Reading →
Nell Minow: The Unfinished Business of Corporate Governance
Nell Minow
Writing in the March/April edition of The Corporate Board, Nell Minow titles her latest bit of advice, The Unfinished Business of Corporate Governance. Here’s the lead in:
After a decade of frantic corporate governance reform, business leaders may believe that governance has reached the pinnacle of responsibility and effectiveness. Not so fast, says Nell Minow, one of America’s most respected governance observers. Corporate data disclosure can still be manipulated, boards can still be opaque or unaccountable to investors, and work is still needed on corporate pay setting and transparency. Continue Reading →
Video Friday: The Purpose of the Corporation
The Aspen Institute fosters leadership “based on enduring values” and examines critical issues, such as the purpose of the corporation. Their business and society page is well worth reading and viewing. Here’s the opening narrative: Continue Reading →
Proxy sites dump one-click vote button on SEC concerns
That was the blaring headline in Ross Kerber’s article for Reuters yesterday. Unfortunately, they didn’t dump one-click voting; they renamed it.
The real change was almost entirely for appearances. We no longer have a “Vote with the Board’s Recommendations” button. Instead, we have a “Submit” button. What happens when you hit that button and don’t fill out anything else? All your votes go to the board recommended boxes. There is no change in what actually happens. If there are 20 items, it still takes one click to vote with the board, 21 to vote against the board. Continue Reading →
Op-Ed: Citizens United and the 2012 Election: Bad News and Good News
Guest post from Jeffrey Clements.
Make no mistake, the impact of the Supreme Court’s fiasco in Citizens United v. FEC on the elections and our government was even worse than predicted. That’s the bad news. The good news is that the forces of reform, led by the growing movement for a 28th Amendment to the US Constitution, also made a forceful showing in November. Continue Reading →
2013 AFL-CIO Key Vote: Hewlett-Packard (HPQ) Director Election
The Hewlett-Packard director elections of John H. Hammergren and G. Kennedy Thompson will be the first vote included in the 2013 AFL-CIO Key Votes Survey. The HPQ shareholder meeting is scheduled for March 20, 2013. Votes “AGAINST” HPQ directors Hammergren and Thompson are consistent with the AFL-CIO’s Proxy Voting Guidelines (Item #1-04 and #1-09 on HP’s proxy card). Continue Reading →
Starbucks (SBUX): How I Voted – Proxy Score 56%
Starbucks ($SBUX) is one of the stocks in my portfolio. Their annual meeting is coming up on 3/20/2013. ProxyDemocracy.org had collected the votes of six funds when I checked on 3/15/2012. I voted with management 56% 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 →
Take Action: Last Day to Comment on NYSE Rules on Proxy Distribution Fees
The deadline for comments on this important NYSE rulemaking that must be approved by the SEC is today, March 15, 2013, so act now or forever regret not taking action.
See the rulemaking and comments already posted to SEC site. I’m concerned that provisions meant to facilitate voting on broker platforms may lead us right back into what is essentially broker voting. See discussion of Enhanced Broker’s Internet Platform beginning on page 37. I would much prefer a more open system as I described in my Harvard Law post, An Open Proposal for Client Directed Voting. See also proxy plumbing comments by Moxy Vote and proxy plumbing comments by VoterMedia.org. Continue Reading →
Agency Capitalism: Corrective Measures (Part 2)
This is Part 2 of a post which started out reviewing the important thesis outlined in The Agency Costs of Agency Capitalism: Activist Investors and the Revaluation of Governance Rights by Ronald J. Gilson and Jeffrey N. Gordon (January 1, 2013). See Agency Capitalism: Corrective Measures (Part 1). Current law encourages mindless indexing of portfolios and voting like lemmings to fulfill fiduciary duties. While Gilson and Gordon stressed the need for activist hedge funds, below I explore some additional options. Continue Reading →
Agency Capitalism: Corrective Measures (Part 1)
In their recent paper, The Agency Costs of Agency Capitalism: Activist Investors and the Revaluation of Governance Rights, Ronald J. Gilson and Jeffrey N. Gordon (January 1, 2013) argue that proposed reforms to accelerate disclosure of equity positions and prohibit certain derivatives would discourage the vital role of activist shareowners. Below, I argue in support of their position and for additional measures to counterbalance the central problem of devalued governance rights. Continue Reading →
Reasonable Compensation: We Propose a Role for Investors in Taking on the Income Inequality Challenge
The following is a guest post by Michelle de Cordova, Director, Corporate Engagement & Public Policy, NEI Investments. The article originally appeared on the NEI Investments website and is reproduced here with permission from both the author and the firm. NEI Investments (NEI) is a mutual fund company that “makes excellent, independent portfolio managers accessible to Canadian retail investors through two award-winning fund families: Northwest Funds and Ethical Funds.” It also has Canada’s largest team of in-house socially responsible investing specialists. Continue Reading →
Whole Foods Markets: How I Voted – Proxy Score 69
Whole Foods Markets ($WFM) is one of the stocks in my portfolio. Their annual meeting is coming up on 3/15/2013. ProxyDemocracy.org had collected the votes of five funds when I checked on 3/3/2012, more were added later. I voted with management 69% of the time. View Proxy Statement. (Note to IR departments everywhere, including WFM, can’t we make all proxies indexed with hyperlinks? It would be so much easier to find the topics we’re looking for.) Continue Reading →
Switch to TDAmeritrade and Contribute to Corporate Governance (CorpGov.net) at No Cost to You
TDAmeritrade is running a promotional where they pay current customers $50 to refer new customers. I feel like a high school kid knocking on doors selling candy so that I can go on a class trip to Washington but it really does take money to keep up this website and to report on various corporate governance events around the country. A few $50 “donations” would really help and switching to TDAmeritrade should work out for you… better than buying a box of candy. Continue Reading →
Video Friday – Double Feature: Church of England & Glass Lewis
I’m taking the day off from writing a real post. Instead, I refer you to Usman Hayat‘s informative interview of Edward Mason, secretary of the Church of England’s Ethical Investment Advisory Group (EIAG). I found it interesting how Continue Reading →
Substantial Votes for Better Governance at Disney (DIS)
Yesterday, CalSTRS issued the following statement regarding its votes at the Walt Disney Company Annual Shareholder Meeting in Phoenix, Ariz. This statement is attributable to CalSTRS Director of Corporate Governance, Anne Sheehan.
CalSTRS, holder of more than five million shares of The Walt Disney Company stock, congratulates Disney on its most recent stock performance under the leadership of CEO Bob Iger. Disney has been an economic engine for California for decades and the legacy continues. As a shareholder, CalSTRS has benefitted from this performance. However, we see troubling governance structures emerging at Disney, which fail to protect the investment of our beneficiaries and ensure the company’s continued long-term success. Continue Reading →
Database of “Creative Activism Case Studies”
I’m not endorsing their activities, I’m just passing on a press release from creative groups whose tactics are much more unconventional than mine. I think of them like The Onion, but with more of a social message… although I’m not very familiar with their work. I searched the term “shareholders” on Actipedia.org and came up with three cases; nothing under “corporate governance” or “proxy access,” so relevance may be thin for readers of Corporate Governance (CorpGov.net). Still, you never know what’s ahead without looking.
The Yes Lab and the Center for Artistic Activism are announcing the launch of Actipedia.org, Continue Reading →
Canadian Key Proxy Vote Survey
While the majority of shareholders continue to vote with management, a growing number of shareowners are giving more care and attention to how they vote, with several key votes in 2012 registering 20% or more of shareowners voting against management recommendations. Continue Reading →
Review: Governance, Democracy and Sustainable Development
The subtitle of the book edited by James Meadowcroft, Oluf Langhelle and Audun Ruud is Governance, Moving Beyond the Impasse.
Ground-Breaking Proxy Proposals Headed to Shareowner Vote
Climate Change Portfolio Exposure
Boston Common Asset Management has a proposal that will appear on the proxy of PNC Financial Services ($PNC) requesting that it report to shareowners on the greenhouse gas emissions resulting from its lending portfolio and its exposure to climate change risk in its lending, investing, and financing activities. Watch for your proxy. The annual meeting will be held on April 23, 2012. According to the proposal, Continue Reading →
Video Friday: Brown Dog Consulting
I recently ran across a group of cute but informative videos from Brown Dog Consulting, located near Ottawa. I’m a sucker for simple line drawn cartoons. Susan Mogensen has a great ability to boil down the message to its essence. These are short quick takes, often focusing on a single principle. Here’s a hint of the type of client she’s after: Continue Reading →
Position Available: Executive Director of Lowell Milken Institute at UCLA
The UCLA School of Law is seeking a highly talented, experienced individual to be the Executive Director of the Lowell Milken Institute for Business Law and Policy at UCLA School of Law to start July 1, 2013. The Institute’s mission is to bring world class policy analysis, research and educational opportunities in business law and policy to UCLA, the broader community of Southern California, the nation and the world. Continue Reading →
AFL-CIO Key Votes Survey Results for 2012
Vanguard, Northern Trust, BlackRock and Fidelity scored the lowest among researched funds in supporting AFL-CIO endorsed proxy issues in 2012, according to their 2012 Key Votes Survey. Calvert, Amalgamated Bank, McMorgan and Bridgeway scored the highest.
On proxy-voting issues at 32 companies the AFL-CIO considers representative of a “worker-owner view of value that emphasizes management accountability and good corporate governance,” Vanguard voted against all 32 proposals; Northern Trust, 28 out of 29; BlackRock, 30 out of 32; and Fidelity, 28 out of 30. Continue Reading →
Environmental and Social Shareowner Proposals Gain Traction
Key Characteristics of Prominent Shareholder-sponsored Proposals on Environmental and Social Topics, 2005-2011, released by the IRRC Institute (IRRCi) and researched by Ernst & Young LLP finds environmental and social (E+S) shareowner proposals are gaining increased support from investors at US companies. Download the report, presentation, press release and even replay the webinar from IRRCi’s website. Continue Reading →
SVNACD Now SVDX
The Silicon Valley Chapter of the National Association of Corporate Directors (SVNACD) sent an e-mail to members and friends last Friday notifying us they are changing their name to the Silicon Valley Directors’ Exchange. Here’s the body of the notice from the Board of Directors:
Our new name reflects our mission: we are a forum for education and conversation about current, relevant issues facing boards of directors of Silicon Valley companies. Your affiliation with the new Silicon Valley Directors’ Exchange is automatic (and free). The website of the Silicon Valley Directors’ Exchange (SVDX) is www.svdx.org Continue Reading →
Walt Disney (DIS): How I Voted – Proxy Score 17
The Walt Disney Company ($DIS) is one of the stocks in my portfolio. Their annual meeting is coming up on 3/06/2013. ProxyDemocracy.org had collected the votes of four funds when I checked on 2/26/2012. I added CalSTRS below, which announced their votes earlier. I voted with management 17% 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 Don’t Let Companies Change Shareholders’ Blank Votes) Continue Reading →
Qualcomm Agrees to Additional Disclosure of Political Spending
Qualcomm Incorporated and the New York State Common Retirement Fund (Fund) announced the Fund has dropped the lawsuit it filed on January 2, 2013 because Qualcomm agreed to implement a revised political spending disclosure policy. According to Dr. Paul E. Jacobs, the CEO and Chairman of Qualcomm, 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.
