Video Friday: Larcker on ISS

David F. Larcker

Many institutional investors rely on a proxy advisory firm to assist them in voting the company proxy and fulfilling their fiduciary responsibility to vote in the interest of beneficial shareholders. The largest and most influential proxy advisory firm is Institutional Shareholder Services (ISS). The recommendations of ISS are not inconsequential. Academic and professional research suggests that a recommendation by ISS can change the outcome of a vote by 15 to 20 percent, depending on the matter of the proposal. Continue Reading →

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Trading Cards

I’m on vacation but here’s part of Broc Romanek‘s post from yesterday on SEC Trading Commissioner Cards and a great cartoon by Hank Blaustein, which you can buy from Grant’s Interest Rate Observer for $150, signed by the artist, probably a better investment than most stocks.  Simon Billenness, Consultant, Corporate Responsibility and Socially Responsible Investment, tells me:

I actually have two of these SEC trading cards!  There were people distributing them outside Union Station last week.

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GMI Incorporates Trucost Data into Analyst Platform

GMI and Trucost announced a strategic partnership to incorporate Trucost environmental performance data into the GMI Analyst research platform. The agreement strengthens GMI’s existing governance analysis and will enable GMI clients – leading institutional investors, banks, insurers, auditors, regulators and corporations – to incorporate a measure of environmental risk alongside traditional financial metrics. Continue Reading →

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Stratasys (SSYS): How I Voted

Stratasys ($SSYS) is one of the stocks in my portfolio. A special meeting of their shareowners is coming up on 9/14/2012. ProxyDemocracy.org had collected the votes of 2 funds when I voted on 9/12/2012.  I voted with management 33% of the time.

Frankly, I’ve been busy at conferences and have now left on vacation. I don’t want to take the time to carefully analyze this proxy. Therefore, I’m simply voting with CBIS. Continue Reading →

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ISS Should Reconsider Their Analysis of H&R Block Proxy Access Proposal

The influential proxy analyst, Institutional Shareholder Services (ISS), recommends voting against Kenneth Steiner’s proxy access proposal at H&R Block (HRB) on 9/13 because it “could undermine the efforts of larger, long-term shareholders whose interests might better reflect those of the broader shareholder base.” Their logic appears flawed. Larger, longer-term shareowners would gain rights, not lose them, under the proposal. CBIS changed their vote after reading this post and talking to me (see ProxyDemocracy.org). Will your fund do the same? Continue Reading →

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Donna Dabney Heads The Conference Board's Governance Center

The Conference Board today announced that Donna Dabney has joined The Conference Board as Executive Director of the Governance Center. In this new role, Ms. Dabney will lead a team that will explore restoring trust in public corporations, identifying sustainable corporate governance policies and understanding global governance issues. The Governance Center will continue to sponsor rigorous governance research and education and will serve as a Continue Reading →

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Video Friday: Clawback Invoked

With the passage of the Dodd-Frank and the Sarbanes Oxley Acts, clawback policies have become increasingly prevalent among public companies. However, it is rare to find a company actually put a clawback policy into effect. Citing Equilar’s findings from the 2012 Clawback Policies Report, we review what a clawback policy is and we examine what triggered one major U.S. bank to put their clawback policy into action. Continue Reading →

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SEC to Hold Small Business Advisory Meeting in San Francisco

The Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies will hold its next meeting in San Francisco on September 7 to discuss market structure and disclosure rules among other issues affecting smaller companies.

The Advisory Committee was formed last year to provide a formal mechanism for the SEC to receive advice and recommendations on privately-held small businesses and publicly-traded companies with a market capitalization of less than $250 million.  Continue Reading →

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Modeling Black Swans

GMI Ratings has long maintained that the increasing frequency of Black Swan events in capital markets will continue to challenge traditional approaches to risk modeling and portfolio management. For at least the past two decades, doubts have been mounting about the ability of classical economic theories and portfolio management philosophies to reliably describe, explain or predict anomalous trends and events in the stock market. Value-crushing scandals, such as those at Chesapeake Energy, Carnival, Wal-Mart, Halliburton, MF Global, News Corporation and BP have become all too familiar. Continue Reading →

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Pershing Square's Battle Over CP Argues for Proxy Access & Alternative Proxy Advice

After his victory at Canadian Pacific Railway (CP), Ackman claimed “Directors are sitting up more straight and reading board materials more carefully and questioning the CEO more intently. That is a very, very good thing.” Who can argue with that? But will better posture, thorough reading of thousands of pages of board materials and asking more questions be enough? I argue it would pay boards to get more frequent advice from shareowners and better analysis by proxy advisors. Continue Reading →

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