Author Archive | James McRitchie

United Natural Foods Inc: Proxy Score 55

United Natural Foods IncUnited Natural Foods Inc (UNFI) is a distributor and retailer of natural, organic and specialty products. The Wholesale segment is engaged in the national distribution of natural, organic and specialty foods, produce and related products in the United States and Canada. The Other segment includes a retail division, which engages in the sale of natural foods and related products to the general public through retail storefronts on the east coast of the United States; a manufacturing division, which engages in importing, roasting and packaging of nuts, seeds, dried fruit and snack items, and its branded product lines. Its operations consist of three operating divisions: Wholesale Division, Retail Division, and Manufacturing and Branded Products divisions. The Company offers 100,000 natural, organic and specialty foods, and non-food products, consisting of national, regional and private-label brands.

Their annual meeting is coming up on December 15, 2016. ProxyDemocracy.org had collected the votes of 1 fund families when I checked. I voted FOR proxy access; AGAINST pay and compensation committee. I voted with the Board’s recommendations 55% of the time. View Proxy Statement. Continue Reading →

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Kamonjoh Leads 50/50 Climate Project

Edward Kamonjoh

Edward Kamonjoh

The 50/50 Climate Project, a not-for-profit resource and action center for institutional investors focused on increasing the climate competency of boards of directors of large publicly traded corporations, is pleased to announce the appointment of Edward Kamonjoh as its inaugural Executive Director.

Kamonjoh joins the 50/50 Climate Project from Institutional Shareholder Services (ISS) where he served most recently as head of U.S. Strategic Research and Analysis. He previously led ISS’ ESG Research team and was a member of ISS’ Global Policy Board. Kamonjoh brings more than 14 years of experience working with some of the world’s largest institutional investors on corporate governance and ESG topics. Continue Reading →

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Wells Fargo Bank: Independent Board Chair (Update)

Wells Fargo Bank

Update: Wells Fargo & Company (NYSE: WFC) today announced that its Board of Directors has amended the Company’s By-Laws to require the separation of the Chairman and CEO roles and for the Chairman and Vice Chairman of the Board to be independent directors.  The Board approved the By-Law amendments, which are effective immediately, on November 29, 2016. According to Stephen Sanger, Chairman of the Board,

The Board previously acted to elect an independent Chairman to lead the Board and we believe formalizing this structure is the right decision at this time for the Company and its investors, customers, and team members. Efforts to restore the trust of our customers and team members are well underway and will continue until we have fully addressed the issues surrounding retail banking sales practices.  While the investigation of these practices and related matters by the independent directors continues in earnest, we believe this action will enhance the Board’s independence and its oversight of the Company’s management, and we appreciate the feedback that we received from our investors on this matter.

As a result the investors who had filed a resolution calling for such a policy are planning to withdraw their resolution and support this new governance reform.  They have also scheduled a call with the new chair to discuss other governance concerns. (prior post below)

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Microsoft (MSFT): Proxy Score 56

MSFTMicrosoft Corporation (MSFT), operates a technology company, develops, licenses, and supports software products, services, and devices worldwide.

MSFT’s annual meeting is coming up on November 30, 2016. ProxyDemocracy.org had collected the votes of 3 fund families when I checked. Vote AGAINST pay, pay committee, stock plan. Vote FOR all other proxy items, especially my proposed amendments to proxy access to increase the ability of shareholders to group together to nominate directors.  I voted with the Board’s recommendations 56% of the time. View Proxy Statement via iiWisdom. Continue Reading →

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The Responsible Investor Handbook: Review

Responsible Investor HandbookThe Responsible Investor Handbook; Mobilizing Workers’ Capital for a Sustainable World by Thomas Croft and Annie Malhotra provides a ‘how-to’ manual for workers and trustees who seek to ensure our money is working us, not against us. Buy the book from Greenlead Publishing or Amazon.

As I write this review, the US SIF Foundation released their 2016 Biennial Report on Sustainable, Responsible and Impact Investing (SRI) Trends. SRI assets now account for $8.72 trillion, or one in five dollars invested under professional management in the United States, according to the report.  Continue Reading →

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Reed’s Inc: Proxy Score 55

Reeds IncReed’s Inc. (REED), develops, manufactures, markets and sells fantastic natural non-alcoholic carbonated soft drinks and other confectionaries, such as Reed’s Ginger Brews; Virgil’s Root Beer, Cream Sodas, Dr. Better and Real Cola, including ZERO diet sodas; Culture Club Kombucha; China Colas; Reed’s Ginger candy and ice creams, and Sonoma Sparkler and other juice based products.

Their annual meeting is coming up on November 29, 2016. Unfortunately, the company is too small for ProxyDemocracy.org to follow, so no help there. However, I have been heavily involved with the Committee to Rescue Reed’s, so am intimately familiar with many of the issues. Vote FOR proxy access, split chair/CEO, forcing zombie directors to resign, all new board nominees and pay. Vote AGAINST Christopher J. Reed,  Auditor, and Repricing options. I voted with the Board’s recommendations 55% of the time. View Proxy Statement; again, the company to small to pull up proxy via iiWisdom. Continue Reading →

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Committee to Rescue Reed’s: Proxy Vote

Committee to Rescue Reet's - Room for More Shareholders

Committee to Rescue Reed’s Declares Victory

The Committee to Rescue Reed’s declares victory and states how members intend to vote their proxies. With the annual meeting now set for November 29, I will post a more detailed analysis of the proxy by tomorrow. I have already received a number of inquiries from those asking how I will vote. Advice to me? Use the comment box below.

The Committee to Rescue Reed’s Announces That It Has Completed Its Near-Term Objectives at Reed’s and Is Therefore Withdrawing Its Board Nominees and Proxy Contest

Gratified That its Involvement Led to a Reconstituted Board with Four New Independent Directors

Rescue Reed’s Members State Their Intention to Vote Against Chairman & CEO Chris Reed for Failing to Work in Good Faith with the Committee to Appoint Shareholder Nominees to the Board

Rescue Members Intend to Remain Vigilant in Monitoring the Performance of the Company, its CEO and New Directors Continue Reading →

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Tipping Points for Intentional Investors

Tipping Points 2016Tipping Points 2016,  a new state-of-the-industry report profiled 50 investors investors with $17.3 trillion in assets, finds that investors are deliberately incorporating new investment approaches to help address systems-level risks and opportunities. The study indicates that investors are intentionally attempting to influence systems-level risk factors previously ignored as beyond the impact-ability of institutional investors.
The report  identifies ten tools through which major institutional investors are deploying “intentional, systems-level investing.” The report also offers specific examples of investors working to impact global challenges including financial system sustainability, climate change and human rights issues.

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US SIF Foundation Issues SRI Report

US SIF Foundation 2016 btrends reportUS SIF Foundation Releases 2016 Biennial Report on UA Sustainable, Responsible and Impact Investing Trends. Sustainable, responsible and impact investing (SRI) assets now account for $8.72 trillion, or one in five dollars invested under professional management in the United States according to the US SIF Foundation’s biennial Report on Responsible and Impact Investing Trends 2016, which was released today. Continue Reading →

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GAMCO Invokes Proxy Access at National Fuel Gas

GAMCOGAMCO First to Invoke Proxy Access

On November 9, 2016, GAMCO Asset Management Inc. (“GAMCO”) and certain affiliates, delivered a letter to the Issuer (the “Nomination Letter”) nominating Mr. Lance A. Bakrow (the “Nominee”) for election to the Issuer’s Board of Directors (the “Board”) at the Issuer’s 2017 Annual Meeting of Stockholders (the “2017 Annual Meeting”). As far as I know, this is the first use of a proxy access bylaw.

GAMCO’s nomination is pursuant to Article IA of the Issuer’s Bylaws, which is a recently-adopted proxy access provision which is intended to provide stockholders with greater access to put forward nominations of individuals for director on the Issuer’s proxy card.  GAMCO believes its Nominee’s skill sets and highly relevant business and financial experience, as evidenced by his bio included in the 13D/A filing, will be extremely valuable to the Issuer and GAMCO is confident that its Nominee will have an immediate positive impact on the Board. Continue Reading →

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Value Creation Thinking: Review

Value Creation ThinkingWhile primarily concerned with explaining value creation thinking and the life-cycle valuation framework, the book also delves into context, specifically how Bartley Madden views evolved.

I find his work compelling, at least in part because he shares my interest in understanding the world from the bottom up, instead of top down. Additionally, he focuses attention on “how we know what we think we know,” which takes me back to my studies in the sociology of knowledge. I am less sure about his embrace of systems theory but he deploys that tool well in the context of analyzing firm performance.

Value Creation Thinking: On Capitalism

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Business Roundtable to SEC: Muzzle Shareholders

proxymonitorsmeasurecsmypropsAs I indicated yesterday, I have been contacted by several reporters for comments on the latest screed from the Business Roundtable seeking to muzzle the rights of shareholders. Although I have much more productive ways to occupy my time, it does make sense for me to provide at least some response, since the Business Roundtable names me among those “pursuing special interests… frequently at a significant cost to the company.”

Their statistics do not come from an objective third party, such as Proxy Insight, but from the conservative Manhattan Institute‘s Proxy Monitor (funded in part by the Koch Family Foundations), covering only 250 out of thousands of American companies. The Business Roundtable titled their report Responsible Shareholder Engagement And Long-Term Value Creation: Modernizing the Shareholder Proposal Process. Don’t be fooled by the numbers they use, claiming few proposals pass. The Business Roundtable doesn’t count proposals that don’t make it to the proxy because proponents and companies have reached agreement. They don’t count proposals filed at the thousands of small companies, which tend to have poorer corporate governance practices. ‘Modernization’ for the Business Roundtable means moving the SEC further and further from its primary mandate of ‘investor protection’ by creating a democracy-free zone for entrenched managers.  Continue Reading →

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No-Action Requests & the Business Roundtable

Most Popular Topics of No-Action Requests for 2016

Most Popular Topics of No-Action Requests

Yesterday, several reporters asked me to comment on no-action requests and the SEC’s denial to Apple, as well as the Business Roundtable’s fanciful notions regarding the need for reform of the proxy proposal process. I am reluctant to give the Business Roundtable’s proposal, Modernizing the Shareholder Proposal Processany more ink but will just touch on one of their issues here as I explain the Apple decision. 

No-Action Requests: Apple and Proxy Access Lite

The SEC has consistently denied no-action requests to companies where the proponent asks for modifications to bylaws when the companies have made no modifications in the direction requested. See H&R Block and Microsoft as prior examples. Apple is no exception. This is nothing new. Continue Reading →

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Clorox Company: Proxy Score 93

Clorox Company

Clorox Company

Clorox Company (CLX), operates through four segments:

  1. Cleaning – laundry, home care and professional products.
  2. Household – charcoal, cat litter and plastic bags, wraps and container products.
  3. Lifestyle – food products, water-filtration systems and filters, and natural personal care products.
  4. International many of the same consumer brands. 

Their annual meeting is coming up on November 16, 2016. ProxyDemocracy.org had collected the votes of 2 fund families when I checked. Vote FOR reducing the threshold to call a special meeting and all other items on the proxy. I voted with the Board’s recommendations 93% of the time. View Proxy Statement via iiWisdom. Continue Reading →

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The Handbook of Board Governance: Part 8

the-handbook-of-board-governance-a-comprehensive-guide-for-public-private-and-not-for-profit-board-members

The Handbook of Board Governance

This may the last installment for my review of The Handbook of Board Governance: A Comprehensive Guide for Public, Private, and Not-for-Profit Board Members. With the current post, I provide comments on Part 8 of the bookGovernance of Different Forms… a kind of catch-all for nonprofits, non-North American firms, startups, small-caps, and family firms… whatever didn’t easily fit in prior parts. 

See prior posts on introductory comments and those on Part 1Part 2Part 3Part 4, Part 5, Part 6 and Part 7. As I have indicated before, The Handbook of Board Governance is one of the most popular collections of articles of interest in the field of corporate governance. Look at where it ranks at Amazon today within the entire field (fluctuates daily) and you will note that its scope is arguable much broader than all those ranking above it. At more than 850 pages with 50 authors for less than $50, it has to be a best buy for those looking for practical information and theory in corporate governance today, and for several years going forward. Continue Reading →

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