Binding resolutions are a significant trend, according to Patrick McGurn, director of corporate programs at ISS in an article for Investor Business Relations. In January a federal judge ordered Fleming Companies to include a poison pill proposal, sponsored by the International Brotherhood of Teamsters on its ballot. If the ruling stands up in court it will set a huge precedent. The next target may be super majority requirements contained in company bylaws.
In negotiations with SWIB, Scios Inc. agreed to oppose nonbinding shareholder resolutions in return for a commitment to add two new independent directors to its board over the next year. Apparently Scios Chairman and CEO Richard Casey had indicated he would name former CalPERSexecutive Richard Koppes as chairman but then balked. Dissidents apparently believe SWIB’s deal – trading one board seat per million votes is a good one. Many would love to trade enough votes to change the compensation committee which they believe has made Casey rich and shareholders poorer. (seeISS)
FASB has published a proposed Technical Bulletin providing guidance on accounting for certain employee stock purchase plans under FASB statement 123, “Accounting for Stock-Based Compensation.” Comments are requested by 7/21. A free copy is available by calling FASB at (203) 847-0700, ext 555. (from Investor Relations Business)
The SEC’s Web site now contains over a billion pages of text and data.
The TIAA Securities Division of TIAA-CREF has established a new Emerging Markets Team and expects to be investing a minimum of $200 million to $300 million a year initially, and ultimately upwards of $750 million a year, in intermediate long-term purchases in emerging markets, including investments in structured finance and project finance deals in those markets.
The latest issue of Corporate Agenda carries an article about education in the boardroom. It seems that directors organizations, pension funds, shareholder activists, and universities think it’s important for directors to get a few days of training concerning their responsibilities and current corporate governance issues. “But companies themselves seem less than enthusiastic about the idea of educating their boards.” Their unscientific sample found that “none of the ten randomly chosen S&P 500 companies send their board members on director education courses.” Author Lucy Alexander concludes that for some, “director education will probably only begin to be taken seriously when things start to go wrong, by which time, it may be too late.”
Layoff leaders had average compensation increases of about 67% in 1996 in comparison with 54% for the typical CEO at the top 365 U.S. firms and 3% for workers, according to the report by the Institute for Policy Studies in Washington and United for a Fair Economy in Boston. A Business Week-Harris poll shows that half of top executives think executive pay is out of control. 71% said large companies reward good results but don’t penalize laggards.
Back to the topPublic pension funds are facing growing pressure to kick the tabacco habit. Proponents of divestment are gaining ground in Maine, Vermont, Massachusetts, Texas, Floridia and Oregon according to P&I.
The vast majority of U.S. corporations have used one or more ADR procedures in the last three years. 88% reported using mediation, 79% have used arbitration. Over 84% indicated they would use mediation in the future whereas 69% indicate they will use arbitration in the future. The survey was a joint initiative of Cornell University, The Foundation for the Prevention and Early Resolution of Conflict (PERC) and Price Waterhouse LLP. The findings were culled from over 530 corporations in the Fortune 1,000 category. The smallest respondent had sales of over $1 billion. Contact Christopher Colosi at [email protected].
We have added links to Pensions Investment Research Consultants (the UK’s “leading source of independent advice on proxy voting”) and The Conference Board (“the world’s leading business membership and research organization”). You’ll find them on our Links page under Investor Communications/Relations Services and Public Interest Groups and Research Centers. We count on readers for identifying about 20% of all links and articles, so please let us know when you find something which may be of interest. Contact [email protected]