Joe Mont writes New Efforts Push Investors to Take a Stand (thestreet.com, 3/22/2010). When shareowner returns slid, CEOs continued to be paid 319 times what the average employee drew down. The checks and balances built into corporate governance don’t seem to be working. And how could they, when only 20% of individual shareowners bother to vote? Yes, CEOs are responsible to boards elected by shareowners… at least in theory. Mont reports on some of the new tools that might just make those checks and balances more effective.
MoxyVote.com hopes to be a portal for proxy materials and online voting. Posting the advice of “advocates” and allowing shareowners to vote directly on their site, Moxy Vote could become the next Facebook for people who take their role as owners seriously. ProxyDemocracy.org, helps shareholders vote by publicizing the votes of institutional investors. They pay for proxy research and advice; you can benefit from it by following their advice. It also publishes and scores how mutual funds have voted, so investors can “purchase funds that represent their interests and pressure those that don’t.” ShareOwners.org is helping shareowners advocate together — pushing the Dodd bill, majority voting, and proxy access.
It is good to see theStreet.com bringing attention to these important resources. Of course, we’ve been bringing these sites to the attention of our readers for years. Unfortunately, with an internet traffic ranking of 380,000 at CorpGov.net v 2,500 for theStreet.com, we don’t reach anywhere near the audience. Will they take it to the next level? For example, will they join with ShareOwners.org in asking for their readers to call their Senators TODAY at 202-224-3121 and urge them to support the corporate governance provisions of the Dodd bill. (main points) You can also send them a message through their web-based contact forms. Read some helpful do’s and dont’s from CalPERS and others regarding what to say or write (press release). Read a letter from major public employee retirement systems. I told my Senators the following:
In uncontested elections, directors should be elected by a majority of votes cast. However, the bill needs amendments to give this provision teeth or else boards will simply refuse to accept the resignations of directors who fail to win a majority vote. Please amend the bill so that directors who fail to get a majority vote must be removed within 90 days.
Shareowners should have the right to place director nominees on the company’s proxy. Please ensure the SEC has full authority to proceed with their proposed proxy access rulemaking.
Companies should give shareowners an annual advisory vote on executive compensation. I’m under no illusion this will immediately bring CEO pay back to earth. However, it will get boards talking to shareowners about this issue and it seems likely to reduce the use of incentive structures based on “heads I win, tails you lose.”
Now if the hundreds of thousands of Street.com readers would do the same, we could begin to make real progress in acting like shareowners, not just shareholders.