Archive | April, 2010

MoxyVote.com on TV

Mark Schlegel, co-founder and vice-president of business development, Moxy Vote, tells BNN how people can use social media to push corporate governance. (Swaying the Vote Through Social Media, The Close, April 27, 2010)

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Top Pay Issues

Pearl Meyer & Partners presents their annual look at the Top 10 executive pay and governance issues in 2010: Revisit Your Executive Compensation Strategy and Philosophy Address Possible “Red Flag” Compensation Practices Validate and, Where Needed, Strengthen Pay-for-Performance Relationships Expand Assessment of Compensation-Related Risk Review Long-Term Incentive Program Design Adopt an Enforceable Clawback Policy Reconsider […]

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China's Increased Voting Power

World Bank members voted to place China’s voting power in the organization behind the United States and Japan. The China’s stake in the bank climbed from 2.8% to 4.4 %. Given that China has made many achievements in eradicating poverty, we have reasons to believe the country will contribute more to global efforts on poverty […]

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Common Law Power Struggle

The Rising Tension between Shareholder and Director Power in the Common Law World by Jennifer G. Hill, available at SSRN, explores the rising tension between shareholder and director power in the common law world. First the article analyzes key arguments in the shareholder empowerment debate, and current US reform proposals to grant shareholders stronger rights, […]

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Annual Meeting Horror Stories

The Council of Institutional Investors wants your horror stories on barriers to annual shareowner meeting attendance. We’ve been hearing that companies seem to be making investors jump through more and more hoops to attend annual meetings. If you have any horror stories that will help Council staff identify and discourage unreasonable barriers to attending annual […]

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Ensuring Bad News Gets Above the 77th Floor

Recommended reading or listening: Diane Sanger Memorial Lecture by Nell Minow, sponsored by the SEC Historical Society and delivered on March 17, 2010. Her talk took on a wide range of topics, including: What Karl Marx, Adam Smith, Benjamin Franklin, and Andrew Carnegie had in common, Adventures with Bob Monks, The impact of Lewis Gilbert, current […]

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Ramblings on Votes, the Power of CorpGov.net, TCL and Jim Crow for Retail Shareowners

I see from Alcoa’s 8-K filing, that William Steiner’s proposal to end supermajority requirements won 68%. Last year, a similar proposal won 73% but this year management put their own proposals on the proxy, so some just voted for their proposals to end supermajority requirements in three areas. Management’s highest proposal won 736,143,769 votes, with […]

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Corporate Governance Paradigm in Crisis

The March 2010 edition of Corporate Governance: An International Review (CGIR), one of our favorite “stakeholders,” contains three articles that struck me as particularly significant. Corporate-Governance Ratings and Company Performance: A Cross-European Study by Annelies Renders, Ann Gaeremynck, and Piet Sercu finds a significant positive relationship between corporate-governance ratings and performance across 14 developed economies in Europe from 1999-2003. The strength […]

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CorpGov Bites

The rewards of virtue Does good corporate governance pay? Studies give contradictory answers (The Economist, 4/26/10). Interesting review of a small body of research. Yet, the article provides no real contradiction to the idea that good corporate governance does pay… we’re just having some problems measuring it. Riding Herd on Company Management, WSJ, 4/27/10. Roger […]

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Armchair March Protests Inaction on Wall Street Reforms

When some 10,000 union members and activists march on Wall Street April 29, they will be joined by “virtual marchers” demanding an end to Big Banks’ reckless practices and insisting on real Wall Street reform. The AFL-CIO will print the name and personal message of virtual marchers on stickers that marchers will carry to insist […]

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CEO Pay in the Context of Society

An alternative approach is offered by Jay Lorsch and Rakesh Khurana in The Pay Problem, Harvard Magazine, May-June/2010, which theorizes find that the current compensation trouble stems from unexamined assumptions about the purpose of boards, executives, and the corporation. The underlying assumption that executives would work more effectively if their monetary rewards were tied to […]

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Say on Pay With Teeth Down Under

Australian Minister Chris Bowen plans to introduce extensive executive remuneration reforms designed to force boards to be more accountable and give shareholders more power, including the “two strikes” proposal, which will strengthen the non-binding vote on remuneration and set out consequences where companies do not adequately respond to shareholder concerns on remuneration issues as follows: […]

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1.59% of total household income, about $8.7 trillion, went to the top 400 wealthiest US households in 2007, up from 0.52% of $3.6 trillion in 1982. If I’m getting all my zeros right, that works out to about an average of $345,825,000 each for those top 400 families.

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Apache v. Chevedden: a Non-Starter

It would appear that Apache v. Chevedden is now fading into oblivion. Two companies have sought no-action letters based Apache-inspired arguments. Both have failed. To briefly review: Susman Godfrey L.L.P. Wins First-of-Its-Kind Judgment for Apache Against Shareholder Activist, MSN Money, 3/12/10; Susman Godfrey L.L.P. Wins First-of-Its-Kind Judgment for Apache Against Shareholder Activist, Forbes, 3/12/10; Susman […]

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Get Out the Vote on Financial Reform

I strongly encourage readers to send a letter to your Senators on behalf of you as an individual investor and/or your firm and to also to ask your friends and clients to send letters/emails to support passage of comprehensive financial regulatory reform. Download a model letter (in Word) written by Joe Keefe, CEO of Pax […]

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The Corporate Library's Governance Ratings and Equity Returns

Research on the relationship of governance ratings systems to investment performance has shown mixed results, and the significance of particular governance features to equity returns is widely debated. A recent study by The Corporate Library suggests their ratings system, focused on the identification of agency problems rather than supposed best practices, can contribute significantly to […]

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Facebook Forum Official at TVI Pacific

In a development that demonstrates the potential for the social web to bring companies and their shareholders closer,  Canadian-based copper producer TVI Pacific Inc. (TSE:TVI) has recognized the discussion board on the company’s Facebook page as its “official Corporate Discussion Forum.” The move to official status was announced in an April 22 news release providing […]

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BPA, It's The Real Thing

The first ever shareholder resolution on BPA that was filed at Coca-Cola received 22% of the vote. The information below is from Michael Passoff of As You Sow, which was a co-filer on the shareholder resolution: Our speaker at the Coke annual meeting just reported that the shareholder resolution on BPA received a 22% vote. […]

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Eli Lilly

A proposal to remove an 80% approval threshold for takeover bids against the wishes of Lilly’s board received approval from shareholders owning 74% of Lilly’s shares. But to pass, the proposal needed the approval of investors holding 80 percent of all of Lilly’s outstanding shares. Another Lilly proposal aimed at improving governance also failed to […]

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Treasury Cop-Out at Citigroup

Of the 30% support achieved for faith-based investors resolution urging greater derivatives disclosure at Citigroup, ICCR Executive Director Laura Berry said: “We are delighted with the clear support for the principles reflected in the apparent high level of shareholder support for this resolution. Given the history of ICCR attempts to bring these issues to the […]

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How I'd Vote at Coke

As can be seen from the list of stocks I own, I don’t have any direct investments in Coca Cola (KO). However, I do have indirect holdings through my pension at CalPERS and through several mutual funds and a strong longstanding concern about the safety of Bisphenol-A (BPA), a chemical used in the epoxy lining […]

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Jim Crow "Protections" for Retail Shareowners

A strange revolution, or perhaps a counter-revolution against management excesses, is under way, a quiet and orderly one of small capitalists, determined to win democracy and fair treatment from the tycoons they pay to manage American business. — Lewis D. Gilbert, Dividends and Democracy, 1956 John Chevedden sent me an e-mail over the weekend, attaching […]

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What Should Boards Learn From Goldman Sachs?

As most know by now, the SEC sued Goldman Sachs alleging that the bank created and sold “synthetic” collateralized debt obligations, CDOs linked to subprime mortgages without disclosing to buyers that hedge fund Paulson & Co. helped pick the underlying securities and bet against the vehicle. Goldman is strongly disputing the SEC’s allegations. Business Week […]

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How I Voted: Berkshire Hathaway & Scripps Networks Interactive

I found no advance voting recommendations or advocates regarding Berkshire Hathaway from either ProxyDemocracy.org or MoxyVote.com.  No items were on the proxy other than election of directors. There seems to be a slight glitch on MoxyVote.com, since it only appeared to allow voting in favor of all director candidates or withholding. That wan’t a problem […]

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How I Voted at Kellogg (K)

First I checked MoxyVote.com and noticed the voting deadline is 4/19/2010, so I stopped procrastinating. I didn’t see any voting advice there, so I looked at ProxyDemocracy.org. Two funds listed there didn’t vote. The funds that did vote, voted for all items, including my resolution to reduce supermajority voting requirements. I’ll do the same, including […]

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Free Webinar: Director Elections 2010 – A Shareowner's Guide

Join The Corporate Library on April 28 for a free webinar with Chief Analyst and co-founder, Ric Marshall. New SEC proxy disclosure rules and changing director election standards have greatly expanded the ability of shareholders to influence election outcomes for individual corporate directors, but for many investors they have also increased the complexity and uncertainty […]

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Parallel Universes Undercuts its Own Arguments

In his article The Parallel Universes of Institutional Investing and Institutional Voting, Charles M. Nathan appears to pine for the days when institutional investors took the “Wall Street Walk” if they disagreed with management on governance issues. T. Boone Pickens Jr’s response to that perspective: That’s like the gardener telling the estate owner, “If you […]

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How I Voted at Citigroup

ProxyDemocracy.org was very helpful, with several funds reporting their votes in advance. Also very helpful was CalPERS’ site, which provided reasons for their votes.  I voted for most of the directors, along with most of the funds who reported voting in advance on ProxyDemocracy. However, I joined with CalPERS in withholding my vote from the […]

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