Archive | April, 2010

Annual Meeting Reports

I don’t get out to attend many annual meetings but I would like to encourage anyone who does to report on what happened. Matthew Rafat, who writes for Seeking Alpha, is the only one I know of who routinely writes up his impressions of these events. On April 14, Rafat wrote Notes From the 2010 […]

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Medium CEO Pay Declines

Median total annual compensation for North American CEOs declined for the second straight year, according to a preliminary CEO pay survey from The Corporate Library. The study analyzed CEO compensation data for fiscal 2009 drawn from 823 proxy statements filed in the United States between July 1, 2009, and March 25, 2010. The report titled […]

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Understanding Proxy Advisors

As annual meetings approach, issuers and investors find themselves needing to work with RiskMetrics, Glass Lewis, PROXYGovernance, and other proxy advisors. Who are these firms and why are they so important? How can they make or break a campaign for board of directors positions or shareowner proposals? The Activist Investor provides a brief review and […]

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UK Institutions to Reveal Votes Under Labor

UK institutional shareholders will be forced to declare how they vote at company annual general meetings (AGMs) if the current governing Labor Party wins the general election on May 6. In addition, it wants a higher threshold of investor support for takeovers: two-thirds of shareholders.  (UK shareholders to be forced to reveal votes if Labour […]

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Reform Indian Corporate Governance Practices

Shubi Arora begins a three part report on the Asian Corporate Governance Association (ACGA) White Paper on Corporate Governance in India. The need for improvement in Indian Corporate Governance Practices: Part I, 4/12/2010. It concluded that while India has enacted numerous reforms in corporate governance, especially in the area of company boards, independent directors, and […]

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How I Voted at BP

Per my disclosures, I own a small amount of BP PLC ADS. Maybe because it is a foreign issue, I didn’t find BP as I tried to use MoxyVote.com but I was able to see how CalSTRS voted at ProxyDemocracy.org. Frankly, I’m not as informed as I would like to be, especially with regard to […]

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WorldBlu List of Most Democratic Workplaces™

For-profit and non-profit organizations from across the U.S., Canada, Mexico, the UK, India, the Netherlands, and Malaysia made the WorldBlu List from industries such as technology, healthcare, telecommunications, media, manufacturing, aerospace, retail and energy, representing over $12 billion in combined annual sales and ranging in size from five to 60,000 employees. Among the winners are: […]

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AFL-CIO Updates 2010 Key Votes

Additions to the 2010 Key Votes include a proposal at Goldman Sachs on political contributions disclosure and a proposal at Chesapeake Energy to prohibit margin trading by executives. The list of votes for the AFL-CIO Key Votes Survey is current as of April 8, 2010 and will be updated as the proxy season commences.

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CorpGov.net WayBack Machine

Stepping ten years into the past, in April of 2000, the SEC proposed rules requiring that mutual funds and investment advisors disclose their proxy votes. See my Comments on SEC Proposed Rule: File No. S7-10-00. It was about time. In 1988 the Department of Labor (DOL) set forth the opinion that, since proxy voting can […]

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Goodyear Vote and the Timeliness of Analysis

The Corporate Library Blog today carries a great post, Inflated CEO pay at Goodyear Tire. Good puns and even better information on CEO Robert J. Keegan’s “maximum payout for a net loss.” Mr. Keegan received four separate stock option grants. The largest of the four market-priced grants, almost 500,000 of them, was at $4.81. Less […]

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"Corrected" Ballot at Altrea Tips Votes to Management

The latest development in the case of unfair ballots favoring management at Altrea is that Broadridge has now “corrected” the language on their voter information form (VIF) for the shareowner proposal to eliminate supermajority voting requirements. However, the “correction” fails to accurately portray the proposal at all, and simply places yet another hurdle in the […]

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Shareowner Fiduciary Responsibilities

Lynn Stout has been in the forefront of those asking us to reexamine the role of shareowners. For decades, the possibility that minority shareholders in public firms might use their power in self-serving ways attracted little attention. However, she argues that  until recently minority shareowners have been largely passive.   When minority shareowners have become activists, […]

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Fix the Boards – Fix the System

Sea Change Radio Executive Producer Bill Baue is joined in studio by John Gillespie, co-author with David Zweig, of Money for Nothing: How the Failure of Corporate Boards is Ruining American Business and Costing Us Trillions. Check out the audio file. Gillespie traces the roots of their book’s title to the old Dire Straits song and describes how […]

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TIAA-CREF Outsourcing to India

TIAA-CREF (TC) praises itself on issues of labor/human rights, promoting its shareholder activism work, social screening, and otherwise. Some of that is certainly deserved, though much came about from participant and stakeholder pressure. Working through a school system chapter (CUNY), MakeTIAA-CREFethical.org helped get the 1.4 million strong American Federation of Teachers to pass resolutions demanding […]

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Proxy Preview 2010

Proxy Preview is an annual publication that focuses on upcoming social and environmental shareholder proposals. However, it also includes some information on governance proposals as well. It was initiated to help foundations and endowments better align investment and mission but it is useful for other organizations or individual shareholders. The Proxy Preview is published by […]

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Impacts of Long-Term Investors on Over-Investment

Cristina Cella investigates whether institutional investors influence firms’ investment policies. By virtue of their significant ownership stakes and investment horizons, long-term institutional investors should closely monitor management and thus reduce agency costs. Using a panel dataset of 2,511 U.S. manufacturing firms that went public in 1980-2003 and using several econometric specifications, she find that firms with […]

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Banking on Governance

Leverage and Risk in US Commercial Banking in the Light of the Current Financial Crisis (available from SSRN) by Christian C.P. Wolff and Nikolaos I. Papanikolaou examines the relationship between leverage and risk in US commercial banking market. From their abstract: Our findings indicate reliably that both on- and off-balance-sheet leverage contributes to (systemic) risk, […]

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CEO Pay & Risk Reduction

In Reining in Excessive Risk Taking by Executives: Experimental Evidence, researchers Mathieu Lefebvre and Ferdinand Vieider find that excessive risks are likely to be reduced by aligning executives’ interests with those of shareowners. (paper available at SSRN, March 2010) Abstract follows: Compensation of executives by means of equity has long been seen as a means […]

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Lists for Governance & Board Candidates

My friend Bob Tricker, a leading governance academic and expert, has written a wonderful online booklet, Twenty Practical Steps to Better Corporate Governance for Corporate Secretaries International Association. He sought input from experts worldwide and came up with the following list: Recognize that good corporate governance is about the effectiveness of the governing body — […]

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CorpGov Bites

What’s the difference between the role of advisors and a board of directors for a start-up? At what point in your development should you build each group? Tips for creating an Advisory Board or Board of Directors: choosing the right people, defining objectives and expectations and compensation issues (i.e. What’s in it for them?) Common […]

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Boardroom Insider: Curbing Board Expenses

The April edition of Ralph Ward’s Boardroom Insider offers excellent tips on curbing board expanses. Costs of corporate governance soared after passage of Sarbanes-Oxley. While the rate of increase has now declined, governance costs continue to climb, with paperwork and incentives to hire more outside counsel and consulting advice. Ward points out that money saved […]

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No One Knew it Existed: The SEC's Bounty Program

Since its inception in 1989, the SEC has paid out a grand total of $159,537. Five claimants have received money from the program since 1989, with one claimant taking home the bulk, $100k. The other four split $60,000. Bounty can’t exceed 10% of the amount recovered from a civil penalty but that limitation doesn’t seem […]

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The Race Out of Delaware

Whether a race to the top or a race to the bottom, Delaware has long been the leading “brand” in attracting incorporations. However, researchers John Armour, Bernard Black and Brian Cheffins now find that over the past decade the proportion of corporate suits involving Delaware public companies filed in Delaware has dropped markedly. Since one […]

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Interlocking Web of Gatekeepers

The lawyers, investment bankers, accountants and others who monitor and control the disclosure decisions of corporate clients, deterring corporate securities fraud, are generally reviewed independently to determine contributions to failure, such as the recent financial crisis. Andrew Tuch says this unitary methodology overlooks the often real phenomenon of multiple interdependent gatekeepers who form an interlocking […]

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Non-Shareowner Standing to Sue in Corporate Elections

In Haah v. Kim, 2009 DJDAR 9071 (June 22, 2009), two individuals who entered into agreements to acquire shares were able to bring action seeking to invalidate an election of directors under California Corporations Code Section Section 709. The Court of Appeal took a broad interpretation of the term “shareholders.” California’s statute applies to foreign […]

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Stanford's Rock Center Lists CorpGov Cases

The Rock Center for Corporate Governance at Stanford University makes available case studies used in teaching corporate governance. Listings are on SSRN. Typical issues covered include: Say on Pay, activist investing, Netflix and their compensation packages that allow employees to determine their own mix of cash and equity-based awards, 10b5-1 plans providing a safe haven […]

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Ownership Responsibilities

Lindsay Tomlinson, Chairman of the National Association Pension Funds, addresses the ICGN and notes that the Institutional Shareholders’ Committee put out a Statement of Principles on Shareholder Engagement. It will now have some enforcement teeth. (Check Against Delivery, 3/25/2010) Firstly we expect that it will be an FSA requirement that all investment management firms authorised […]

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Joo Calls for Explicit Examination of Normative Foundations in Corporate Governance Theory

In his recent paper, Theories and Models of Corporate Governance, Thomas Wuil Joo (incorporated into forthcoming Corporate Governance: A Synthesis of Theory, Research, and Practice (Robert W. Kolb Series), briefly surveys a history of American models of the corporation. On the currently dominant model, contractarianism, he notes that whereas early contractarians insisted that corporate governance […]

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