Newground Social Investment is looking for a Massey Energy shareholder to file a corporate governance resolution regarding vote-counting. They found out late last week that the shareholder that they were teaming up with did not qualify to propose the resolution, so they are scrambling at the last minute to find another Massey shareholder that does qualify to propose the resolution.
Companies (under Delaware law) can use variant vote-counting formulas that severely disadvantage shareholders, such that majority votes (using the required SEC formula for determining resubmission eligibility) get reported out to shareholders and the press as failing.
Massey did this last year on a shareholder-sponsored resolution — reporting a 53% vote as garnering only 36.8%. Yet, the company counts differently for management-sponsored proposals — but in each instance they use the formula that most favors management.
The Seattle Times ran a story about this issue which provides further information.
It’s a very good resolution that, because it addresses fairness and shareholder democracy, should be equally appealing to progressive or conservative alike.
It will be a 1st-year resolution at Massey.
At another company Newground got an 17.8% 1st-year vote last year — this was with proxy services recommending against it. This year the proxy advisory services are going to reverse course and recommend for it, so with that (along with everything else that’s gone on at Massey in 2010), this should end up being a very successful undertaking.