Medtronic: How I Voted

Medtronic (MDT) is one of the stocks in my portfolio. Their annual meeting is coming up  on August 25. I voted yesterday using the platform. However, it is too late to do that today, so you’ll have to use had recommendations from seven “good causes,” which included two consolidations. had only two participating funds voting but you can see them both at the same time and make easier comparisons.

Looking at Medtronic’s proxy, the Summary Compensation Table shows that William A. Hawkins, the combined CEO/Chairman, was the highest paid named executive officer (NEO) at a little over $9.5 million. According to the United States Proxy Exchange (USPX) guidelines, the median CEO compensation for S&P 500 corporations was $10.8 million in 2010. Since Hawkins’ pay was below that level, I would normally vote in favor of the pay plan. However, shows both CBIS and Calvert rejecting the pay package. shows UUA, Walden and Trillium also voting against the pay package, with only the Methodists voting in favor. I voted with the majority of these funds in rejecting the pay package.

With regard to directors, I joined all the above named funds in voting against David L. Calhoun. My policy is that if I am voting against the pay package I also vote against all members of the compensation committee, unless there are overriding considerations. Therefore, I also voted against Richard H. Anderson (Chair), Kendall J. Powell, Jean-Pierre Rosso and Jack W. Schuler. On all other items I voted as recommended by management.

1.1Director Richard H. AndersonAgainst
1.2Director David L. CalhounAgainst
1.3Elect Director Victor J. DzauFor
1.4Elect Director Omar IshrakFor
1.5Elect Director Shirley Ann JacksonFor
1.6Elect Director James T. LenehanFor
1.7Elect Director Denise M. O’LearyFor
1.8Elect Director Kendall J. PowellAgainst
1.9Elect Director Robert C. PozenFor
1.10Elect Director Jean-Pierre RossoAgainst
1.11Elect Director Jack W. SchulerAgainst
2Ratify AuditorsFor
3Advisory Vote to Ratify Named Executive Officers’ CompensationAgainst
4Advisory Vote on Say on Pay FrequencyOne Year

Brett Davidson, another member of the USPX who contributed to writing the USPX guidelines for say-on-pay voting, recently wrote an article, Test Driving the USPX Guidelines on Say-on-Pay, applying them to the 36 corporations that failed their say-on-pay votes this proxy season. Like me, Davidson also experiments with how the guidelines might be extended to apply to small and medium sized companies. Also check out Investletter: Where investment advice meets main street. Davidson’s newsletter aims to help you build wealth by taking advantage of Wall Street’s inefficiencies.

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