Proctor & Gamble (PG) is one of the stocks in my portfolio. Their annual meeting is coming up on October 11. I voted yesterday using the MoxyVote.com platform. Today is the last day to use it. Tomorrow, you’ll have to use ProxyVote.com. MoxyVote.com had recommendations from 13 “good causes,” which included several consolidations. ProxyDemocracy.org had recommendations from 5 participating funds families.
When it comes to PG, the problem appears to be how to integrate and present the recommendations. Both sites could do a better job in that department, although I do like Moxy’s “Advocate Consensus,” which “represents an overarching opinion of all Advocates on the site.” At least you can see advice from more than one group on a single page but you can’t tell who voted for what without laboriously flipping pages.
Looking at PG’s proxy, the Summary Compensation Table shows that Robert A. McDonald, the combined CEO/Chairman, was the highest paid named executive officer (NEO) at a little over $16 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 McDonald’s pay was over that level, I’m voting against the pay plan, item #13. Yes, PG did better than many stocks in my portfolio, but $16 million is excessive. We’ll never ratchet down the Lake Woebegone effect unless we bring the averages down.
Robin Ferracone predicts More Shareholders Planning to Vote No on Pay in 2012, Compliance Week, 10/5/2011. Institutional investors won’t be giving companies a pass like they did in year one. Add a volatile stock market and declining performance to the mix and we should see a lot more failed votes.
Who do I blame for such excess? The compensation committee of course! I’m voting against all of them: McNerney, Chenault, Cook, Whitman and Wilderotter. I see I’ve got company but few are as radical as I to vote against all five.
Like most who announced, I voted to ratify the auditors, the say on pay frequency, and to amend the articles of incorporation. Unlike many, I’m voting in favor of Evelyn Y. Davis’ cumulative voting proposal. This could be very important if we ever get proxy access. CalPERS and CalSTRS should be voting for this as well, since they are required to do so by law. Government Code § 6900 provides in relevant part:
Whenever any governmental body is a shareholder of any corporation, and a resolution is before the shareholders which will permit or authorize cumulative voting for directors, such governmental body shall vote its shares to permit or authorize cumulative voting.
As for phasing out the use of animal testing, sorry PETA, I think the resolution goes just a little too far. I voted in favor of Northstar Asset Management’s proposal for PG to disclose political contributions and subject them to an advisory vote. See their publication Fiduciary Responsibility in Corporate Political Spending: Why Shareholders Must Vote on Political Spending. Here’s a small portion:
We believe that there is a need to hold companies accountable for all aspects of their public actions. Incongruities in their public actions – whether or not we have had successful prior shareholder engagements; whether the source of the contribution is from a Political Action Committee (PAC) or by the company – are inherently problematic.
We have a fiduciary duty to protect client assets. Shareholder value can be diminished by negative publicity associated with political giving that is incongruent with company values. When there is a pending shareholder resolution with an opportunity for an advisory vote seeking more accountability for corporate political spending, we need to evaluate management’s decisions and vote on political spending to avert potential loss of shareholder value at this time of heightened public scrutiny of corporate political involvement.
The Target Corporation debacle resoundingly demonstrated that shareholder value is at risk when contributions are made in violation of company values. As investment advisers and financial professionals, it is our fiduciary responsibility to weigh in and provide checks and balances on corporate political activities.
As far as I’m concerned, there isn’t much that is more important than getting corporate money out of politics, especially some of the contributions PG has made. Here’s how my votes lined up on MoxyVote.com.
|ELECTION OF DIRECTOR: ANGELA F. BRALY|
|ELECTION OF DIRECTOR: KENNETH I. CHENAULT|
|ELECTION OF DIRECTOR: SCOTT D. COOK|
|ELECTION OF DIRECTOR: SUSAN DESMOND-HELLMANN|
|ELECTION OF DIRECTOR: ROBERT A. MCDONALD|
|ELECTION OF DIRECTOR: W. JAMES MCNERNEY, JR.|
|ELECTION OF DIRECTOR: JOHNATHAN A. RODGERS|
|ELECTION OF DIRECTOR: MARGARET C. WHITMAN|
|ELECTION OF DIRECTOR: MARY AGNES WILDEROTTER|
|ELECTION OF DIRECTOR: PATRICIA A. WOERTZ|
|ELECTION OF DIRECTOR: ERNESTO ZEDILLO|
|RATIFY APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PAGE 65 OF PROXY STATEMENT)|
|ADVISORY VOTE TO APPROVE THE COMPANY S SAY ON PAY VOTE (PAGES 65-66 OF PROXY STATEMENT)|
|ADVISORY VOTE TO RECOMMEND THE FREQUENCY OF THE SAY ON PAY VOTE (PAGES 66-67 OF PROXY STATEMENT)|
|AMEND THE COMPANY S AMENDED ARTICLES OF INCORPORATION (PAGE 67 OF PROXY STATEMENT)|
|SHAREHOLDER PROPOSAL #1 – CUMULATIVE VOTING (PAGE 68 OF PROXY STATEMENT)|
|SHAREHOLDER PROPOSAL #2 – ANIMAL TESTING (PAGES 69-70 OF PROXY STATEMENT)|
|SHAREHOLDER PROPOSAL #3 – ELECTIONEERING CONTRIBUTIONS (PAGES 70-72 OF PROXY STATEMENT)|