EMC Corporation (EMC) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/1/2012. Voting ends 4/30 on Moxy Vote’s proxy voting platform, which listed six “good causes,” including two consolidations, when I checked and voted on 4/27. ProxyDemocracy.org had three funds voting.
I make it a practice to vote against pay packages where NEOs were paid above median in the previous year. Yes, I know, this is pretty crude analysis. I’ll make exceptions where something obviously warrants different treatment. However, I’m concerned that NEOs are taking a greater and greater portion of wealth generated by companies.
According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay. Oxford Review of Economic Policy, Vol. 21, Issue 2, pp. 283-303, 2005), the aggregate compensation paid by public companies to their top-five executives during the period 1993-2003 totaled about $350 billion, and the ratio of this aggregate top-five compensation to the aggregate earnings of these firms increased from 5 percent in 1993-1995 to about 10 percent in 2001-2003.
At the same time, few firms want to admit to having average executives, so they seek to compensate their executives at above-average levels. They survey executive compensation at corporations and then set compensation packages that are above average for their “peer group,” which is often chosen aspirationally. While the Lake Woebegone effect may be nice in fictional towns, “where all the children are above average,” it doesn’t work well for society to have all CEOs considered above average and their collective pay spiraling out of control.
EMC’s SummaryCompensation Table shows that Joseph M. Tucci, our Chairman and CEO was the highest paid named executive officer (NEO) at over $13M in 2011. I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, EMC is a large-cap. According to the United States Proxy Exchange (USPX) guidelines (pages 9&10) using data from Equilar, the median CEO compensation for large-cap corporations was $10.8 million in 2010, so Tucci’s pay is above that median. I voted to against the executive compensation and members of the compensation committee (Windle B. Priem, Michael W. Brown, Randolph L. Cowen, and David N. Strohm).
I also voted against Joseph M. Tucci and Paul Sagan because all three funds listing on easy to read ProxyDemocracy.org voted against them as well.
There were no shareowner proposals. For all other matters, I voted as recommended by management.
Here’s the deadline for proposals by shareowners for next year. Mark your calendar:
To be eligible for inclusion in EMC’s Proxy Statement for the 2013 Annual Meeting of Shareholders, shareholder proposals submitted under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) must be received at EMC’s principal executive offices no later than November 21, 2012. Shareholder proposals should be addressed to: EMC Corporation, 176 South Street, Hopkinton, MA 01748, Attn: Paul T. Dacier, Executive Vice President, General Counsel and Assistant Secretary, facsimile number: (508) 497-8079.
Here’s how I voted on Moxy Vote’s proxy voting platform:
|ELECTION OF DIRECTOR: MICHAEL W. BROWN|
|ELECTION OF DIRECTOR: RANDOLPH L. COWEN|
|ELECTION OF DIRECTOR: GAIL DEEGAN|
|ELECTION OF DIRECTOR: JAMES S. DISTASIO|
|ELECTION OF DIRECTOR: JOHN R. EGAN|
|ELECTION OF DIRECTOR: EDMUND F. KELLY|
|ELECTION OF DIRECTOR: WINDLE B. PRIEM|
|ELECTION OF DIRECTOR: PAUL SAGAN|
|ELECTION OF DIRECTOR: DAVID N. STROHM|
|ELECTION OF DIRECTOR: JOSEPH M. TUCCI|
|RATIFICATION OF THE SELECTION BY THE AUDIT COMMITTEE OF PRICEWATERHOUSECOOPERS LLP AS EMC S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2012, AS DESCRIBED IN EMC S PROXY STATEMENT.|
|ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION, AS DESCRIBED IN EMC S PROXY STATEMENT.|