EW Scripps (SSP): How I Voted

E.W. Scripps (SSP) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/2/2012. Voting ends 5/1 on Moxy Vote’s proxy voting platform, which listed three “good causes,” including two consolidations, when I checked and voted on 4/30. ProxyDemocracy.org had only one fund 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.

SSP’s SummaryCompensation Table (page 29) shows that Richard A. Boehne, CEO was the highest paid named executive officer (NEO) at about $2.5M in 2011. I’m using Yahoo! Finance to determine market cap and  Wikipedia’s rule of thumb regarding classification. According to those sources, SSP is a small-cap. According to the United States Proxy Exchange (USPX) guidelines (pages 9&10) using data from Equilar, the median CEO compensation for small-cap corporations was $2.2 million in 2010, so SSP’s pay is above that median.  I voted against the pay package and against amending the stock plan to provide bonuses. I also voted against any of the members of the compensation committee (Roger L. Ogden, John H. Burlingame and Kim Williams) whose names appear on the proxy. Since they are not all on the proxy, I assume SSP has a classified board… an entrenchment device.

Because the company has a classified board and because both Calvert, as reported by MoxyVote and CBIS, as reported by ProxyDemocracy, both withheld votes from all three board members up for election, I did as well. I say I voted to against the pay package by Moxy Vote’s proxy voting platform does not include proxy item 2, say-on-pay.

According to the proxy:

Approval of this Proposal requires the affirmative vote of a majority of the votes cast in person or by proxy of the Common Voting Shares represented and entitled to vote at the meeting. The Board of Directors recommends that holders of such shares vote FOR the approval of Proposal 2. It is expected that the Common Voting Shares owned by The Edward W. Scripps Trust will be voted in favor of Proposal 2, thus assuring approval thereof. Proxies for Common Voting Shares solicited by the board will be voted FOR Proposal 2 unless shareholders specify a contrary choice in their proxies. Broker non-votes will not be treated as votes cast and will not have a positive or negative effect on the outcome of Proposal 2. Abstentions will be treated as votes cast and, consequently, will have the same effect as votes against Proposal 2.

That’s an explanation I can’t quite decipher. Is this another one of those situations where shareowners using a Voter Information Form (VIF), because they hold shares in street name, are disenfranchised? That’s the only explanation I can come up with right now.

Here’s the deadline for proposals by shareowners for next year:

Any shareholder proposals intended to be presented at the Company’s 2013 Annual Meeting of Shareholders must be received by the Company at 312 Walnut Street, Suite 2800, Cincinnati, Ohio, 45202, on or before November 29, 2012, and must otherwise comply with the SEC’s rules, to be considered for inclusion in our proxy materials relating to at the Company’s 2013 annual meeting. Such proposals should be submitted by certified mail, return receipt requested.

And here’s how I actually voted, using Moxy Vote’s proxy voting platform.

	ROGER L. OGDEN	Withhold
	J. MARVIN QUIN	Withhold
	KIM WILLIAMS	Withhold