Ford (FDMTP) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/10/2012. Voting ends 5/9 on Moxy Vote’s proxy voting platform, which listed three “good causes,” including two consolidations of only one vote, when I checked and voted on 5/7. ProxyDemocracy.org had two funds voting. Ford scores 67 out of 100, since I voted with management on only 67% of the proxy.
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.
Ford’s SummaryCompensation Table shows that Alan Mulally, CEO, was the highest paid named executive officer (NEO) at over $29.5M in 2011. I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, Ford 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 Ford’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 the members of the compensation committee (Richard A. Manoogian, Anthony F. Earley, Jr., Ellen R. Marram, and John L. Thornton).
I voted in favor of all the proxy proposals from shareowners Davis and the Cheveddens. Cumulative voting could help shareowners at least vote in a few directors of our own choosing. Eliminating the dual class share structure would put shareowners on a more equal footing with Ford family shares that now carry a weight of 16 times greater voting clout. The ability of shareoweners to call a special meeting is critical in case of emergency.
On other matters, I voted with management.
Here’s the deadline for proposals by shareowners for next year:
Unless the Board of Directors determines otherwise, next year’s annual meeting will be held on May 9, 2013. Any shareholder proposal intended for inclusion in the proxy materials for the 2013 annual meeting must be received by the Company’s Secretary no later than November 30, 2012, and can be sent via facsimile to 313-248-8713. Shareholder proposals submitted outside of the process described in Rule 14a-8 of the Securities Exchange Act of 1934, as amended, will not be considered at any annual meeting of shareholders. The Company will not include in the Notice of Annual Meeting proposals not in compliance with SEC Rule 14a-8 and, under the Company’s By-Laws, no business other than that stated in the notice of meeting can be transacted at the meeting.
And here’s how I actually voted, using Moxy Vote’s proxy voting platform.
|ELECTION OF DIRECTOR: STEPHEN G. BUTLER|
|ELECTION OF DIRECTOR: KIMBERLY A. CASIANO|
|ELECTION OF DIRECTOR: ANTHONY F. EARLEY, JR.|
|ELECTION OF DIRECTOR: EDSEL B. FORD II|
|ELECTION OF DIRECTOR: WILLIAM CLAY FORD, JR.|
|ELECTION OF DIRECTOR: RICHARD A. GEPHARDT|
|ELECTION OF DIRECTOR: JAMES H. HANCE, JR.|
|ELECTION OF DIRECTOR: WILLIAM W. HELMAN IV|
|ELECTION OF DIRECTOR: IRVINE O. HOCKADAY, JR.|
|ELECTION OF DIRECTOR: JON M. HUNTSMAN, JR.|
|ELECTION OF DIRECTOR: RICHARD A. MANOOGIAN|
|ELECTION OF DIRECTOR: ELLEN R. MARRAM|
|ELECTION OF DIRECTOR: ALAN MULALLY|
|ELECTION OF DIRECTOR: HOMER A. NEAL|
|ELECTION OF DIRECTOR: GERALD L. SHAHEEN|
|ELECTION OF DIRECTOR: JOHN L. THORNTON|
|RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.|
|SAY ON PAY – AN ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVES.|
|RELATING TO CUMULATIVE VOTING FOR THE ELECTION OF DIRECTORS.|
|RELATING TO CONSIDERATION OF A RECAPITALIZATION PLAN TO PROVIDE THAT ALL OF THE COMPANY S OUTSTANDING STOCK HAVE ONE VOTE PER SHARE.|
|RELATING TO ALLOWING HOLDERS OF 10% OF OUTSTANDING COMMON STOCK TO CALL SPECIAL MEETINGS OF SHAREHOLDERS.|