DaVita ($DVA) is one of the stocks in my portfolio. Their annual meeting is coming up on 6/11/2012. Voting ends 6/8 at 5 am ET on Moxy Vote’s proxy voting platform (early because of the weekend), which had 3 recommendations “from good causes” when I checked and voted on 6/6/2012. However, two were consolidations, so they really only had recommendations from Calvert. ProxyDemocracy.org had information on 4 funds voting. I voted with management 54% of the time.
I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions where something obviously warrants different treatment. 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), aggregate compensation by public companies to NEO increased from 5 percent in 1993-1995 to about 10 percent in 2001-2003.
DVA’s SummaryCompensation Table shows Kent J. Thiry, CEO/Chair, was the highest paid named executive officer (NEO) at over $17.5M in 2011. I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, at about $8B DVA is a mid-cap company. According to the United States Proxy Exchange (USPX) guidelines (pages 9&10), using data from Equilar, the median CEO compensation at small-cap corporations was $4.3 million in 2010, so DVA’s pay is well above that median.
On that basis, I voted against the pay plan and would have voted against the compensation committee members: John M. Nehra (Chairman, Peter T. Grauer, and Roger J. Valine. CalSTRS did as well, so I’m in good company. However, I also voted against the omnibus stock plan, fearing much will go again to Nehra, instead of to the ESOP. Calvert, AFSCME and CBIS aso voted against the plan but CalSTRS voted in favor of it.
I also joined with the same three funds, voting in favor of my own proposal that senior executives retain a significant percentage of stock acquired through equity pay programs until one-year following the termination of their employment and to report to shareholders regarding this policy before our next annual shareholder meeting. Adopting such a practice would focus on the long-term.
Mark your calendars; here’s the deadline for proposals by shareowners for next year:
If you wish to present a proposal for action at the 2013 annual meeting of stockholders and wish to have it included in the proxy statement and form of proxy that management will prepare, you must notify us no later than January 2, 2013 in the form required under the rules and regulations promulgated by the SEC. Otherwise, your proposal will not be included in management’s proxy materials.
Here’s how I actually voted using Moxy Vote’s proxy voting platform. I included how all announced funds voted, as displayed at ProxyDemocracy.org. What do you think?
| NUM. | PROPOSAL TEXT | CorpGov.net | CALVERT SOCIAL INDEX | AFSCME | CBIS | CALSTRS |
|---|---|---|---|---|---|---|
| 1 | Elect Director Pamela M. Arway | For | For | For | For | For |
| 2 | Elect Director Charles G. Berg | For | For | For | For | For |
| 3 | Elect Director Carol Anthony (John) Davidson | For | For | For | For | For |
| 4 | Elect Director Paul J. Diaz | For | For | For | For | For |
| 5 | Elect Director Peter T. Grauer | Against | For | Against | For | Against |
| 6 | Elect Director John M. Nehra | Against | For | Against | For | Against |
| 7 | Elect Director William L. Roper | For | For | Against | For | For |
| 8 | Elect Director Kent J. Thiry | For | For | Against | For | For |
| 9 | Elect Director Roger J. Valine | Against | For | For | For | Against |
| 10 | Ratify Auditors | For | For | Against | Against | For |
| 11 | Advisory Vote to Ratify Named Executive Officers’ Compensation | Against | Against | Against | For | Against |
| 12 | Amend Omnibus Stock Plan | Against | Against | Against | Against | For |
| 13 | Stock Retention/Holding Period | For | For | For | For | Against |
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