Google ($GOOG) is one of the stocks in my portfolio. Their annual meeting is coming up on 6/21/2012. Voting ends 6/20 on Moxy Vote’s proxy voting platform, which had 9 recommendations “from good causes,” including 3 consolidations, when I checked and voted on 6/17/2012. ProxyDemocracy.org had information on 5 funds voting. I voted with management 42% 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.
GOOG’s SummaryCompensation Table shows Eric E. Schmidt, Chair, was the highest paid named executive officer (NEO) at over $100M in 2011 (sorry, but that seems a tad high, even considering his transition). I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, at about $189B GOOG is a large-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 $10.8 million in 2010, so GOOG’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: L. John Doerr and Paul S. Otellini. I also voted against authorizing a new class of common stock, increasing the amount of authorized stock and against the omnibus stock plan.
With regard to shareowner proposals, I voted in favor of North Star’s say on political contributions proposal. Frankly, Julie Goodridge, NorthStar’s CEO makes compelling arguments. According to Google, Google NetPAC was
created… to support federal officeholders and candidates who share Google’s goal of promoting the Internet as a free and open platform for communication and innovation… An Advisory Committee of Googlers…assists the PAC in carrying out its mission.
On Google’s website, they state:
We base our giving decisions … most importantly – [on the] the policy stances of Members of Congress. We support candidates who have demonstrated a commitment to Google’s public policy agenda, centered on policies to promote the continued openness and growth of the Internet.
Yet according to NorthStar, despite Google’s very public opposition to the Stop Online Piracy Act (SOPA), Google NetPAC contributed to the campaigns of 7 of the 12 original co-sponsors of SOPA including lead sponsor, Lamar Smith.
Discrepancies concerning Google’s core business cause us to wonder if management’s attention has wandered and what else management is failing to notice,
said NorthStar’s Investment Analyst, Christine Jantz. These disparities between statements and actions should cause concern. Google will have to win back my trust. One way of doing that would be to allow shareowners to vote on such contributions.
Google’s political action committee has historically violated Google’s own publicly stated values. At least 40% of donations from NETPAC in the past three years have been given to politicians that have actively worked against Google’s corporate values. Since Google’s profits are based on customer confidence and brand loyalty, these contributions are not in the best interest of shareholders. I am concerned that these misaligned decisions will continue and diminish shareholder value unless we implement stakeholder oversight,
stated NorthStar CEO Julie Goodridge. NorthStar goes into more detail in a recent SEC filing in which the firm directly compares Google’s policies against a selection of what it calls the most “egregious contributions, pointing to a gift to Eric Cantor, one of the co-sponsors of the Marriage Protection amendment which would make gay marriage unconstitutional. NorthStar also notes Google’s progressive stance on environmental protection, but then shows numerous gifts to politicians that voted to restrict the EPA’s regulatory abilities, voted against renewable energy incentives, and opened offshore drilling opportunities.
I voted against Mark Shaevsky’s proposal to force mandatory arbitration. While the idea may warrant consideration, a binding bylaw proposal isn’t the way to go about it.
I voted in favor of John Chevedden’s proposal to move to equal voting for all shares. Unequal voting for different classes of shares is about as unfair as unequal voting weights for citizens in democratic elections… it defeats the purpose of elections. Grow up Google; trust your shareowners. Don’t do evil.
Checking with SharkRepellent.net, I see they have plurality voting for directors, so a majority vote proposal would be appropriate as would a proposal to allow changes by written consent, lowering the special meeting threshold to 10% or eliminating supermajority requirements. Mark your calendars; here’s the deadline for proposals by shareowners for next year:
Any Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to Google’s Corporate Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 2013 Annual Meeting of Stockholders, the Corporate Secretary of Google must receive the written proposal at our principal executive offices no later than January 9, 2013; provided, however, that in the event that we hold our 2013 Annual Meeting of Stockholders more than 30 days before or after the one-year anniversary date of the 2012 Annual Meeting, we will disclose the new deadline by which stockholders proposals must be received under Item 5 of Part II of our earliest possible Quarterly Report on Form 10-Q or, if impracticable, by any means reasonably determined to inform stockholders. In addition, stockholder proposals must otherwise comply with the requirements of Rule 14a-8 under the Exchange Act. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to: Google Inc., Attn: Corporate Secretary, 1600 Amphitheatre Parkway, Mountain View, California 94043. Fax: (650) 618-1806. Email: firstname.lastname@example.org.
|1.3||Eric E. Schmidt||For||Withhold||Withhold||For||For|
|1.4||L. John Doerr||Withhold||Withhold||For||For||For|
|1.5||Diane B. Greene||For||For||For||For||For|
|1.6||John L. Hennessy||For||For||For||For||For|
|1.7||Director Ann Mather||For||Withhold||For||Withhold||For|
|1.8||Paul S. Otellini||Withhold||For||Withhold||For||For|
|1.9||K. Ram Shriram||For||Withhold||For||For||For|
|1.10||Shirley M. Tilghman||For||For||For||For||For|
|3||Authorize New Class of Common Stock||Against||Against||Against||Against||Against|
|4||Increase Authorized Common Stock||Against||Against||Against||Against||Against|
|5||Approve Conversion of Securities||For||For||For||For||For|
|6||Approve Omnibus Stock Plan||Against||Against||Against||Against||Against|
|7||Approve Omnibus Stock Plan||Against||Against||Against||Against||Against|
|8||Reporting on Political Contributions||For||Against||For||For||For|
|9||Arbitration of Shareholder Lawsuits||Against||Against||Against||Against||Against|
|10||Adopt One-Vote Per Share||For||For||For||For||For|