IMAX: How I Voted – Proxy Score 25

IMAX ($IMAX) is one of the stocks in my portfolio. Their annual meeting is coming up on 6/5/2012. Voting ends 6/4 on Moxy Vote’s proxy voting platform, which had 0 recommendations “from good causes” when I checked and voted on 5/31/2012. ProxyDemocracy.org had 2 funds voting.  I voted with management 25% 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.

Few firms want to admit to having average executives. 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. We need to slow the pace of money going to the 1% if our economy is not to become third-world.

IMAX’s SummaryCompensation Table (p. 28) shows Richard L. Gelfond, CEO/Chair, was the highest paid named executive officer (NEO) at about $5.5M 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 $1.4B IMAX is a small-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 $2.2 million in 2010, so IMAX’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: Garth M. Girvan (Chairman), Neil S. Braun, and David W. Leebron. Unfortunately, with a classified board, I was denied the opportunity to vote against them all.  I voted the same as CalSTRS.

Mark your calendars; here’s the deadline for proposals by shareowners for next year:

If a shareholder wishes to propose any matter for a vote by the Company’s shareholders at the Company’s 2013 annual meeting of shareholders he or she must send his or her proposal to the Corporate Headquarters of the Company at IMAX Corporation, 2525 Speakman Drive, Mississauga, Ontario, Canada, L5K 1B1, Attention: Corporate Secretary.

Here’s how I actually voted on Moxy Vote’s proxy voting platform but showing ProxyDemocracy.org‘s display, which is a little tighter.

NUM. PROXY ITEM CorpGov.net
1.1 Elect Director Neil S. Braun Withhold
1.2 Elect Director Garth M. Girvan Withhold
1.3 Elect Director David W. Leebron Withhold
2 Approve PricewaterhouseCoopers LLP as Auditors and Authorize Board to Fix Their Remuneration For

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