Broadridge ($BR): How I Voted – Proxy Score 50%

Broadridge Financial Solutions, Inc. ($BR) is one of the stocks in my portfolio. Their annual meeting is coming up on 11/15/2012. ProxyDemocracy.org had collected the votes of two funds when I voted on 11/8/2012.  I voted with management 50% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes)

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.

BR’s SummaryCompensation Table shows CEO Richard J. Daly, was the highest paid named executive officer (NEO) at about $5.4M in fiscal 2012. I’m using Yahoo! Finance to determine market cap and Wikipedia’s rule of thumb regarding classification. According to those sources, at about $2.8B BR is a mi-cap company. According to the United States Proxy Exchange (USPX) guidelines (pages 9 & 10), using data from Equilar, the median CEO compensation at large-cap corporations was $4.3 million in 2010.

Allowing for inflation of 6.1%, that would bring adjusted median income up to almost $4.6M, so BR’s pay is substantially above that median. I realize CEO pay is increasing faster than inflation, but I’m trying to hold the line, since I think most have been overpaid for years. In the case of BR it isn’t at all close, so it makes sense to vote against the compensation plan. It is also my policy to vote against the members of the compensation committee when I vote against the compensation plan, since they are the ones recommending it. Therefore I voted against Alan J. Weber (Chairman), Sandra S. Jaffee, Stuart R. Levine, and Thomas J. Perna.

How I Voted; see below under CorpGov.net:

# PROPOSAL  CorpGov.net CALVERT  TRILLIUM
1a Leslie A. Brun For Against Against
1b Richard J. Daly For Against Against
1c Robert N. Duelks For Against Against
1d Richard J. Haviland For Against Against
1e Sandra S. Jaffee Against Against Against
1f Stuart R. Levine Against Against Against
1g Thomas J. Perna Against Against Against
1h Alan J. Weber Against Against Against
2 Ratify Auditors For For For
3 Ratify NEO Comp Against For Against

 

 Looking at SharekRepellent.net for possible corporate governance improvements for next year. I see the Board is authorized to increase or decrease the size of the board without shareholder approval. That seems like something that could potentially be abused. See my post, Cisco: How I Voted – Proxy Score 83%.

Other potential issues include: No action can be taken without a meeting by written consent. Shareholders cannot call special meetings.  Supermajority vote requirement (80%) to amend certain charter provisions. Note them on your calendar, here is the deadline for submission of proxy proposals for next year:

Under SEC rules, if a stockholder wants to include a proposal in our proxy statement and form of proxy for the Company’s 2013 annual meeting of stockholders, our Secretary must receive the proposal at our principal executive offices located at 1981 Marcus Avenue, Lake Success, New York 11042 no later than June 7, 2013. Any such proposal should comply with the requirements of Rule 14a-8 promulgated under the Exchange Act.

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