EMC Corp (EMC): How I Voted – Proxy Score 53%

EMC Corp ($EMC) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/1/2013. ProxyDemocracy.org had collected the votes of seven funds when I checked on 4/30/2013.  I voted with management 53% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime)

I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003.

Few firms admit to having average executives. They generally set compensation at 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, with 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.

EMC’s Summary Compensation Table shows CEO/Chairman Joseph M. Tucci was the highest paid named executive officer (NEO) at about $16.6M in 2012. I’m using Yahoo! Finance to determine market cap ($47B) and Wikipedia’s rule of thumb regarding classification. EMC 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 large-cap corporations was $10.8 million in 2010.

Factoring inflationEMC’s pay is well above median. Therefore, I voted against the compensation plan, omnibus stock plan and all the directors on the compensation committee: Windle B. Priem, Chair, Michael W. Brown, Randolph L. Cowen, and David N. Strohm. I also voted against John R. Egan because I don’t believe he can serve on five boards and devote enough time to each. I voted to ratify the auditors, the employee stock purchase plan, the right to act by written consent (I had filed a proposal on this at a lower level). I also voted in favor of NorthStar Asset Management’s proposal to report on electioneering or political contribution expenditures, identifying any contributions that raised an issue of incongruency with corporate values, and stating the justification for any such exceptions.

How I voted (in parentheses) below:


1aElect Director Michael W. Brown4 – 3 (Against)
1bElect Director Randolph L. Cowen4 – 3 (Against)
1cElect Director Gail Deegan4 – 3 (For)
1dElect Director James S. DiStasio4 – 3 (For)
1eElect Director John R. Egan2 – 5 (Against)
1fElect Director Edmund F. Kelly4 – 3 (For)
1gElect Director Jami Miscik4 – 3 (For)
1hElect Director Windle B. Priem3 – 4 (Against)
1iElect Director Paul Sagan4 – 3 (For)
1jElect Director David N. Strohm4 – 3 (Against)
1kElect Director Joseph M. Tucci1 – 6 (For)
2Ratify Auditors5 – 2 (For)
3Advisory Vote to Ratify Named Executive Officers’ Compensation5 – 2 (Against)
4Amend Omnibus Stock Plan2 – 5 (Against)
5Amend Qualified Employee Stock Purchase Plan7 – 0 (For)
6Provide Right to Act by Written Consent7 – 0 (For)
7Consistency with Corporate Values and Report on Political Contributions4 – 3 (For)

Mark your calendar:

To be eligible for inclusion in EMC’s Proxy Statement for the 2014 Annual Meeting of Shareholders, shareholder proposals submitted under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) must be received at EMC’s principal executive offices no later than November 21, 2013. Shareholder proposals should be addressed to: EMC Corporation, 176 South Street, Hopkinton, MA 01748, Attn:  Paul T. Dacier, Executive Vice President, General Counsel and Assistant Secretary, facsimile number: (508) 497‑8079.

 Looking at SharkRepellent.net, I see special meetings can only be called by shareholders holding not less than 25% of the voting power.

EMC Corporation’s ISS Governance QuickScore as of Apr 1, 2013 is 1. The pillar scores are Audit: 1; Board: 6; Shareholder Rights: 2; Compensation: 3. Brought to you by Institutional Shareholder Services (ISS). Scores range from “1” (low governance risk) to “10” (higher governance risk). Each of the pillar scores for Audit, Board, Shareholder Rights and Compensation, are based on specific company disclosure.

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