How I Voted: Kimberly Clark (KMB) – Score 64%

Kimberly Clark ($KMB) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/2/2013. had collected the votes of five funds when I checked on 4/26/2013. I voted with management 64% 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.

KMB’s Summary Compensation Table shows CEO/Chair Thomas J. Falk was the highest paid named executive officer (NEO) at about $13.7M in 2012. I’m using Yahoo! Finance to determine market cap ($39.7B) and Wikipedia’s rule of thumb regarding classification. KMB 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 inflationKMB’s pay is above median. I voted against the compensation plan and all the directors on the Compensation Committee: Abelardo E. Bru, Chairman, Fabian T. Garcia, Mae C. Jemison, M.D., and Marc J. Shapiro. I’m also concerned that six members of the board have served for 11 years or longer and the CEO/Chair positions are not split.

How I voted (CorpGov) below:

1.1John R. AlmForForForForForFor
1.2John F. BergstromForForAgainstAgainstForFor
1.3Abelardo E. BruAgainstForForForForFor
1.4Robert W. DecherdForForForAgainstAgainstFor
1.5Thomas J. FalkForForForAgainstAgainstFor
1.6Fabian T. GarciaAgainstForForForForFor
1.7Mae C. JemisonAgainstForForAgainstForFor
1.8James M. JennessForForForForForFor
1.9Nancy J. KarchForForAgainstForForAgainst
1.10Ian C. ReadForForForForForFor
1.11Linda Johnson RiceForForForAgainstForFor
1.12Marc J. ShapiroAgainstForForAgainstForFor
2Ratify AuditorsForAgainstForAgainstForFor
3Ratify NEO CompensationForForForForAgainstFor

Mark your calendar:

Proposals by stockholders for inclusion in our proxy statement and form of proxy for the Annual Meeting of Stockholders to be held in 2014 should be addressed to the Corporate Secretary, Kimberly-Clark Corporation, P.O. Box 619100, Dallas, Texas 75261-9100, and must be received at this address no later than November 14, 2013. Upon receipt of a proposal, we will determine whether or not to include the proposal in the proxy statement and form of proxy in accordance with applicable law. It is suggested that proposals be forwarded by certified mail, return receipt requested.

  Looking at; No action can be taken without a meeting by written consent. Special meetings can only be called by shareholders holding not less than 25% of the voting power.

Kimberly-Clark Corporation’s ISS Governance QuickScore as of Apr 1, 2013 is 2. The pillar scores are Audit: 1; Board: 2; Shareholder Rights: 4; Compensation: 2. 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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