Amazon.com, Inc. ($AMZN) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/23/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 5/16/2013. I voted with management 64% of the time. View Proxy Statement (high tech AMZN but no hyperlinked index). 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.
AMZN’s Summary Compensation Table (page 18) shows Jeffrey A. Wilke, Senior VP, was the highest paid named executive officer (NEO) at about $17.7M in 2012. I’m using Yahoo! Finance to determine market cap ($121B) and Wikipedia’s rule of thumb regarding classification. CMG is barely into the large-cap company category. 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.
AMZN’s pay is substantially above median, even if we factor inflation. Therefore, I would have voted against it if given the chance. I’m not sure why the pay package isn’t on the proxy. They must not be on an annual schedule. I withheld my vote from Gordon as chair of the compensation committee, Gorelick because he only owns 4 shares of Amazon stock and Ryder because of his lack of independence, having been an employee of Amazon.
I voted in favor of Investor Voice’s shareowner proposal to seek a political disclosure report on corporate spending on political activities. I want to be sure political expenditures serve our Company and shareowners, not pet projects of management or the board.
How I voted (CorpGov) below:
| # | PROP TEXT | MGMT | CalPERS | CorpGov | Calvert | Domini | CBIS |
|---|---|---|---|---|---|---|---|
| 1a | Jeffrey P. Bezos | For | For | For | Against | Against | Against |
| 1b | Tom A. Alberg | For | For | For | Against | For | Against |
| 1c | John Seely Brown | For | For | For | Against | For | Against |
| 1d | William B. Gordon | For | For | Withhold | Against | For | Against |
| 1e | Jamie S. Gorelick | For | For | Withhold | Against | For | Against |
| 1f | Alain Monie | For | For | For | Against | For | Against |
| 1g | Jonathan J. Rubinstein | For | For | For | Against | For | Against |
| 1h | Thomas O. Ryder | For | Withhold | Withhold | Against | For | Against |
| 1i | Patricia Q. Stonesifer | For | For | For | Against | For | Against |
| 2 | Ratify Auditors | For | For | For | For | For | For |
| 3 | Report on Political Contributions | Against | For | For | For | For | For |
Proposals of shareholders to be considered for inclusion in the Proxy Statement and proxy card for the 2014 Annual Meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 must be submitted in writing to the Secretary of Amazon.com, Amazon.com, Inc., 410 Terry Avenue North, Seattle, WA 98109, and must be received by 6:00 p.m. Pacific Time on Friday, December 13, 2013. The submission of a shareholder proposal does not guarantee that it will be included in our Proxy Statement.
Looking at SharkRepellent.net, I see at AMZN no action can be taken without a meeting by written consent. Special meetings can only be called by shareholders holding not less than 30% of the voting power.
Amazon.com Inc.’s ISS Governance QuickScore as of May 1, 2013 is 5. The pillar scores are Audit: 1; Board: 4; Shareholder Rights: 1; Compensation: 8. 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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