3D Systems Corporation ($DDD) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/21/2013. ProxyDemocracy.org had collected the votes of two funds when I checked on 5/13/2013. I voted with management 90% 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.
DDD’s Summary Compensation Table shows Abraham N. Reichental, CEO was the highest paid named executive officer (NEO) at about $6.9M in 2012. I’m using Yahoo! Finance to determine market cap ($4.3B) and Wikipedia’s rule of thumb regarding classification. DDD is a mid-cap company. According to the United States Proxy Exchange (USPX) guidelines (pages 9 & 10), using data from Equilar, the median CEO compensation at mid-cap corporations was $4.3 million in 2010.
How I voted (CorpGov) below:
| # | PROPOSAL TEXT | CorpGov | CalSTRS | CBIS |
|---|---|---|---|---|
| 1.1 | Elect Director William E. Curran | For | For | Withhold |
| 1.2 | Elect Director Charles W. Hull | For | For | Withhold |
| 1.3 | Elect Director Jim D. Kever | For | For | Withhold |
| 1.4 | Elect Director G.w. Loewenbaum, II | For | For | Withhold |
| 1.5 | Elect Director Kevin S. Moore | For | For | Withhold |
| 1.6 | Elect Director Abraham N. Reichental | For | For | Withhold |
| 1.7 | Elect Director Daniel S. Van Riper | For | For | Withhold |
| 1.8 | Elect Director Karen E. Welke | For | For | Withhold |
| 2 | Increase Authorized Common Stock | Against | Against | For |
| 3 | Ratify Auditors | For | For | For |
Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended, certain stockholder proposals may be eligible for inclusion in our 2013 Proxy Statement and form of proxy. The date by which we must receive stockholder proposals to be considered for inclusion in the Proxy Statement and form of proxy for the 2014 Annual Meeting of Stockholders is December 2, 2013 or (if the date of our 2014 Annual Meeting is changed by more than 30 days from May 21, 2014) a reasonable time before we begin to print and mail the proxy materials for the 2014 Annual Meeting.
Looking at SharkRepellent.net, I see DDD uses a plurality vote standard to elect directors with no resignation policy. Special meetings can only be called by shareholders holding not less than 50.1% of the voting power.
3D Systems Corp.’s ISS Governance QuickScore as of May 1, 2013 is 2. The pillar scores are Audit: 1; Board: 5; Shareholder Rights: 2; Compensation: 4. 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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