Procter and Gamble $PG is one of the stocks in my portfolio. Their annual meeting is coming up on 10/8/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 10/1/2013. I voted with management 60% 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)
It stands to reason that CEOs at mega-cap companies would be paid, on average, more than those at mid-caps. However, more than 50% more seems unreasonable. That sense was reinforced by an observation by GMIRatings that PG does not appear to limit long-term CEO pay incentives to above-median performance against a peer group. For these reasons, I voted against the pay plan and against all members of the compensation committee, since they recommended the plan to the full board. Compensation committee members included:
- W. James McNerney, Jr., Chair
- Kenneth I. Chenault
- Scott D. Cook
- Margaret C. Whitman
- Mary Agnes Wilderotter
I am concerned that seven board members are CEOs. Can they really devote the time necessary to be good board members of PG? Another concern is that four of our directors have served for more than 10 years. Should they really be considered independent? Despite these concerns, they didn’t impact my vote.
With regard to other proposals:
- Ratify Auditor – I voted for this proposal and will vote against such ratification only in highly unusual circumstances.
- Reduce Supermajority Vote Requirements – At my recommendation, my wife submitted a proposal to request that our board take the steps necessary so that each shareholder voting requirement in our charter and bylaws that calls for a greater than simple majority vote be changed to require a majority of the votes cast for and against such proposals. The vote was 59% in favor, 41% opposed. Although the proxy says these recommended changes “are the result of the Board’s ongoing review of our corporate governance principles,” I think victory of our proposal last year has something to do with this item. Of course, I voted in favor of it.
- Approve Non-Employuee Director Omnibus Stock Plan – I voted in favor of the plan, which isn’t dilutive and helps align director interests with those of shareowners.
How I voted (CorpGov) below:
|1a||Elect Director Angela F. Braly||For||For||For||For|
|1b||Elect Director Kenneth I. Chenault||Against||For||Against||For|
|1c||Elect Director Scott D. Cook||Against||For||For||For|
|1d||Elect Director Susan Desmond-Hellmann||For||For||For||For|
|1e||Elect Director A.G. Lafley||For||For||Against||For|
|1f||Elect Director Terry J. Lundgren||For||For||Against||For|
|1g||Elect Director W. James McNerney, Jr.||Against||For||Against||For|
|1h||Elect Director Margaret C. Whitman||Against||For||Against||For|
|1i||Elect Director Mary Agnes Wilderotter||Against||For||Against||For|
|1j||Elect Director Patricia A. Woertz||For||For||For||For|
|1k||Elect Director Ernesto Zedillo||For||For||For||For|
|3||Reduce Supermajority Vote Requirement||For||For||For||For|
|4||Approve Non-Employee Director Omnibus Stock Plan||For||For||For||Against|
|5||Advisory Vote to Ratify Named Executive Officers’ Compensation||Against||For||Against||For|
Pursuant to regulations issued by the SEC, to be considered for inclusion in the Company’s proxy statement for presentation at that meeting, all shareholder proposals must be received by the Company on or before the close of business on April 25, 2014. Any such proposals should be sent to The Procter & Gamble Company, c/o Secretary, One Procter & Gamble Plaza, Cincinnati, OH 45202-3315.
Looking at SharkRepellent.net, I see written consent requires a unanimous vote (default Ohio state statute), an absurdly high threshold. Special meetings can only be called by shareholders holding not less than 25% of the voting power (default Ohio state statute). That would ideally be set at something more like 10%.
From Yahoo! Finance, Procter & Gamble Company’s ISS Governance QuickScore as of Sep 1, 2013 is 2. The pillar scores are Audit: 1; Board: 2; Shareholder Rights: 5; Compensation: 1. 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 disclosures.