Broadridge Financial Solutions $BR is one of the stocks in my portfolio. Their annual meeting is coming up on 11/14/2013. ProxyDemocracy.org had collected the votes of one fund when I checked on 11/8/2013. I voted with management 92% 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. The rationale for peer group benchmarking is a mythological market for CEOs.
Richard J. Daly
BR’s Summary Compensation Table shows Richard J. Daly, CEO, was the highest paid named executive officer (NEO) at about $5.4M in 2013. I’m using Yahoo! Finance to determine market cap ($4.2B) and Wikipedia’s rule of thumb regarding classification. BR is a mid-cap company. According to Equilar, the median CEO compensation at large-cap corporations was $4.7 million in 2012.
The GMIAnalyst report I reviewed expressed some concerns that BR does not appear to limit long-term CEO pay incentives to above-median performance against a peer group and questions if unvested equity awards lapse when the CEO’s employment is terminated.
In conjunction with the 2013 Annual Meeting of Stockholders, BR is offering investors an online forum where they can access annual meeting materials, ask questions in advance of the meeting, and participate in a stockholder survey. I took the opportunity to ask the following and also did so at Sharegate.com:
- Reading the proxy I can’t tell; do unvested equity awards lapse if the CEO’s employment is terminated?
- Does Broadridge only pay long-term incentives to the CEO for above-median performance against a peer group?
- Has the board considered getting rid of Broadridge’s supermajority requirements or the lack of ability for shareowners to call a special meeting or act by written consent?
I wish BR’s online forum was more like Sharegate’s and provided the capability of shareowners to contact each other or at least allowed us to see the questions being raised.
To reach a greater number of shareowners, BR is offering a live webcast of the Annual Meeting at 10 A.M. Eastern Time on November 14, 2013. Once you have logged on and your credentials have been verified, you will be able to attend the meeting over the Internet, vote electronically and ask questions during the meeting. This is a good idea but I wish they would stop calling it a “virtual meeting,” since virtual implies there is no actual in-person meeting. Broadridge markets a virtual meeting service and should differentiate virtual-only or lock-out meetings from hybrid meetings, since many shareowners, such as those belonging to the Council of Institutional Investors oppose virtual meetings. See their policy:
4.7 Electronic Meetings: Companies should hold shareowner meetings by remote communication (so-called “virtual”meetings) only as a supplement to traditional in-person shareowner meetings, not as a substitute.
I joined with Calvert in voting against amending the stock plan because it is more than 10% dilutive. How I voted (CorpGov) below:
| # | PROPOSAL TEXT | CorpGov | CALVERT |
|---|---|---|---|
| 1a | Elect Director Leslie A. Brun | For | Against |
| 1b | Elect Director Richard J. Daly | For | Against |
| 1c | Elect Director Robert N. Duelks | For | Against |
| 1d | Elect Director Richard J. Haviland | For | Against |
| 1e | Elect Director Sandra S. Jaffee | For | Against |
| 1f | Elect Director Stuart R. Levine | For | Against |
| 1g | Elect Director Maura A. Markus | For | Against |
| 1h | Elect Director Thomas J. Perna | For | Against |
| 1i | Elect Director Alan J. Weber | For | Against |
| 2 | Ratify Auditors | For | For |
| 3 | Amend Omnibus Stock Plan | Against | Against |
| 4 | Say on Pay for NEOs | For | For |
Under SEC rules, if a stockholder wants to include a proposal in our proxy statement and form of proxy for the Company’s 2014 annual meeting of stockholders, our Secretary must receive the proposal at our principal executive offices located at 1981 Marcus Avenue, Lake Success, New York 11042 no later than June 6, 2014. Any such proposal should comply with the requirements of Rule 14a-8 promulgated under the Exchange Act.
Looking at SharkRepellent.net, I see that no action can be taken without a meeting by written consent. Shareholders cannot call special meetings. Broadridge also has a supermajority vote requirement (80%) to amend certain charter provisions.
From Yahoo! Finance, BR’s Broadridge Financial Solutions, Inc.’s ISS Governance QuickScore QuickScore as of Nov 1, 2013 is 1. The pillar scores are Audit: 1; Board: 2; Shareholder Rights: 4; 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.
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