Berry Plastics Group $BERY is one of the stocks in my portfolio. Their annual meeting is coming up on 3/11/2014. ProxyDemocracy.org was back up and running and had collected the votes of one fund when I checked and voted on 3/5/2014. I voted with management 25% 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)
There is no opportunity to vote on pay at this small company (they apparently have something other than annual vote), so I won’t go into all the usual analysis.
The GMIAnalyst report I reviewed gave BERY an overall C. I wouldn’t be so generous. Although BERY has an outside board majority, the majority of the board is “related” mainly because of associations with other investors, the board is staggered, and the controlling shareholder holds 29% of the voting power.
Classified boards reduce accountability by allowing shareowners to only vote for board members every third year. Critical for me, the majority of the board doesn’t even hold shares in our company. They hold options for their board service but apparently do not see our company as an attractive enough investment to put some of their own money in as we have done.
This looks like an honorific board, not a board that is going to oversee our interests as investors. Civale missed at least a quarter of the meetings. Bayh sits on four boards. Our company doesn’t have any women on its board and a majority vote is not required to elect them. I joined with CBIS in voting against the incumbent directors up for reelection this year.
How I voted (CorpGov) below:
| # | PROPOSAL TEXT | CorpGov | CBIS |
|---|---|---|---|
| 1.1 | Elect Director B. Evan Bayh | Withhold | Withhold |
| 1.2 | Elect Director Anthony M. Civale | Withhold | Withhold |
| 1.3 | Elect Director Ronald S. Rolfe | Withhold | Withhold |
| 2 | Ratify Auditors | For | Against |
Mark your calendar:
Under the rules of the Securities and Exchange Commission, any of our stockholders wishing to have a proposal considered for inclusion in our 2015 proxy solicitation materials must set forth such proposal in writing and file it with our Corporate Secretary on or before the close of business on September 29, 2014.
Looking at SharkRepellent.net, as discussed above, directors are elected using a plurality standard and staggered terms, facilitating entrenchment. BERY has a plurality, rather than majority standard to elect directors. Additionally, no action can be taken without a meeting by written consent nor can shareowners call a special meeting.
From Yahoo! Finance, Berry Plastics Group, Inc.’s ISS Governance QuickScore as of Mar 1, 2014 is 7. The pillar scores are Audit: 1; Board: 10; Shareholder Rights: 5; 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 disclosures.
Comments are closed.