Heidi Soumerai’s Remarks at EMC Annual Meeting

EMCHere’s an example of classy questioning at an AGM.  Thanks to Ms. Soumerai for allowing me to reprint here.

Good morning Mr. Tucci, members of the board, and fellow shareholders.

My name is Heidi Soumerai and I am the Director of ESG Research at Walden Asset Management, a division of Boston Trust & Investment Management Company where I also serve as Managing Director. Together, we hold approximately 1.6 million shares of EMC.

As has been our tradition for the past several years, we wish to take a moment to commend EMC for its strong leadership, disclosure, and performance on environmental and social issues that we believe are important to EMC’s long term prosperity, and share with our fellow shareholders some of the outstanding accomplishments of EMC’s CSR program. As examples:

  • EMC has best in class goals for greenhouse gas emissions. Our company is striving to achieve an absolute emissions reduction of at least 80 percent by 2050 in accordance with the Intergovernmental Panel on Climate Change’s (IPCC) recommendation. EMC is one of the first of a growing number of companies to explicitly reference climate change science in its rationale for these goals.
  • EMC has frequently been featured on top employer lists by “Great Place to Work Institute.” So far in 2014 EMC has been designated as a top employer in the Netherlands, Sweden, France, Italy, Mexico, and Portugal, to name a few. This bodes well for the company’s ability to attract and retain top talent.
  • EMC extends its leadership by encouraging its suppliers to adopt sustainability practices and begin sustainability reporting. Further, the company is recommending that supplier reports use the GRI reporting framework—considered to be the “gold standard of reporting”

These are just a few of the many points we could highlight which we believe advances long term shareowner value, and we commend you for this strong performance.


I turn now to an item of significant concern for many investors. This year EMC sued an individual shareholder, James McRitchie, along with John Chevedden, in an attempt to exclude a resolution calling for an independent board chairman, even though most corporate governance experts believe this is a best practice board structure. We are pleased that the resolution ultimately appeared in the proxy and was voted on today.

We understand that EMC believed the resolution text included inaccurate statements and first appealed to the Securities and Exchange Commission (SEC) to exclude the resolution from the proxy. The SEC disagreed with EMC’s arguments. Displeased with that decision, EMC then took the extraordinary step to sue this investor but was unsuccessful in the case heard by the U.S. District Court in Massachusetts.

We are alarmed by the use of such enormous firepower to thwart a shareholder’s right to raise a legitimate corporate governance matter via the proxy process. In fact, we note that ISS, one of the leading independent proxy advisory firms, recommended supporting the resolution [which as we learned earlier won the support of about 38 percent of shares voted].

NorthStar Asset Management and Walden Asset Management joined 18 other investors in an open letter to EMC and three other companies that used this relatively new tactic of suing a shareholder who filed a resolution they didn’t like. These investors believe such actions are excessively heavy-handed and an inappropriate use of corporate funds. We wonder how many hundreds of thousands of dollars were deployed for legal expertise, as well as hours squandered by staff.

Going to court over a shareholder resolution does not strike us as a smart business decision and we believe this extreme action risked tarnishing EMC’s good reputation. Indeed, EMC may have legitimate disagreements with some of the content in Chevedden’s proposal. Therefore, when the SEC did not agree with the EMC’s arguments to exclude the resolution, the company should, and did, take its case to shareholders in its Statement of Opposition in the proxy.

Does Walden, or others such as the Connecticut State Pension Funds and NorthStar Asset Management, who have been in dialogue with EMC for many years, face the prospect of being sued if we file a resolution with which management and the board disagrees?

We hope this experience convinced our Board and management to abandon the prospect of future lawsuits against shareholders under similar circumstances.

Thank you for listening. We look forward to your response.


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