Symantec Corporation (NASD:SYMC), which provides security, backup, and availability solutions worldwide, is one of the stocks in my portfolio. Their annual meeting is coming up on 10/28/2014. ProxyDemocracy.org had collected the votes of three funds when I checked on 10/22/2014. I voted with management 55% of the time and assigned them a proxy score of 55. View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the Symantec 2014 proxy in order to enhance corporate governance and long-term value.
Symantec ISS Rating
From Yahoo! Finance: Symantec Corporation’s ISS Governance QuickScore as of Oct 1, 2014 is 2. The pillar scores are Audit: 1; Board: 4; Shareholder Rights: 2; Compensation: 3. 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. That gives us a quick idea of where to focus.
Symantec Summary Compensation Table shows the highest paid named executive officer (NEO) was former CEO Stephen M. Bennett, at about $13.1M. I’m using Yahoo! Finance to determine market cap ($16.2B) and Wikipedia’s rule of thumb regarding classification. Symantec is a large-cap company. According to Equilar (page 6), the median CEO compensation at large-cap corporations was $10.1 million in 2013, so Symantec’s pay is well above that. Symantec’s shares underperformed the NASDAQ 100 over the most recent one, two and five year periods, sometimes substantially. For example, while the NASDAQ 100 went up about 137% in the last five years, Symantec went up only 34%.
The GMIAnalyst report I reviewed gave Symantec an overall grade of ‘B.’
Given the high pay and poor performance with regard to shareowner returns, I voted against the pay package and the members of the compensation committee: Geraldine B. Laybourne, Robert S. Miller (Chair), David L. Mahoney and Daniel H. Schulman.
Symantec Board of Directors
As indicated above, I voted against members of the compensation committee. I also share the concern of Calvert and Trillium that none of the directors are minorities. Ideally, I’d like to see more diversity.
I voted to ratify Symantec’s auditor, KPMG LLP, since less than 25 percent of total audit fees paid are attributable to non-audit work.
Shareholder Proposals at Symantec
There were none. Maybe their should have been one for proxy access.
CorpGov Recommendations for Symantec Below – Votes Against Board Position in Bold
|1a||Elect Director Michael A. Brown||For||Against|
|1b||Elect Director Frank E. Dangeard||For||Against|
|1c||Elect Director Geraldine B. Laybourne||Against||Against|
|1d||Elect Director David L. Mahoney||Against||Against|
|1e||Elect Director Robert S. Miller||Against||Against|
|1f||Elect Director Anita M. Sands||For||Against|
|1g||Elect Director Daniel H. Schulman||Against||Against|
|1h||Elect Director V. Paul Unruh||For||Against|
|1i||Elect Director Suzanne M. Vautrinot||For||Against|
|3||Ratify NEO Compensation||Against||Against|
Looking at SharkRepellent.net for provisions unfriendly to shareowners, I found none of the usual.
Mark your Calendar to Submit Future Proposals at Symantec
Symantec’s Bylaws provide that, for stockholder nominations to the Board or other proposals to be considered at an annual meeting, the stockholder must give timely notice thereof in writing to the Corporate Secretary at Symantec Corporation, 350 Ellis Street, Mountain View, California 94043, Attn: Corporate Secretary.To be timely for the 2015 Annual Meeting of Stockholders, a stockholder’s notice must be delivered to or mailed and received by our Corporate Secretary at our principal executive offices between June 30, 2015 and July 30, 2015. A stockholder’s notice to the Corporate Secretary must set forth as to each matter the stockholder proposes to bring before the annual meeting the information required by Symantec’s Bylaws.
Requirements for Stockholder Proposals to be Considered for Inclusion in Our Proxy Materials. Stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act and intended to be presented at Symantec’s 2015 annual meeting must be received by us not later than May 11, 2015 in order to be considered for inclusion in Symantec’s proxy materials for that meeting.
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 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 % if our economy is not to become third world. The rationale for peer group benchmarking is a mythological market for CEOs.