Archive | September, 2015

Avoiding Proxy Access Lite: Revised Template

CII - Proxy Access: Best PracticesLast week I uploaded a revised template for proxy access proposals (see Avoiding Proxy Access Lite: QUALCOMM Proposal) to address some of the problems identified by the Council of Institutional Investors in their August 5th report, Proxy Access: Best Practices. Thanks to the quick response from several readers, I have already made a few improvments. Please use the new language below if you want to keep up with my latest revised template. Of course, I always welcome additional suggestions for improvement from readers either through the comment function below or by email. I hope to see many of you at the ICGN/CII conference in Boston today. Continue Reading →

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The CEO Pay Problem

CEO Pay ProblemHere in the first days of autumn, it seems that every day there is another article about the sorry extreme that executive compensation has become at so many companies. With the many tools now at the disposal of the proxy voter, one has to ask, how did we get here, and how do we fix it?

Of course, when asking the question of how did we get here, there is the standard answer, “greed,” but there has always been greed in corporate America, I don’t believe that the captains of industry at the beginning of the 20th century where any less greedy at heart than those of today.Egan-Jones Ratings Continue Reading →

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Video Friday: Replacing Board Members

Replacing Board Members - Elephant In The RoomAs I reported in Replacing Board Members: The Elephant in the RoomSVDX and Stanford University’s Rock Center put on another great event last week that just about packed the house! These events are always top notch. A few nibbles and coffee or tea for breakfast, excellent company and a great program — what more could you want on third Thursdays.

If the video does not come up after several seconds, try reloading the page.

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Fixing Proxy Access Lite

Whole Foods Market (WFM)As I have mentioned in other posts (see especially Proxy Access Lite: Victories at Whole Foods, H&R Block), several companies have adopted proxy access ‘lite’ with provisions that make implementation excessively difficult and less effective than they would have been under the SEC’s universal proxy access Rule 14a-11.

Although I withdrew proposals at several companies, based on the fact that even adoption of proxy access lite represented real progress, I vowed to circle back and seek more robust provisions through subsequent amendments. I recently filed the first such proposal at Whole Foods Market. Let’s start fixing proxy access lite.  Continue Reading →

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Avoiding Proxy Access Lite: QUALCOMM Proposal

QualcommAs I have mentioned in several other posts (see especially Proxy Access Lite: Victories at Whole Foods, H&R Block), several companies have adopted proxy access ‘lite’ with provisions that make implementation excessively difficult and less effective than anticipated by the SEC’s vacated Rule 14a-11. At the beginning of last season I announced that proxy access was temporarily ‘on sale.’  I was willing to accept some unfavorable provisions in order to establish a track record of ‘wins.’

That mission has largely been accomplished. Proxy access was the hottest topic this year and is fully expected to be so for the next few seasons. Boards now see proxy access as inevitable and are adopting bylaws even without receiving shareholder proposals. Philip Morris is one of the latest. As the next season gears up, it is time to reframe proposals, avoiding proxy access lite from the start.

Fortunately, the Council of Institutional Investors, released an excellent policy paper on August 5, 2015, Proxy Access: Best Practices, which “highlights the most troublesome provisions” of recently adopted bylaw and charter amendments. I used that as a guide to reconstruct last year’s template proposal and have begun submitting this new template to companies that have not adopted proxy access provisions. QUALCOMM (QCOM) is one of the first examples. We only get 500 words for a shareholder’s proposal. Hopefully, this new version addresses most of the previous defects. Continue Reading →

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Replacing Board Members: The Elephant in the Room

Replacing Board Members

Replacing Board Members

Finally, an SVDX/Rock Center event that just about packed the house! I’ve complained frequently that people, especially students from nearby universities, are missing out on these excellent programs. Attendees still looked mostly like directors to me.

If students ever show up in large numbers, we’ll have to move to an arena or stadium. I’m not sure if it was the topic or if word is getting out. Critical mass has been reached with Replacing Board Members: The Elephant in the Room.

There’s no more important corporate governance task than board succession. Get that right and the rest should follow.

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FedEx: How I Voted – Proxy Score 38

FedExFedEx Corporation (NYSE:FDX) provides a portfolio of transportation, e-commerce and business services under the FedEx brand and is one of the stocks in my portfolio. Their next annual meeting is September 28, 2015. ProxyDemocracy.org had collected the votes of two funds when I checked and voted. I also picked up the votes of CalSTRS in my table below, since ProxyDemocracy doesn’t seem to be scraping their votes. I voted with the Board’s recommendations 38% of the time. View Proxy StatementContinue Reading →

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Conference Scholarships For SRI/ESG Investing

Sustainable, Responsible, Impact InvestingAll In For Impact: The 26th Annual SRI Conference will take place November 3–5, 2015 at The Broadmoor, Colorado Springs, CO. I am pleased to announce conference scholarships for SRI/ESG investing are now being made available to students and young professionals.

The SRI Conference is an annual gathering of the responsible investment industry designed to stimulate, inspire, and serve the needs of investment professionals, as well as institutional and high net worth investors who seek to direct investment capital in positive, healthy, transformative ways—toward a truly sustainable future. Continue Reading →

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IRRCi Investor Research Award Submission Deadline 9/15

Investor Responsibility Research Center Institute (IRRCi) AwardsThe Investor Responsibility Research  Center Institute (IRRCi)  is accepting submissions for its fourth annual Investor Research Award competition for research that examines the interaction between the real economy and investment theory. Practitioners and academics are invited to submit research papers by September 15, 2015, for consideration by a blue-ribbon panel of judges with deep finance and investment experience.

Two research papers – one academic and one practitioner – each will receive the 2015 IRRCi Research Award along with a $10,000 award. The winning papers also will be presented at the December 9, 2015, forum of the Millstein Center for Global Markets and Corporate Ownership at Columbia University in New York, NY. Continue Reading →

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Whole Foods Market: Proxy Score 87

Whole Foods Market (WFM)Whole Foods Market, Inc. (NASD:WFM) is a retailer of natural and organic foods and grocer. The Company has one operating segment, natural and organic foods supermarkets and is one of the stocks in my portfolio. Their next annual meeting is September 15, 2015. ProxyDemocracy.org had collected the votes of four funds when I checked and voted. I voted with the Board’s recommendations 87% of the time. View Proxy Statement.

Read Warnings below. What follows are my recommendations on how to vote the Whole Foods Market proxy in order to enhance corporate governance and long-term value.   Continue Reading →

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H & R Block: How I Voted – Proxy Score 67

H&R BlockH & R Block Inc (NYSE:HRB) provides tax preparation and banking services and is one of the stocks in my portfolio. Their next annual meeting is September 10, 2015. ProxyDemocracy.org had collected the votes of one fund when I checked and voted. I voted with the Board’s recommendations 67% of the time. View Proxy Statement.

Read Warnings below. What follows are my recommendations on how to vote the H & R Block proxy in order to enhance corporate governance and long-term value.   Continue Reading →

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Take Action: Address Proxy Vote Counting Issue in ISS Survey

proxy vote counting fraud

proxy vote counting fraud

There is not an issue of concern to any investor that is not being systematically harmed by unfair proxy vote counting practices. Although it is late in the day, we ask you to weigh in on the ISS survey to ask them to recommend FOR simple-majority voting and counting proposals in the upcoming proxy season.

As I previously reported (ISS Proxy Voting Survey Due Friday at 5:00 pm ET), ISS has circulated a 2016 survey.  They encourage participation from any-and-all (not just ISS clients) so it would be entirely appropriate for all readers to weigh in.

In addition to shareowners, the press has a strong vested interest in doing so. Most reporters must write their stories the day of the AGM (or by the next morning) but the actual vote results are not delivered to the SEC until several days later.  This makes them unwitting mouthpieces for deceptive managers that counts abstentions as no votes. Few reporters go back to correct or augment their story. Thus, we unwittingly help perpetuate an essential myth promulgated by management’s use of variant vote-counting formulas. Continue Reading →

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Video Friday: Interviews with Don Hyatt of ASA

Don Hyatt

Don Hyatt

As part of my series Retail Shareowners – Facilitating Votes and Activism (see Part 1 and Part 2), I have begun looking more closely at the Australian Shareholders’ Association (ASA). In researching their activities I came across the videos below of interviews with Don Hyatt. Most are somewhat dated but they still provide interesting background.  Shareowners in the United States might do well to create an organization modeled after the ASA. Continue Reading →

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Society 2015: Part 5 – Myron T. Steele & More

Society of Corporate Secretaries & Governance ProfessionalsThe last of my notes from the Society’s 2015 National Conference in Chicago, 6/24-27/20015. Part 1, Part 2, Part 3, and Part 4. Sorry to be posting so long after the event but I still find them useful… and going through my notes may help you remember some of the more interesting points if you attended or get some sense of what went on if you did not. Even though it took me months to get them out, they are still cryptic.

More on Twitter at #Society15. If anyone has photos or notes from the panel I was on, “Responding to Shareholder Proposals,” I would appreciate it if you would send copies along to me. Panel members included Elizabeth Ising, Amy Borrus, James McRitchie. Rick Hansen moderated. I had a great time and expect to be negotiating dozens of proxy access proposals next season more smoothly. Thanks again to the Society.
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ISS Proxy Voting Survey Due Friday at 5:00 pm ET

ISS Proxy Voting Survey - Hall of Mirrors

ISS Proxy Voting Survey – Hall of Mirrors

Attention everyone who thinks ISS has too much say over how proxies are voted. It might be a good time for you to see how those policies are actually developed. No, ISS doesn’t develop its policies by reviewing all the academic research to determine which types of proxy proposals create value or are correlated with value creation (Do ISS Voting Recommendations Create Shareholder Value?David F. Larcker, Brian Tayan) Instead, the ISS proxy voting survey essentially asks subscribers to tell ISS how it should advise their subscribers to vote.

When I first heard about this years ago, it felt like looking down a never ending hall of mirrors. You ask me how shareholders should vote; then, when voting time comes, you remind me what I said. Of course, not all ISS clients will have anything to say about every issue and a large number probably do not have the staff to be researching proxy voting issues and policies. It is a little like one of those Lost on the Moon exercises you may have taken in one of your classes on group dynamics. In most cases, the group will be smarter than the individual participants. The same principles apply in creating a proxy voting policy.  Continue Reading →

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Clorox Adopts Proxy Access Lite

cloroxIn response to a proxy access proposal I filed earlier this year, Clorox Co (NYSE:CLX), manufacturer and marketer of consumer and professional products, adopted proxy access (press release, amended bylaws). I am declaring another victory and withdrawing my proposal.

While I filed a standard proxy access proposal seeking the ability of shareholders with 3% of shares held for 3 years to be able to nominate up to 25% of the board, Clorox adopted bylaws allowing nominations only up to 20% and limiting nominating groups to 20, whereas my proposals had no such restrictions on the number of participants in nominating groups. Continue Reading →

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