Northern Trust 2024

Northern Trust 2024 Ascertain Client Voting Preferences

Northern Trust 2024 proxy. James McRitchie’s proposal to Ascertain Client Voting Preferences is one of several items to be voted on before or during the Northern Trust annual meeting on April 16, 2024, at 8:30 a.m. Pacific. Attend the annual meeting online. I suggest you vote in advance. However, you can also vote with your control number during the meeting if voting isn’t cut off right after my proposal has been presented.

Vote against all directors. The CEO’s total pay is high at $14M, exceeding four times the average NEO pay and 125 times the median employee pay. Vote AGAINST Pay and Auditor, FOR item #4: Ascertain Client Voting Preferences. See note on Automatic Voting. Note: If you vote online and leave blanks, those blanks will be filled in, not as abstentions, but as if you had voted as the Board recommends. That’s not exactly democratic corporate governance.

Northern Trust 2024: Background

Northern Trust Corporation, a financial holding company, provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals worldwide. ** I voted with 36% of the Board’s recommendations. You can view the Proxy Statement via the SEC’s EDGAR system (look for DEF 14A) or on CapEdge, which offers many free tools.

The Shareholder Commons

Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons) I take a systems approach.

ISS Rating

Northern Trust Corporation’s ISS Governance QualityScore as of April 1, 2024, is 5. The pillar scores are Audit: 6; Board: 6; Shareholder Rights: 3; Compensation: 6. Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.

Northern Trust 2024: How We Voted

ItemEgan-Jones RecommendationCorpGov.net Votes
1A-1K – Election of DirectorsAgainst Crown, Henderson, O’Grady, Smith, Jr., Thompson, Tribbett IIIAGAINST ALL – Bynoe, Crown, Harrison, Henderson, Klevorn, Mehta, O’Grady, Slark, Smith, Jr., Thompson, Tribbett III
2 – NEA PayAgainstAGAINST
3 – Ratification of KPMG LLP as Independent AuditorsAgainstAGAINST – 22 yrs. + company underperforming
4 – Shareholder Proposal: Ascertain Client Voting PreferencesFORFOR

Northern Trust 2024: Considerations and Recommendations

Egan-Jones Ratings

I was helped with my voting advice from Egan-Jones and my proxy voting policy through iconikapp. I also briefly looked at some funds that announced their votes in advance.

Free Proxy Advisor From As You Sow & Iconikapp
Iconikapp

You can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according to values that balance environment, social, governance, and profitability. More information is available at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconikapp.com may differ.

Northern Trust 2024: Board of Directors

I voted Against all the directors. The CEO’s total pay has been over $10M yearly for at least three years, 144 times the median employee pay. The Company has underperformed the S&P 500 for each period I examined: 10 years, five years, two years, one year, year to date.

Northern Trust 2024: Board Items #2 & 3

The CEO’s total pay has been over $10M yearly for at least three years, 144 times the median employee pay. The Company has underperformed the S&P 500 for each period I examined: 10 years, five years, two years, one year, year to date.

Vote AGAINST the Auditor. Even with auditor rotation within the contracted firm, I agree with Egan-Jones that, over time, many are essentially captured. They are troubled when a company contracts with the same firm for over seven years. Northern Trust’s auditor has been KPMG LLP for 22 years. That’s too long.

Northern Trust 2024 Item #4 Shareholder Proposal: Ascertain Client Voting Preferences

Vote FOR proposal #4. My proposal seeks a report on the reputational and financial risks to the Company of misalignment between the proxy votes it casts on behalf of clients and its client’s values and preferences, as well as strategies for addressing such misalignments on essential issues. 

The Board argues that they are giving shareholders what we want, so there is no need for such a report. But they aren’t. Investors want funds to consider their preferences when voting proxies. Alternatively, they want help creating their own self-executing proxy voting policies. Northern Trust’s position boils down to the following: We will vote for you. If you don’t like how we vote, you can vote your proxies on your own. Imagine trying to wade through hundreds of proxies on your own and trying to vote each one intelligently? Personally, I could not do it without Egan-Jones, Iconikapp, or another advisor.

Our Company says they are working to expand options to “enable clients to select from a menu of proxy voting options.” I negotiated and withdrew similar proposals submitted to BlackRock and State Street. They are already providing voting options to their customers and are in the process of determining investor voting preferences. They are making progress. Northern Trust was much more noncommittal in its plans. It isn’t clear if they are even contemplating a system that will come anywhere close to being able to align with client values and preferences, such as offering a voting policy that seeks to maximize portfolio value, instead of the value of each company. See Proxy Voting as if Systems Matter.

Vote FOR proposal #4. Keep this issue on the table. Don’t let directors who have underperformed the market for the last year, two-year, five-year, and ten-year periods off the hook. More proxy voting systems could challenge portfolio managers at Northern Trust to be more creative in issuer engagements and portfolio construction, as well as better aligning with customer values. 

Northern Trust 2025: Mark Your Calendar

Any stockholder proposals for the Corporation’s 2025 Annual Meeting of Stockholders (other than proxy access nominations) must be received by the Corporation, directed to the attention of the Corporation’s Corporate Secretary, no later than November 6, 2024 in order to be eligible for inclusion in the Corporation’s proxy statement and form of proxy for that meeting.

   

Northern Trust 2024: Related Posts

 

Proxy Voting as if Systems Matter

Savings Plus: Transparent Proxy Voting Needed

Northern Trust 2019 Proxy Recommendations

 

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