Standing Voting Instructions: Empowering the Excluded Retail Investor by Jill E Fisch just could be the most important article on corporate governance this year… if it is widely read and acted on. Download at ecgi, Penn Law or SSRN. The above photo is from Small Investors Support the Boards. But Few of Them Vote, The New York Times. Unfortunately, most will not bother to read the article. What follows is both and summary of main points and my commentary. Hopefully, this post will lead to reading the research and adding your voice to those petitioning the SEC to facilitate standing voting instructions. Continue Reading →
Conoco’s virtual only annual meeting is the target of a shareholder proposal by the Sisters of St. Francis of Philadelphia. A similar proposal was filed at Comcast. The Conoco resolution has already been cofiled by the Church of the Brethren Benefit Trust and the Needmor Fund, a Walden client.
As responsible shareholders, we believe good corporate governance includes the opportunity for shareholders to meet face-to-face with the company’s Board and management at the Annual Shareholders Meeting.
Tim Smith of Walden Asset Management stated
The decision to move an annual meeting to cyberspace has moved far beyond a minor internal management decision and become an important governance matter for companies. Imagine if companies facing major controversies had decided to forgo physical meetings. If a company faces debate on their comp package or its climate change position or has votes on shareholder resolutions it is also a problem to have a disembodied discussion on line for a stockholder meeting.
For more views, see Nuns tell companies to get real over virtual AGMs @FT and In Depth: Growth in Virtual-Only Meetings a Concern for Institutional Investors @ Chief Investment Officer.
Disney ties to Pat Robertson could lead to further gun violence if not clarified. Nancy Levine wrote a post that demands attention from Disney shareholders. Where Is Disney’s Outrage About Pat Robertson?
Pat Robertson’s Outlandish Blame Game
Since 2003, the Center for Political Accountability (CPA) has spearheaded disclosure and accountability in corporate political spending. Corporations are the top political spenders at the state and local level. They are a dominant force in shaping public policy. Next proxy season, I will join the Center for Political Accountability in filing proposals on this important topic.
Center for Political Accountability: Citizens United
As I have reminded readers in previous posts, the US Supreme Court’s decision in Citizens United v. Federal Election Commission was based on a false premise. Justice Kennedy’s majority opinion justifies the decision by pointing to the Internet. Continue Reading →
The 50/50 Climate Project released their Key Climate Vote Survey 2017 (link) of votes by America’s largest investors. Those attending last week’s informative Fall Conference of the Council of Institutional Investors in San Diego found out about it and many other newsworthy items.
Key Climate Vote Survey 2017: Groundbreaking Season?
First-time approval of climate risk proposals at Exxon (XOM) and Occidental (OXY) represents a huge win. Victory was only possible because of a highly visible shift in voting by mainstream funds State Street, J.P. Morgan, as well as from BlackRock and Vanguard, which joined climate risk proponents for the first time.
However, do not get complacent. More effort to get mutual funds to address climate change is still needed. According to the 50/50 Climate Project representatives at CII, Vanguard backed only 15% of such proposals, while Blackrock voted for only 9%. while —despite both managers’ high-profile support of resolutions at ExxonMobil and Occidental. The cynic in me says votes may be more driven by the potential for adverse publicity, rather than potential impact on value, although the two are undoubtedly correlated. Compare to Vanguard’s Investment Stewardship 2017 Annual Report.
Keep CalPERS healthy; vote for Flaherman and Brown. Ballots have been mailed out to more than 1.5 million CalPERS members. They must be received by October 2nd to count. This is probably the most important election the $333B+ System has ever held, given how the board isolated and ostracized current director J. J. Jelincic for doing his job. I voted for Michael Flaherman and Margaret Brown. I recommend all members do the same. Take action today.
Questions? Contact [email protected] and [email protected] before and after the election. Flaherman and Brown won’t hide from members once elected. Both have also been endorsed by J. J. Jelincic, the only current board member who routinely asks the tough questions of staff and others on the Board. Continue Reading →
The Interfaith Center on Corporate Responsibility, a coalition of institutional investors representing $200 billion in invested capital that engage corporations on the environmental and social impacts of their operations, sent a letter yesterday to all U.S. Senators urging them not to pass the Financial CHOICE Act.
The proposed legislation, which passed the House and is currently pending in the Senate, would not only eviscerate critical financial reforms instituted in response to the 2008 financial crash, but would also eliminate the long-standing right of shareholders to exercise their voice regarding the governance of the companies they own. Continue Reading →
Publisher’s Note: The following guest post from Timothy Smith reproduces a recent investor letter to the BRT (Business Roundtable) concerning the importance of shareholder resolutions. I added title, graphics, changed some of the formatting and added a note about the BRT for background. See also previous posts: Financial CHOICE Act: From too big to fail, to too big to listen and Financial CHOICE Act: Take Action. Download the original letter via pdf.
July 6, 2017
Mr. Joshua Bolton
President and CEO
The Business Roundtable
300 New Jersey Avenue, Suite 800
Washington, DC 20001
Dear Mr. Bolton:
We are writing to express the deep concerns of numerous investors regarding the Business Roundtable’s active campaign to effectively end the ability of most investors to file shareholder resolutions for a vote at corporate annual general meetings. Continue Reading →
The following is a coalition letter on Twitter, Co-ops and Democracy — specifically on our proxy proposal #4 Exit to Democratic Ownership. Take Action: vote before midnight Sunday (San Francisco time) by phone or electronic proxy OR vote on Monday at the Twitter annual meeting in San Francisco.
This is part of the #WeAreTwitter movement, well documented at BuyTwitter.org. I’m pasting the letter below and related links below that. Thanks to all who signed our letter. If the campaign continues at the annual meeting in 2018, I’m sure signatories will at least double.
Town Hall Meetings on the Financial Choice Act are right now the most urgent defense line to protect shareholder rights. As you are aware, the Financial CHOICE Act (which threatens to gut the Consumer Financial Protection Bureau and the Shareholder Proposal Rule) has been referred to the full House of Representatives for a vote as early as next week. Congressional Representatives are on recess, and are expected to hold town halls or office hours this week. Clearly, time is of the essence. Background: Continue Reading →
A Public Citizen report shows mutual funds hold back political spending transparency through their proxy voting behavior. Fully 64% of political spending disclosure shareholder proposals would have passed with majority support if major mutual funds owning more than 5% had voted in favor of them in 2016.
The report, released during a telephone press conference last week, calls on the nation’s largest mutual fund companies to support political spending disclosure. Press conference participants included US Sen Robert Menendez (D-N.J.); John Coates, professor of law and economics at Harvard Law School; and Patrick Doherty, director of corporate governance for the Office of the New York State Comptroller.
For years shareholders have been pushing companies to disclose information critical to shareholders’ ability to evaluate their investments. Major mutual fund companies can and should play a pivotal role, according to Public Citizen and its partners in the Corporate Reform Coalition. Continue Reading →
The draft Financial CHOICE Act, among other things, would take away a shareholder’s choice to file proxy proposals, their choice to refile similar proposals in subsequent years, their choice to use an agent to help them file and their right to choose from competing candidates unless they attend the meeting in person. The draft Financial CHOICE Act will be heard by the Financial Services Committee on Wednesday April 26 at 10 a.m. Take Action: Contract Committee members and staff to express your opposition (contact information below).
Twitter has been an important tool to promote democracy – think #ArabSpring, #BackLivesMatter, #OccupyWallStreet, #WomenOnBoards, etc. Now, through #BuyTwitter @ BuyThisPlatform, Twitter is being called on to explore its own form of corporate governance – how the company itself can be more democratic and inclusive. The results could have implications for the future of capitalism.
Take Action: On May 22 shareholders (owning as of March 30) will decide if Twitter should study and report on the feasibility of “selling the platform to its users via a cooperative or similar structure with broad-based ownership and accountability mechanisms.” Voting by proxy on the proposal has already begun. As one of the authors, I hope you will consider voting “For” our Proposal #4. Continue Reading →
Virtual-Only Meetings are quickly being adopted by entrenched boards who fear both adverse publicity and any attempt by shareholders, especially retail shareholders, to hold them accountable. Broadridge Financial Solutions ($BR) has a direct financial incentive to push companies toward virtual-only meetings. Although many funds and organizations oppose such meetings, no one in the opposition has a such a direct financial incentive to oppose them.
Take Action: Vote against any all all directors serving on governance or similar committees at companies that hold virtual-only meetings. Continue Reading →
The Investor Stewardship Group (link), a collective of some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts, announced the launch of the Framework for U.S. Stewardship and Governance, a historic, sustained initiative to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct.
My own impression is that this group has been carefully constructed, probably stemming from many discussions at ICGN and CII. They have certainly started with an impressive group. Although most of the principles are relatively ‘safe,’ I am delighted to see their position that “shareholders should be entitled to voting rights in proportion to their economic interest.” That one recommendation alone is huge. I hope they continue to build on their initial consensus items.
Of course, the internet changes everything. Companies used to go public to raise money for factories, staff, etc. Now, they raise funds from private equity funds and scale all the way because they can build out through the internet with coding and algorithms. They go public only when founders and initial supporters want to cash out a portion of their investment. Continue Reading →
A new report and scorecard grades 20 of the largest food retailers in the U.S on their policies and practices regarding pollinator protection, organic offerings and pesticide reduction. Of the top food retailers, 17 received an “F” for failing to have a publicly available policy to reduce or eliminate pesticide use to protect pollinators. Only Aldi, Costco (COST) and Whole Foods (WFM) received passing grades in this category. Continue Reading →
Tobacco Investments Update
Apparently, CalPERS sent invitations out on 9/27, 10/6 and 10/13 to about 400 people. Although I am on mailing lists for press and rulemaking, I wasn’t on the “stakeholders” mailing list. That has now been corrected going forward.
The webinar was brief. CalPERS Chief Operating Officer Wylie Tollette reviewed CalPERS’ prior tobacco divestment actions, CalPERS’ general investment considerations, the broader implications of divestment, and public policy considerations related to tobacco. View recording of webinar. Download the handout in pdf (review-of-tobacco-investments-restrictions-slide-deck). Continue Reading →
The SRI Service Award is one of the most prestigious awards given in the corporate governance industrial complex… and this one is for work in the field of Sustainable, Responsible, Impact investing. No one has to excuse themselves for working in SRI. Like motherhood and apple pie, SRI is inarguably good… although there are still a few who think the earth is flat and climate change is a hoax.
It doesn’t take much to nominate. No justification is required… but you can bet those with the most nominations will be widely discussed at the upcoming SRI Conference (see coverage of past conferences). I submitted the name of one of my heroes, Julie Goodridge, and since I’ll miss the Conference this year, I’ll tell you why after I tell you a little more about the Award. Continue Reading →
Update 7/12/2016: Reeds Inc received two faxed proposals from two shareholders before the deadline for submissions. It looks like shareholders will get to vote on both proxy access and creating an independent chairman. Maybe shareholders can help to turn our company around. Institutional investors only hold about 14% of Reeds Inc and insiders hold 26%, so retail shareholders will need to do the heavy lifting. We’d better get in shape. Hope springs eternal; stock up over 6% for the day.
Reeds Inc doesn’t have their annual meeting until December but proxy proposals are due Monday. I’m submitted a proposal on proxy access but almost submitted a proposal to split the chair and CEO positions. Reeds Inc really needs both. I’m hoping another shareholder will submit a proposal to split the chair and CEO positions. If you own shares in Reeds Inc but aren’t sure how to file a proposal, check out our Shareowner Action Handbook. Still can’t figure it out how to submit a proposal or want some help? Please get in touch. I would be happy to help.
In preparation for December’s annual meeting, I’ll be building more arguments about why change is needed at Reeds Inc but the following are a few thoughts off the top of my head. Continue Reading →
Virtual meetings are quickly being adopted by entrenched boards who fear any attempt by shareholders, especially retail shareholders, to hold them accountable. Annual meetings are the only place shareholders are likely to meet with the managers and boards of the companies they invest in, as well as with employees of those companies and with other shareowners. Comcast (CMCSA) spins their May 16 meeting as one that “will provide expanded shareholder access and participation, improved communications and, over time, cost savings for our shareholders and company.”
If their real concern was to please their shareholders, Comcast would hold a hybrid meeting — allowing shareholders to attend in person or via the Internet. Don’t let them fool you, Comcast is locking out its shareowners to avoid embarrassing questions and accountability, not to reach out and communicate with their shareholders or to save a few dollars on coffee or a room rental. Shareholders are not clamoring for virtual-only meetings. The Council of Institutional Investors ($3 trillion in member assets) maintains a policy favoring hybrid meetings but clearly opposes stand alone virtual meetings: Continue Reading →
CLARCOR Inc. (CLC) hosted its Annual General Meeting on March 29, 2016. A shareholder proposal led by Walden Asset Management for environmental, social and governance (ESG) reporting received 61% support from shareholders, excluding abstentions.
With this result, CLARCOR joins a small minority of companies to ever experience a majority vote in support of on an environmental or social resolution. According to proxy advisor ISS, just one environmental or social proposal passed out of 474 submitted in 2015. Continue Reading →
Proxy cards must be impartially labeled, according to the Securities and Exchange Commission (SEC). Rule 14a-4(a)(3) requires that proxies “identify clearly and impartially each separate matter intended to be acted upon.” (Guidance) Over and over again during the last twenty years I have written to the SEC asking them to enforce this rule on proxy cards, especially with regard to misleading or uninformative descriptions of shareholder proposals frequently provided on voter information forms (VIFs).
According to Broadridge “98% of all shares of U.S. public companies are held by institutions or retail brokerage accounts in “street name,” leaving just 2% registered through transfer agents.” (Registered Shareholders: How to Manage the Millennial Challenge) Everyone voting shares held in street names votes their ‘proxy’ using a VIF. Yesterday, the SEC finally issued clarification in the form of Questions and Answers of General Applicability: Section 301. Description under Rule 14a-4(a)(3) of Rule 14a-8 Shareholder Proposals. Should we be celebrating? Will the SEC guidance actually change behavior? Does it apply to VIFs or only to legal proxies? Who will enforce the rule? How? Continue Reading →
Corporate lobbying disclosure remains a top shareholder proposal topic for 2016. At least 66 investors have filed proposals at 50 companies asking for lobbying reports that include federal and state lobbying payments, payments to trade associations used for lobbying, and payments to any tax-exempt organization that writes and endorses model legislation. Political activity remains a top investor topic for the sixth consecutive year, with more than 90 proposals filed for 2016 that seek disclosure of either lobbying or political contributions. Continue Reading →
Index to Promote Gender Diversity announced by State Street Global Advisors (SSGA), the asset management business of State Street Corporation (NYSE: STT). Check out the SPDR® SSGA Gender Diversity Index ETF (Ticker: SHE). SHE seeks to track the performance of the SSGA Gender Diversity Index, which comprises listed US large capitalization companies with the highest levels within their sectors of gender diversity on their boards of directors and in their senior leadership.
I view this as a very positive development but also see it as an opportunity to take action by requesting that SSGA also vote its proxies to promote gender diversity. Continue Reading →
The SEC protects the 2%. No, I am not writing about the top 2% of America in terms of wealth or income, although there is probably some correlation. I am writing about the 2% of shares that are still registered. While the SEC is protecting shareholders who own that 2% of shares, they are falling down on the job with respect to protecting the rights of shareholders owning the other 98%. Yesterday, I asked the SEC to invalidate the proxy ballot sent out by Qualcomm (QCOM). I’ve raised this issue before, filing a rulemaking petition on the subject in 2009 but can’t let the SEC’s inaction slide. A few examples of previous posts are as follows:
- Reforms at ProxyVote Don’t Go Far Enough
- Steris Corporation’s Proxy Voting Deflate-Gate
- Biased Ballots: Oshkosh Vote Questioned – Take Action
- Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime
- If I Were on the SEC’s Investor Advisory Committee: Recommendations to Help Retail Investors
- Don’t Let Them Get Away With Stealing Elections
The 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel? is the second such report from As You Sow in two years. I hope it continues as an annual tradition. I urge everyone to read it. Rosanna Landis Weaver, Jackie Cook and others contributing to this project did a great job. As Nell Minow said of the report:
Overpaid CEOs: Rational Apathy at Investment Funds
Below are a few highlights from their press release and executive summary:
CEO pay grew an astounding 997% over the past 36 years, greatly outpacing the growth in the cost of living, the productivity of the economy, and the stock market, disproving the claim that the growth in CEO pay reflects the “performance” of the company, the value of its stock, or the ability of the CEO to do anything but disproportionately raise the amount of his or her pay.
In the last year, pay for S&P 500 CEOs has risen (by some estimates up to 15.6%), yet the value of the shares of these companies actually declined slightly- despite massive expenditures of corporate funds on stock buybacks designed to increase the value of those shares. After five years of delay the SEC finally adopted rules that will allow shareholders to better understand the gap between the pay of the CEO and other employees of the corporation. The SEC is also moving forward on rules that will help expose the gap between the pay of the CEO and the performance of the companies’ shares in the stock market. Furthermore, some mutual funds and pension funds began to better exercise their fiduciary responsibility by more frequently voting down some of the most outrageous CEO pay packages.
Today more and more investors own shares through mutual funds, often investing in S&P 500 index funds. Individual investors are not in a position to sell their stakes in a company. The funds themselves are subject to a number of well-documented conflicts of interest and to what economists refer to with the oxymoronic-sounding term “rational apathy,” to reflect the expense of oversight in comparison to a pro rata share of any benefits.
Proxy Access at Apple (AAPL) will be one of the most important votes of the proxy season. Will shareholders settle for the board’s recently adopted “lite” version, akin to greenwashing, or will shareholders vote in favor of real proxy access? Boards, investors, and the corporate governance industrial complex are watching in anticipation. Your opportunity to vote on this important issue expires TODAY, February 25th at 8:59pm PST (11:59pm EST) if you are using ProxyVote.com.
80% of retail shares aren’t typically voted, so it is almost as if you’ll be voting for five. If you are like me, you may hold Apple ($AAPL) stock in more than one account. Be sure to vote them all. Do it today, unless you will attend the meeting tomorrow. Vote FOR #8, Adopt Proxy Access Right. Continue Reading →
Let’s change Vanguard’s political disclosure vote. Our nation’s largest mutual fund voted against all resolutions submitted by shareholders asking for companies to disclose their political spending. Shouldn’t we have the right to know what candidates our investments are supporting?
Vanguard’s Political Disclosure Vote Needs Changed
Join more than 59,000 American’s who have already petitioned Vanguard to change their proxy voting behavior. Support shareholder resolutions that seek disclosure of political spending at companies where Vanguard owns a shares. If Vanguard votes with us, instead of against us, it won’t be long before other large funds like BlackRock start doing the same. Within a few years, we could actually begin to know what companies are funneling how much money to which candidates. Vanguard’s political disclosure vote can be changed – with your help. Sign the petition by U.S. PIRG to change Vanguard’s political disclosure vote. Continue Reading →
Disclose Climate Lobbying: Resolutions Filed at Oil and Gas Companies
Encouraged by the forward‐looking actions addressing climate change at the Paris Climate Conference (COP21) in December, investors have filed shareholder resolutions at 11 oil and gas companies asking them to disclose climate lobbying activities. The resolutions urge the companies to fully disclose their lobbying activities and expenses (direct and indirect through trade associations) and to review their public policy advocacy on energy policy and climate change. Let’s get oil and gas companies to disclose climate lobbying! I sincerely hope readers of Corporate Governance (CorpGov.net) will vote in favor of these resolutions as they appear on corporate proxies. Monitor how others are voting at Proxy Democracy. If you own stock in other oil and gas companies, consider filing similar resolutions. Don’t know how? Check out our Shareowner Action Handbook. Take Action! Continue Reading →
In the wake of a New York Times story by Mark Oppenheimer about Whole Foods Market CEO John Mackey’s relationship with former rabbi and alleged sex offender Marc Gafni, the company has come under scrutiny. (A Spiritual Leader Gains Stature, Trailed by a Troubled Past)
On December 25th, The Times story reported Gafni saying of one of his alleged victims, “She was 14 going on 35.” Continue Reading →