Kellogg 2019 annual meeting is April 26th. Stock price fared poorly for the last five years, so the CEO should not be paid as if he had average performance. Vote AGAINST pay. The Compensation Committee should not be reelected, since they recommended average pay for below average performance. Vote AGAINST Laschinger and Tasted. Vote AGAINST ratifying the auditor. They have served for more than seven years, so independence is questionable. Vote FOR declassifying the board, so that we can hold each member accountable every year.
Tag Archives | CEO pay
Intuitive Surgical 2019 Proxy Vote
Intuitive Surgical 2019 annual meeting is April 25th. Vote AGAINST (1F) Alan Levy and (1H) Mark Rubash. Vote FOR #5 Eliminate Supermajority Provisions.
Northern Trust 2019 Proxy Recommendations
The Northern Trust 2019 annual meeting is April 23rd. Vote AGAINST Bynoe, Richards, Slark, and Tribbett; AGAINST Executive Pay & Auditor: FOR Disclose Political Contributions and Right to Call a Special Meeting.
Walt Disney 2019: Proxy Vote Recommendations
Walt Disney 2019 annual meeting is March 7, 2019. To enhance long-term shareholder value, vote AGAINST directors Barra, Lagomasino, Iger, as well as pay and the auditor. Vote FOR shareholder proposals to report on lobbying and cyber security. Continue Reading →
FedEx 2018 Proxy Voting Guide
The FedEx 2018 annual meeting is September 24th. Vote AGAINST John A. Edwardson, Paul S. Walsh, Marvin R. Ellison, John C. (“Chris”) Inglis, Shirley Ann Jackson and Susan C. Schwabas, as well as the pay package. Vote FOR all three shareholder proposals. Continue Reading →
Stock Buyback: Shareholder Initiative
A stock buyback can increase senior executive pay, unrelated to performance. First, stock buybacks increase the value of long-term performance stock options and other forms of equity pay. Second, senior executives sometimes time their own stock sales to take advantage of the bump in price that usually accompanies stock buyback announcements. Such behavior defeats the purpose of incentivizing a long-term focus. To address our concern that performance pay should not be artificially boosted by a stock buyback, I recently submitted a proposal to Cisco Systems and expect to submit similar proposals to other companies.
Last year, I submitted a similar proposal to GE. The updated submission to Cisco Systems adds a provision to address market timing. As always, I welcome suggestions and comments from interested readers. How can such resolutions be improved? What have I missed? Or, if you disagree, why are my concerns unwarranted? Use the comment section below the post or email me. Continue Reading →
DaVita 2018 Proxy Voting Recommendations
The DaVita 2018 annual meeting is June 18. Vote AGAINST Arway, Desroches, Grauer and Thiry, as well as pay. Vote FOR proxy access amendments to enhance long-term shareholder value. Continue Reading →
NEE Nextera Energy Proxy Recommendations
NEE Nextera Energy. through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why.
If you have read these posts related to my portfolio for the last 22 years, have values aligned with mine, and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 24, 2018. I voted with the Board’s recommendations 44% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Chipotle Mexican Grill Proxy Guide
Chipotle Mexican Grill, Inc. (CMG), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2017, it operated 2,363 Chipotle restaurants throughout the United States, as well as 37 international Chipotle restaurants; and 8 non-Chipotle restaurants. Most shareholders do not vote because reading through 70+ pages of the proxy is not worth the time for the small difference your vote will make.
Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years, have values aligned with mine, and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts. The annual meeting is coming up on May 22, 2018. I voted with the Board’s recommendations 38% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
PayPal Holdings Proxy Recommendations
PayPal Holdings (PYPL), operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Its payment solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products.
Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years, have values aligned with mine, and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts. The annual meeting is coming up on May 23, 2018. I voted with the Board’s recommendations 44% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Intel Proxy Voting Recommendations
Intel Corporation (INTC), designs, manufactures, and sells computer, networking, data storage, and communication platforms worldwide. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years, have values aligned with mine, and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts. The annual meeting is coming up on May 17, 2018. I voted with the Board’s recommendations 53% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
United-Guardian Proxy Rule Violation
United-Guardian (UG), United-Guardian, Inc. manufactures and markets cosmetic ingredients, personal care products, pharmaceuticals, medical lubricants, healthcare products, and specialty industrial products in the United States and internationally. Most shareholders do not vote because reading through the proxy is not worth the time for the small difference your vote will make, although this one is only 16 pages Below, I tell you how I voted and why. The annual meeting is coming up on May 16, 2018. I voted with the Board’s recommendations 0% of the time, since our Company flagrantly violated regulations. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Charles Schwab Proxy Voting Guide
Charles Schwab Corporation (SCHW), through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I voted and why.
If you have read these posts related to my portfolio for the last 22 years, have values aligned with mine, and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 15, 2018. I voted with the Board’s recommendations 60% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
3D Systems Proxy Voting Guide
3D Systems Corporation (DDD), through its subsidiaries, provides three-dimensional (3D) printing products and services worldwide. Most shareholders do not vote because reading through 50+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I voted and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read my rationale), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 15, 2018. I voted with the Board’s recommendations 67% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).
Read Warnings below. What follows are my recommendations on how to vote the proxy in order to enhance corporate governance and long-term value.
3D Systems: ISS Rating
From the Yahoo Finance profile:
3D Systems Corporation’s ISS Governance QualityScore as of April 1, 2018 is 4. The pillar scores are Audit: 2; Board: 3; Shareholder Rights: 1; Compensation: 10.
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. Therefore, we need to pay closer attention to executive compensation.
3D Systems: Board Proposals
1. 3D Systems Proxy Voting Guide: Directors
Egan-Jones Proxy Services recommends “For,” with the exception of: William E. Curran (1A), Kevin S. Moore (1I) and Jim D. Kever (1F) because they have served for more than ten years (with compromised independence) and sit on key committees, which should be composed only of independent directors. Although I agree with the thrust of their arguments, I am not ready to set that as my policy.
Since I voted against the pay package, I also voted against all members of the compensation committee: William E. Curran, William D. Humes, and Kevin S. Moore. I also note, there are no women on the board. I am inclined to vote against the nominating committee next year, if that continues.
2. 3D Systems: Executive Compensation
3D Systems’ Summary Compensation Table shows the highest paid named executive officer (NEO) was CEO Vyomesh I. Joshi at $1.9M. I’m using Yahoo! Finance to determine market cap ($1.3B) and I am roughly defining large-cap as $10B, mid-cap as $2-10B, and small-cap as less than $2B. 3D Systems is a small-cap company. According to the Equilar Top 25 Executive Compensation Survey 2015, the median CEO compensation at small-cap corporations was $3M in 2014, so pay was under that amount.
3D Systems shares substantially underperformed the Nasdaq over the most recent one, two, and five year time periods. For 2017 the ratio of the annual total compensation of Mr. Joshi, our CEO, to the annual total compensation of our median employee was 35 to 1.
Egan-Jones Proxy Services rates compensation practices as “Neutral” and recommends For.
However, to me it looks like 3D Systems is gaming the system, since they substantially reduced pay from $8.1M to $1.9M in one year. I feel I cannot ignore this recent history of overpaying. That factor and continued underperformance led me to vote “AGAINST” the say-on-pay item, as well as members of the compensation committee.
3. 3D Systems: Ratify Auditors
I have no reason to believe the auditor has rendered an inaccurate opinion, is engaged in poor accounting practices, or has a conflict of interest. However, Egan-Jones notes the auditor has been serving as the Company’s auditor for more seven years and their independence is compromised. I also believe that the companies should consider the rotation of their audit firm to ensure auditor objectivity, professionalism and independence. I have not set a specific number of years. In this case I voted FOR.
3D Systems: Shareholder Proposals
4. REDUCE THE OWNERSHIP REQUIRED FOR STOCKHOLDERS TO CALL A SPECIAL MEETING
This proposal is from Myra Young, as written and recommended by me (James McRitchie), so we certainly voted in favor. Most states allow 10% to call a special meeting. Before we submitted the proposal 3D Systems had a threshold of 50+%, so we have already won substantial ground prior to this vote. We believe 15% is a reasonable compromise above the 10% standard.
Vote FOR.
3D Systems CorpGov Recommendations
Proxy Democracy was down. Proxy Insight reported on CalSTRS. which also voted AGAINST the pay package and compensation committee. They voted FOR all other items, including our shareholder proposal to lower the requirements for calling a special meeting.
CorpGov Votes:
- Directors: Vote AGAINST William E. Curran, William D. Humes, and Kevin S. Moore.
- Auditor: Vote For.
- Ratify Executive Pay: Vote Against.
- Reduce Ownership Requirement to Call a Special Meeting; Vote FOR
3D Systems: Issues for Future Proposals
Looking at SharkRepellent.net for other provisions unfriendly to shareowners:
- Special meetings can only be called by shareholders holding not less than 25% of the voting power.
- Proxy access provisions are Lite. A shareholder or group of no more than 20 shareholders holding at least 3% of the outstanding common stock continuously for at least three (3) years may nominate directors, so long as the number of directors elected via proxy access does not exceed 20% of the board.
3D Systems: Mark Your Calendar
Under Rule 14a-8 of the Exchange Act, certain stockholder proposals may be eligible for inclusion in our proxy statement and form of proxy for our 2019 Annual Meeting. The date by which we must receive stockholder proposals to be considered for inclusion in the proxy statement and form of proxy for the 2019 Annual Meeting of Stockholders is November 28, 2018 or, if the date of our 2019 Annual Meeting is changed by more than 30 days from May 15, 2018, a reasonable time before we begin to print and mail the proxy materials for the 2019 Annual Meeting.
Warnings
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 5 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 1% if our economy is not to become third world. The rationale for peer group benchmarking is a mythological market for CEOs. For more on the subject, see CEO Pay Machine Destroying America.
Ford Motor Company Proxy Voting Guide
Ford Motor Company (F) designs, manufactures, markets, and services a range of Ford cars, trucks, sport utility vehicles, and electrified vehicles; and Lincoln luxury vehicles worldwide. Placing a big bet on the continued profitability of gas guzzling SUVs and trucks, they recently announced phasing out most sedans. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I voted and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read my rationale), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 10, 2018. I voted with the Board’s recommendations 52% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Invesco Proxy Voting Guide
Invesco Ltd. (IVZ) provides investment management services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. Most shareholders do not vote because reading through 70 pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 10 2018. I voted with the Board’s recommendations 35% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Gilead Sciences Proxy Voting Guide
Gilead Sciences (GILD), a biopharmaceutical company, discovers, develops, and commercializes therapeutics in the areas of unmet medical needs in the United States, Europe, and internationally. Most shareholders do not vote because reading through 80+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I voted and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read my rationale), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 9 2018. I voted with the Board’s recommendations 61% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
3M Company Proxy Voting Guide
3M Company (MMM) operates as a diversified technology company worldwide. Most shareholders do not vote because reading through 80+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I voted and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read my rationale), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 8, 2018. I voted with the Board’s recommendations 44% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
AXP 2018 Proxy Voting Guide
AXP (American Express), together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 7, 2018. I voted with the Board’s recommendations 47% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Goldman Sachs Proxy Voting Guide
Goldman Sachs (GS) operates as an investment banking, securities, and investment management company worldwide. Most shareholders do not vote because reading through 100+ pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how voted and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 2, 2018. I voted with the Board’s recommendations 37% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Bristol-Myers Squibb Proxy Voting Guide
Bristol-Myers Squibb Company (BMY) discovers, develops, licenses, manufactures, markets, and distributes biopharmaceutical products worldwide. Most shareholders do not vote because reading through 70 pages of the proxy is not worth the time for the small difference your vote will make. Below, I tell you how I am voting and why. If you have read these posts related to my portfolio for the last 22 years and trust my judgment (or you don’t want to take the time to read it), go immediately to see how I voted my ballot. Voting will take you only a minute or two and every vote counts.
The annual meeting is coming up on May 1, 2018. I voted with the Board’s recommendations xx% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Nell Minow: Only Corporate Governance Can Save the World
Nell Minow is one of my heroes. Her 1991 book with Bob Monks, Power and Accountability: Restoring the Balances of Power Between Corporations and Society, helped me give a name and framework to what I thought was the world’s most important overlooked problem — corporate governance.
During the last 27 years, I have never met anyone else in the field of corporate governance as witty, insightful or quotable as Nell Minow. She demonstrates these qualities and more in a recent lecture delivered at Sarah Lawrence. Continue Reading →
Compensation: The Difference it Makes
Compensation: The Difference it Makes
Compensation. Most Americans think CEOs of the 500 largest publicly traded corporations are overpaid, even though they think CEOs made less than a tenth of what they actually earn. The Rock Center for Corporate Governance at Stanford University conducted a nationwide survey of 1,202 individuals — representative by gender, race, age, political affiliation, household income, and state residence — to understand public perception of CEO pay levels among the Key takeaways are:
- CEOs are vastly overpaid, according to most Americans
- Most support drastic reductions
- The public is divided on government intervention
Americans and CEO Pay: 2016 Public Perception Survey on CEO Compensation found 74% believe that CEOs are not paid the correct amount relative to the average worker. Only 16% believe that they are.
A brave panel tackled the topic, Compensation: The Difference it Makes, at the Corporate Directors Forums I attended in San Diego last month. Like all Corporate Directors Forums, this one operated under the Chatham House Rule, so you will not find any direct quotes below. These are my notes on Compensation: The Difference it Makes. As such, they include my opinions as well observations made by speakers panelists and others in attendance at the Forum. This is certainly not a transcript. However, I hope even those who attended the Forum will find the post useful, especially my attempt to provide additional context through links and commentary. Continue Reading →
Pearl Meyer on CEO Pay Ratios
Pearl Meyer on CEO Pay Ratios: Pay Transparency is the New Black
Pearl Meyer on CEO pay ratios. The leading advisor to boards and senior management released its 2018 Looking Ahead to Executive Pay Practices survey but long before that, in May 2015, one of their principals declared Pay Transparency is the New Black. I guess that means pay transparency will be the next thing in corporate governance fashion. Or maybe like the TV series Orange is the New Black, we will have a lot of laughs along as CEO pay ratios are disclosed but we have a sinking sense this will not end well. Continue Reading →
CII: Public Companies Endangered Species?
Public Companies Endangered Species: CII Panel
Are public companies an endangered species? If so, why? How can we solve that problem? At last week’s Council of Institutional Investors (CII) Fall Conference there as an informative panel discussion entitled Public Companies: An Endangered Species?
Panelists were David Brown, Michael Mauboussin, and Robert McCooey moderated by the always erudite and entertaining Frank Partnoy, one of the best facilitators in the corporate governance industry. Continue Reading →
CEO Pay Machine Destroying America
The CEO Pay Machine: How it Trashes America and How to Stop it (Amazon) by Steven Clifford should be mandatory reading for all compensation committees and those who vote proxies for large funds. The book is easily read and understood by the layperson. It also includes the fact-based evidence needed to convince fiduciaries that voting against most executive pay packages is one of the first steps to restoring shareholder value, company sustainability and the very foundations of American democracy.
Why combine CEO and chair positions or pay executives with options when both practices lead to poor results? We don’t except “everyone else does it” as an excuse for harmful behavior from our teenagers; why should we accept it as a reason from compensation consultants and the former CEOs sitting on most corporate boards? Clifford also outlines possible remedies but nothing will be done unless we shift public opinion. If widely read and discussed, The CEO Pay Machine could be central to change. Continue Reading →
Starbucks (SBUX): Vote Proxy Access
Starbucks Corporation (NASD: SBUX), together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. SBUX is one of the stocks in my portfolio. ProxyDemocracy.org had collected the vot
es of four fund families when I checked and voted. Their annual meeting is coming up on March 22, 2017
I voted FOR Proxy Access Amendments. See how and why I voted other items below. I voted with the Board’s recommendations 50% of the time. View Proxy Statement via iiWisdom.
Read Warnings below. What follows are my recommendations on how to vote the proxy in order to enhance corporate governance and long-term value. Continue Reading →
Are We Paying CEOs Too Much?
Are we paying CEOs too much? Is the Pope Catholic? (That’s my own bad joke, not from the panelists.)
Executive compensation is front and center on the minds of shareholders, regulators—and politicians. What IS pay? What IS performance? What are the right time frames for measuring performance? And what to do about the perception that pay is not tied to performance?
I was less interested in our “perception” that pay is not tied to performance and more interested in the reality, where such discrepancies exist.
Are We Paying CEOs Too Much?
Are We Paying CEOs Too Much? is Part 5 of my coverage of the Corporate Directors Forum 2017 in San Diego @corpdirforum, which was billed as Directors, Management, & Shareholders in Dialogue. I was also hoping to learn more about President Donald J. Trump and how his administration might impact corporate governance. More about that in a future post. See Part I, Part 2, Part 3 and Part 4. As usual, the Directors Forum was under Chatham House Rule, so I’m mostly just posting a few observations and my reflections that I hope readers will find interesting.Much better photos from the professional photographer at Directors Forum 2017 Photo Slide Show. Continue Reading →
Walt Disney Company: Proxy Score 25
Walt Disney Company: before you vote your proxy
The Walt Disney Company (NYSE:DIS), together with its subsidiaries, operates as an entertainment company worldwide.
The Walt Disney Company is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of three fund families when I checked and voted. Their annual meeting is coming up on March 8, 2017.
I voted FOR Proxy Access Amendments. See how and why I voted other items below. I voted with the Board’s recommendations only 25% of the time. View Proxy Statement via iiWisdom. Continue Reading →
Qualcomm (QCOM) Proxy Access: Proxy Score 57
QUALCOMM Incorporated (NASD:QCOM) develops, designs, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, the United States, and internationally.
QCOM is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of two funds when I checked and voted. Their annual meeting is coming up on March 7th, 2017.
I voted AGAINST pay, comp committee members, auditor. FOR Proxy Access Amendments. See why below. I voted with the Board’s recommendations 57% of the time. View Proxy Statement via iiWisdom. Continue Reading →