Innovations in Cooperative Ownership: Converted and Hybrid Listed Cooperatives (Link), by O.F. van Bekkum and J. Bijman, is one of the more interesting research papers I have read since our proposal for Twitter (TWTR) to study cooperatives won 5% of the vote, making it eligible for resubmission for the 2018 annual meeting. Before we redo the proposal (and perhaps expand its use to other companies), I want to examine the available research. If you lean of other studies, please let me know. For background on the 2017 proposal at Twitter and alternatives, see the following: Continue Reading →
Tag Archives | cooperatives
Matt Cropp, Associate Director of the Vermont Employee Ownership Center and Marjorie Kelly, Executive Vice President of the Democracy Collaborative, discuss employee and community ownership, with a specific discussion of the Keep BT Local Campaign. Continue Reading →
Exit to Democratic Ownership; here is a preview of my presentation to the annual meeting of Twitter shareholders, to be held on May 22, 2017, at 1355 Market Street, San Francisco, California 94103. The meeting starts at 10 AM. Bring photo ID.
I am James McRitchie, speaking in favor of proposal #4, Exit to Democratic Ownership, co-filed with Steffen Sauerteig of Germany on behalf of thousands of users around the world as a part of BuyTwitter.org and #WeAreTwitter. Shareholders or members of the press interested in contacting me after this meeting, can email [email protected]
We are part of a world-wide movement to save Twitter from losing sight of its mission and being turned into another democratic-free zone.
Twitter’s stated mission is
To give everyone the power to create and share ideas and information instantly, without barriers.
That mission is very connected to democracy. Twitter is spreading First Amendment rights around the world. Access to information and the exercise of free speech are key to government and an Internet “by and for the people.” Continue Reading →
Twitter Proxy Voting Guide by CorpGov.net. Twitter, Inc. operates as a global platform for public self-expression and conversation in real time. The company offers various products and services, including Twitter that allows users to create, distribute, and discover content; and Periscope, a mobile application that enables user to broadcast and watch video live with others. Twitter is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of one fund families when I checked and voted. Their annual meeting is coming up on May 22, 2017. I will be in attendance, presenting our proposal to study cooperatives, so stop by and say hello.
Of course I voted FOR our proposal entitled Exit to Democratic Ownership, filed in conjunction with BuyTwitter.org. Add to the collective intelligence by tweeting #WeAreTwitter. Follow @BuyThisPlatform. See how and why I voted this and other items below. I voted with the Board’s recommendations 43% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →
Laura Flanders interviews Christopher Mackin, the founder of Ownership Associates, an advisory firm for broad-based employee ownership based in Cambridge, MA. Mackin is also an Adjunct Lecturer at the Rutgers School of Management and Labor Relations and a member of the core faculty of the Harvard Trade Union Program based at Harvard Law School. See a previous guest post by Mackin on corporate governance and employee ownership, Hobby Lobby and Rented Humans. I met Mackin about 35 years ago when we were both graduate students. He was at Harvard; I was at Boston College.
In this video, Flanders and Mackin explore employee ownership and, more broadly, democratic workplaces. Mackin points out: Continue Reading →
CorpGov.net publisher/shareowner activist, James McRitchie in the news.
- Shareholders push for more say over board members (WSJ’s MarketWatch), on proxy access proposals at Bank of America, Citigroup and Goldman Sachs.
- Sued again for daring to file proxy proposals, EMC sues shareholder activists over bid to separate CEO, chairman roles (Boston Business Journal). They lost their ‘no-action’ request with the SEC. Now they are trying to get me to spend more than it is worth defending my proposal. Continue Reading →
Guest post from David P. Ellerman who works in the fields of economics and political economy, social theory and philosophy, mathematical logic, and quantum mechanics. His undergraduate degree was in philosophy at M.I.T. (’65), and he has Masters degrees in Philosophy of Science (’67) and in Economics (’68), and a doctorate in Mathematics (’71) all from Boston University. He has been in and out of teaching in economics, mathematics, accounting, computer science, and operations research departments in various universities (1970-90), founded and managed a consulting firm in East Europe (1990-2), and worked in the World Bank from 1992 to 2003 where he was an economic advisor to the Chief Economist (Joseph Stiglitz). He is currently a visiting scholar at the University of California/Riverside and a Fellow of the Center on Global Justice at University of California/San Diego.
He has published numerous articles in various fields and five books. The published and draft papers and book manuscripts, including Is Wall Street Capitalism Really “The Model, are available on his website, David Ellerman. See also his working papers here on the SSRN site. Continue Reading →
Marjorie Kelly is the rarest of authors, discussing some of the most difficult problems we face but doing so through an easily understood narrative of her own search for answers that is bound to draw in readers from a wide variety of backgrounds. Her analysis is insightful and the recommendations contained in Owning Our Future: The Emerging Ownership Revolution should strike a chord with most, regardless of their political persuasion. We all want a better future for our children. Kelly is pointing in the right direction to make that happen. Continue Reading →
The co-operative sector in the UK, which reached £35.6 billion, outperformed the mainstream economy from 2008 to 2011 by over 20 per cent, growing 19.6% while Continue Reading →
Just as corporations are facing demands for increased democracy through proxy access proposals and vague protests from Occupy Wall Street, some cooperatives, with long-held democratic values are in danger of shifting in the opposite direction through internal Continue Reading →
A California bill, SB 201, authored by state senator Mark DeSaulnier, proposes a new corporate form that blends money and mission.
The idea is to allow social enterprises, which are often organized as either non-profits or for-profit/non-profit hybrids, to access capital from mainstream investors. As a Flexible Purpose Corporation (Flexible Corp.), a company could make profits while pursuing at least one do-good purpose akin to the charitable missions traditionally pursued by nonprofits, or promote the interests of employees, suppliers, customers, creditors, community or public interests like the environment.
via Responsible Investor, March 6, 2011.
One basic idea is to relieve directors of the obligation to maximize long-term Continue Reading →
“The worker-owned cooperative, an economic workplace model that has been around for decades is making a comeback. In some parts of the U.S. new coops are sprouting up, cutting unemployment rates and revitalizing economically depressed communities.”
The corporate governance movement could learn important lessons from these cooperatives.
CalPERS. A report from consultant Wilshire Associates found that activist involvement by CalPERS increased returns at many of the 142 “Focus List” companies. Prior to the pension’s involvement, the companies’ returns averaged 83.3% below their various benchmarks; afterward they yielded returns 12.7% above the benchmarks. Although the cumulative 12.7% is not as high as past results, their corporate governance program still much more than pays for itself. From the report:
Most investment resources in the industry continue to be focused on identifying small misvaluations in publicly traded stocks. This is, perhaps, unfortunate since investors are not earning a satisfactory return on the manager fees and brokerage costs they pay, given the evidence showing that the public stock markets are fairly efficiently priced. However, the evidence is equally clear that many corporate assets are poorly managed and that resources spent on identifying and rectifying those cases can create substantial opportunity and premium returns for active shareholders.
CalPERS announced several actions to address concerns raised by the City of Bell salary controversy, including:
- Posting audit reviews of public agency membership and payroll data submitted to the retirement system
- Highlighting significant findings of public agency reviews and regularly report them to the CalPERS Board
- Establishing procedures and guidelines for CalPERS working-level staff to notify supervisors and senior management of unusually high compensation and salary increases such as those that occurred in Bell
In addition, CalPERS helped establish the Public Employee Compensation and Benefits Task Force, which includes CalPERS staff and representatives public employer organizations, League of California Cities, California State Association of Counties, employee and labor organizations, legislative staff and other, focusing on:
- Options for providing greater public disclosure of public employee compensation, benefits, and other information related to total employee compensation and benefits
- Options regarding caps on total compensation that can be considered for retirement purposes
- Options for mitigating the impact of excessive salaries on the retirement costs of a public employee’s previous public employers and other public agencies in the same liability risk pool
CalPERS had previously announced plans to review the compensation of CalPERS-covered employees who earn $400,000 or more per year in salary. Phase two of the review will look at CalPERS member salaries of $245,000 per year and above.
On September 7, 2010, from 6:00 p.m. – 7:30 p.m., the Sacramento Central Labor Council and PERSWatch.net will host a “CalPERS Candidates’ Forum,” moderated by the League of Women Voters of Sacramento County. The forum will be held in the CalSTRS Boardroom at 100 Waterfront Place in West Sacramento, next to the pyramid. We’re trying to arrange for free parking but haven’t confirmed that yet. This is your opportunity to meet and question the candidates. A video of the forum will be archived on the CalPERS website.
Citigroup. Nice item by David Reilly in the WSJ (Citigroup’s Paltry Debt Penalty, 8/17/10) He sides with U.S. District Judge Ellen Segal Huvelle who refused the SEC’s proposed $75 million settlement with Citigroup over the bank’s failure in 2007 to disclose sub-prime mortgage risks. Goldman Sachs recently paid $550 million for a lesser offense but the SEC only wants $75 million from Citigroup. Why go after only two Citigroup executives for the paltry sums of $100,000 and $80,000 and why should shareowners pay for the execs alleged missteps?
The problem is Citigroup shareholders, under current rules, couldn’t necessarily oversee their company. That is partly due to the difficulty in challenging board directors… For shareholders to be held accountable, the SEC has to let them act more like owners.
Unfortunately, even under the SEC’s most probable proxy access rules shareowners may just have a better view of wrong doing and their money sliding away, since even under the best of circumstances they will only get to nominate 1/4 of the board.
Climate Change. With extreme weather mounting and Congress dithering, WRI report outlines what we can do now to reduce GHGs. The summary, “Everything You Need to Know About Global Warming in 5 Minutes,” by Boston investment manager Jeremy Grantham of GMO does a great job of ticking off the causes, consequences, and controversies surrounding climate change. (The Go-Getter Approach to Climate Change, 17 August 2010, MurninghanPost.com.
Cooperatives. If sustainable technologies are about the what of the living economy, local and shared ownership designs are about the who: who will own the productive capacity of the nation, who will control it, and who will benefit from the wealth created. Minwind Energy is an example of shared ownership, an emerging, broad category of ownership design in which ownership is shared among individuals (as in cooperatives or employee-owned firms) or between individuals and a community organization (as in a community land trust, where families own their homes while a nonprofit owns the land they stand on). (A Different Kind of Ownership Society, via Yes! Magazine, Marjorie Kelly and Shanna Ratner, 8/3/10)
Corporate Governance. It is no longer realistic to look to government to rectify problems caused in the private sector, or to simply ignore such problems and their broader consequences. We all need to look for innovative ways to avoid such problems, such as using the governance process to do so. (Why Corporate Governance Matters to Everyone, Marty Robins, The Huffington Report, 8/17/10)
With the specter of dramatic regulatory changes hovering over them, U.S. public companies have been acting aggressively to streamline corporate governance practices and establish their executive compensation priorities, according to Shearman & Sterling’s eighth annual Corporate Governance Surveys of the 100 largest U.S. public companies. Key corporate governance findings include:
- Majority voting in uncontested director elections has been implemented in some form by 82 of the 100 largest companies, up from 75 last year and from just 11 as recently as 2006.
- Despite amendments to NYSE Rule 452 implemented last year (eliminating broker discretionary voting in director elections), no director standing for reelection at one of the 100 largest companies failed to receive majority support this year.
- The number of Top 100 Companies at which the CEO is the only member of the board of directors who is not independent increased significantly, rising to 59 this year from 49 last year.
- The number of Top 100 Companies with classified boards, of which there were 54 in 2004, declined to only 20, and of those 20, more than one-third were either in the process of declassifying their boards or received approval from their shareholders this year to do so.
- Seventy-one companies disclose they maintain an executive compensation clawback policy (an increase from 56 companies in 2009 and 35 in 2007 — representing a 103% increase in four years). This will become increasingly significant, as the new Dodd-Frank Act mandates clawbacks if a material restatement would have affected the amount received.
- There was a decrease in the overall number of compensation-related shareholder proposals; however, advisory say-on-pay policies continued to be the most prevalent proposal. In addition, the survey suggests that companies cannot assume that their say-on-pay advisory resolutions will pass. For example, three public companies (including one Top 100 Company) failed to win majority support in the 2010 proxy season.
Economy. Biflation, generally defined as inflation and deflation occurring simultaneously in different parts of the economy—specifically, rising prices for commodities that trade in global markets and falling prices for things bought with credit domestically, like homes and automobiles. (Is ‘Biflation’ Real?, Newsweek, 8/16/10)
Electronic Board Meetings. Despite the obvious advantages of using technology and moving to electronic meeting management, few companies have achieved buy-in and taken board meetings to an electronic platform. Some have, however – and South Jersey Industries (SJI) is one such early adopter. (Best practice: establishing an electronic meeting management process, Corporate Secretary, 8/17/10)
Global Corporate Citizenship. Prof. Surinder Pal Singh outlines how global corporate citizenship rests on four pillars: values; value protection; value creation; and evaluation. These four pillars not only underpin the long-term success and sustainability of individual companies, but are also a major factor in contributing to broader social and economic progress in the countries and communities in which these companies operate. Along with good governance on the part of governments, they offer one of our greatest hopes for a more prosperous, just and sustainable world. (The Concept of Corporate Citizenship in a Global Environment, Political Wag, 8/17/10)
As the US markets continue to debate whether we are still in a recession, on the road to recovery, or headed for a double recession, the Indian government is busy imposing regulations to boost corporate philanthropy and social responsibility. In an economy that continues to post steady growth despite upheavals across Europe and the U.S., India Inc. is increasingly facing scrutiny for its role—or notable absence—in the social and environmental growth of the country. (Forcing CSR in India: Is Regulation the Answer?, The CSR Blog, 8/16/10)
Green Chemistry. Two California departments within Cal/EPA are working to identify “chemicals of concern” in consumer products. Eventually, they will push companies to substitute less toxic chemicals and maybe even ban some of those that are killing us now.
Greenest Campuses. 162 American colleges and universities rated by the Sierra Club. Also includes first steps on Chinese campuses.
Proxy Plumbing. The Shareholder Communications Coalition consisting of the Business Roundtable, National Association of Corporate Directors, National Investor Relations Institute, Society of Corporate Secretaries and Governance Professionals, and the Securities Transfer Association prepared a PowerPoint presentation to explain its recommendations for reforming the proxy voting and shareholder communications rules. “This presentation document is intended to help public companies, investors, and other interested parties understand how the proxy system can be improved to benefit all stakeholders.” This is an important initial assessment of feedback on the SEC’s proxy plumbing concept release. I suspect I will disagree with several parts but I heartily endorse their call to:
- Do away with the VIF and replace it with a proxy card.
- Pass voting authority directly to beneficial owners.
- Enable beneficial owners to transfer their proxy authority back to their brokers or bank (e.g. client directed voting) or to another third-party.
Research in Progress. Stanford’s Rock Center for Corporate Governance and the Corporate Secretary’s organization are conducting a survey “to get some hard data and research on what companies are actually doing and hopefully figure out once and for all what elements of governance reform actually lead to improvements and which do not.”
SEC. Rebecca Files finds that cooperation with the SEC through forthright disclosure of a restatement (e.g., disclosures reported in a timely and visible manner) increases the likelihood of being sanctioned, perhaps because it improves the SEC’s ability to build a successful case against the firm. However, both cooperation and forthright disclosures are rewarded by the SEC through lower monetary penalties. (SEC Enforcement: Does Forthright Disclosure and Cooperation Really Matter?, SSRN, 7/14/10)
The SEC settled its suit with New Jersey over securities fraud by issuing a cease-and-desist order, which the state accepted without admitting or denying the findings. No penalties were imposed. According to the SEC NJ claimed it had been properly funding public workers’ pensions when they had not. The SEC has a special unit looking into more public pension disclosures. (Pension Fraud by New Jersey Is Cited by S.E.C., NYTimes, 8/19/10)
The S.E.C. said the fraud began in 2001, when New Jersey increased retirement benefits for teachers and general state employees. New Jersey did not have the money to put behind the new benefits, but every year after that, the state treasurer certified that the pensions were being funded according to the plan.
The SEC finally confirmed they will consider adopting proxy access rules on 8/25. Still no word on threshold, holding period, small issuer exemption. next Wednesday, August 25th at an open Commission meeting. No word on how the big question marks – the ownership threshold and holding period – will be resolved. Sunshine notice. The U.S. Chamber of Commerce has retained Eugene Scalia, the son of U.S. Supreme Court Justice Antonin Scalia, to review the forthcoming SEC rules for a potential legal challenge. (SEC Plan to Pry Open Corporate Boards May Face Challenge, Bloomberg, 8/11/10) J. W. Verret of the George Mason University School of Law has already proposed more than a dozen way to circumvent the law in his paper Defending Against Shareholder Proxy Access: Delaware’s Future Reviewing Company Defenses in the Era of Dodd-Frank.
Shareowner Engagement. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, power has shifted to shareholders. The 2011 proxy season is a game-changer as the rules require boards to seek shareholder support for compensation programs and even directorship candidates. (Directors, Do You have a Shareholder Engagement Program?, Karen Kane Consulting, 8/12/10)
United States Proxy Exchange (USPX). The USPX is a non-government organization dedicated to facilitating shareowner rights, primarily through the proxy process. They are structured as a chamber of commerce but unlike a typical chamber of commerce—which represents corporate executives—the USPX represents shareowners. Membership includes both institutional investors and sophisticated retail investors—many of whom have finance, corporate or legal expertise from their careers. Together, they work to promote an environment where engaged shareowners create value through the corporations they own. Check out their new website. Please join me; sign up for membership.