Tag Archives | Daniel S.J. Muffoletto

Reeds Board: Commonsense Principles

Can't Find a Photo of Reeds Board

I Can’t Find a Photo of Reeds Board ($REED)

Reeds Board (REED); is it functional? As indicated in a previous post, it might be useful to try and apply the recently announced Commonsense Principles of Corporate Governance to Reed’s Inc. and their board of directors. This will probably be something of an exercise in futility with mostly blank spots, since Reeds is a very small company, with little coverage and I don’t know much about what the Reeds Board actually does, only something about what they should be doing. I’m not a very large shareholder, so it isn’t financially worth a major effort for me to mount a challenge to the current Reeds Board or management. However, I am hoping this exercise may be helpful to others considering such a challenge or even just a simple books and records request at Reeds or elsewhere.

The business leaders who authored the Commonsense Principles hoped that, “at the very least, these principles will serve as a catalyst for thoughtful discussion.” That’s the intent here. I hope that my very quick review of the Commonsense Principles might be a catalyst for discussions between the Reeds Board and concerned shareholders. I don’t have time to go through all the Commonsense Principles, so I will just highlight a few that seem relevant to the Reeds Board. Like the authors of the Commonsense Principles, my hope is that this post and other communications will lead to thoughtful discussions between the Reeds Board and the shareholders of Reeds Inc. Continue Reading →

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Reeds Renominates Zombie Director Muffoletto

A majority of shares voted to turn them out of office, off the island, you’re fired… but unaccountable boards frequently reappoint a zombie director. Reeds Inc. (REED) flaunts the will of shareholders in renominating Daniel S.J. Muffoletto.  According to the Council of Institutional Investors:

The vast majority of zombies are legally elected due to an outmoded plurality vote requirement that guarantees a candidate’s victory upon receiving a single favorable vote. CII encourages all companies to embrace a majority standard, and the number of companies doing so continues to increase every year. (Zombie Directors Still Haunt Boardrooms Despite New Era of Engagement, 10/29/2015)

The only viable solution to the zombie director phenomenon is to require public companies to adopt a majority voting regime that imposes reasonable limits on the ability of boards to reject the resignation of losing directors. (July 8, 2014, letter to SEC’s Keith F. Higgins)

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Reed’s, Inc. (REED) – Proxy Score 43

Reed'sReed’s, Inc. (REED), which develops, manufactures, markets, and sells natural non-alcoholic carbonated soft drinks, kombucha, candies, and ice creams, is one of the stocks in my portfolio. Their annual meeting is coming up on 12/12/2014. Reed’s is still too small to be covered by ProxyDemocracy.org.  I voted with management 43% of the time and assigned them a proxy score of 43.

View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the Reed’s, Inc. 2014 proxy in order to enhance corporate governance and long-term value. Continue Reading →

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Reeds: Proxy Access Still Needed

ReedsLast Year’s Proxy Access Proposal

Last year I introduced a proxy access proposal at Reeds (REED) calling on the Board to allow 1% shareowners holding for two years to place their director  nominees (up to 24% of the board) on the proxy. It also would have allowed a party of 25 or more $2,000 one year shareowners to place an equal number of nominees on the proxy. Since Reeds had a five member board, the proposal would have allowed for up to two shareowner nominees from two non-coordinating parties. Continue Reading →

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Reeds Inc (REED): Examining The Vote

ReedsTshirt1

Reeds Hippie T-Shirt

ReedsRedAs some readers noted, I put in more effort at Reeds Inc. (REED) than at many of my other holdings, proposing proxy access and writing about the problems at Reeds four times before the annual meeting, even doing a short video.

My rationale is that while I am a small shareowner at both Apple and Reeds, for example, my proportionate share at Reeds is much larger. So, focusing more on Reeds makes sense for me personally. In addition, while other companies in my portfolio get plenty of attention from the financial press and often from other shareowner activists, Reeds does not. Additionally, although Reeds has great products, it is far from reaching its full potential.

I recommended against directors Muffoletto and Fischman because they own no shares, for a say-on-pay frequency of once each year to ensure annual accountability and, of course, I favored my own proxy access proposal to give shareowners a stronger voice going forward. Glancing at the 8-K report filed by Reeds after the AGM, you might think shareowners were in complete agreement with management. However, further analysis reveals otherwise. Continue Reading →

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