Environmental health program manager wanted by my favorite nonprofit, As You Sow. Austin Wilson is leaving for a period of extensive travel. I will certainly miss him and hope when he returns he will find similar employment. Looking to make the world a better place and have the right skills and experience? There is probably no better place you could be working. Official job announcement. Continue Reading →
Tag Archives | ESG
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 (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 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 (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 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.
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.
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.
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.
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.
- 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.
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.
Field Assistance Bulletin 2018-01
Field Assistance Bulletin 2018-01 issued by Trump administration. Recently, the Employee Benefits Security Administration (EBSA) within the Department of Labor (DoL) released Field Assistance Bulletin 2018-01 (link) relating to ESG (environment, social and governance) and shareholder rights for ERISA governed benefit plans. I set out some brief high-level analysis on the guidance below. Continue Reading →
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.
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.
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.
NorthStar Asset Management, Inc., a Boston-based wealth management firm, announced that it has published a white paper outlining its perspective on the issue of domestic (U.S) prison labor in company supply chains, and recommending best practices for companies and investors to uncover and respond to abusive labor practices.
Prison Labor in the United States: An Investor Perspective goes into detail about how prison labor has become a critical issue related to economic inequality, racial justice, and human rights. Explained CEO Julie Goodridge, Continue Reading →
Lobbying disclosure remains a top shareholder concern for the 2018 season, as evidenced by proposals filed at 50 companies by 74 institutional and individual investors. A coalition is 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. (Above graphic from The Nation’s Where Have All the Lobbyists Gone?)
I urge readers to vote in favor of all these resolutions. In Citizens United v. Federal Election Commission, dealing with the related issue of political contributions, Justice Kennedy’s majority opinion justified the Supreme Court’s decision by pointing to the Internet.
With the advent of the Internet… Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.
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 →
Benefit corporation governance provides increased accountability. Most of our financial capital is allocated and stewarded through a system that has a primary goal of creating financial return. This goal directs the real economy, where shareholders treat corporations as accountable for financial results, but not for their economic, social or environmental impact. Continue Reading →
Part 4 28th Annual SRI Conference in San Diego. Search #AllinForImpact on Twitter to see more posts. See Parts 1, 2, and 3. Yes, I know, this conference was held months ago but I’m still digesting… maybe until the next one. I could spend a productive year just exploring links to the work of the speakers. Mark your calendar for November 1-3, 2018. The SRI Conference returns to the Broadmoor in Colorado Springs. Get on the mailing list. Continue Reading →
Directors Forum 2018: Directors, Management & Shareholders in Dialogue brings together investors, directors and management to engage in open, off-the-record dialogue about today’s pressing governance issues. Speakers will put a spotlight on the escalating impact of “corporate culture” on business success.
Hosted by Corporate Directors Forum, Directors Forum 2018 will be held on January 21-23, 2018 at the University of San Diego. It is designed to encourage interaction between attendees and the nation’s leading corporate governance authorities. Continue Reading →
CalSTRS was named a Best Place to Work in Money Management for 2017 by Pensions & Investments magazine. This year’s honor is the third CalSTRS has garnered—the only public pension plan to do so. They could cinch a fourth such honor by surveying member values.
Pensions & Investments, a global news source for money management, created the survey and award program, which is dedicated to identifying and recognizing the best employers in the money management industry. Continue Reading →
As millennial-aged employees now represent the majority of the U.S. workforce, it is increasingly important that corporate management finds ways to engage them in the company. Creating 401k plans which connect to their core values — like solving human, social and environmental problems through their work and investments — can be a huge advantage to the company as a whopping 85% of millennials surveyed in the 2016 US Trust study said they consider their investment decisions as “a way to express their social, political, and environmental values.” This attracts the best talent, spurs employee engagement, extends retention, and sparks innovation. Continue Reading →
Investor Response to Chamber: Letter
Representatives of hundreds of investors with trillions of dollars in assets delivered a letter to the SEC on November 9, 2017, An Investor response to U.S. Chamber’s Proposal to Revise SEC Rule 14a-8 (report).
We noted with interest the November 1, 2017, guidance contained in Staff Legal Bulletin No. 14I. While we are reserving judgment about how the guidance may apply in practice, we are particularly pleased by Director Hinman’s accompanying statement that the guidance is not intended to “make things easier or harder for one side or the other, . . . [but] to improve the process.” We strongly support that goal and plan to actively monitor the SEC staff no-action process during the upcoming proxy season to determine whether the goal was achieved.
Walden Asset Management has engaged a number of investment managers and mutual funds on their proxy voting practices, specifically challenging voting records on shareholder resolutions addressing significant social and environmental issues. I see this as a major victory. However, more Vanguard shareholders need to speak out to ensure momentum continues. Contact Vanguard.
In 2017, Walden filed resolutions with two Vanguard equity index funds that requested a review of their proxy voting at portfolio companies, particularly on shareholder resolutions focused on climate change. While mutual funds are not required to hold annual meetings for investors, Vanguard scheduled a November meeting for other reasons, thus setting up the opportunity for a vote on the Walden resolution. Continue Reading →
The Global Stewardship at Work report, its 2015—16 sustainability report. was released by the California State Teachers’ Retirement System (CalSTRS). This is the third year the system published the report, which is based on the Global Reporting Initiative G4 Guidelines.
In 2015, CalSTRS became the first U.S. public pension plan to issue a sustainability report that met the GRI guidelines. And this year, CalSTRS continues to report sustainability-focused disclosures that adhere to the GRI performance metrics. The Global Stewardship at Work report also features detailed reporting of material topics that were prioritized based on feedback from stakeholder surveys, including responses from CalSTRS members, employees, special interest groups, and industry/business partners. Continue Reading →
The Global Sustainable Investment Alliance (GSIA) released its biennial Global Sustainable Investment Review 2016, showing that global sustainable investment assets reached $22.89 trillion at the start of 2016, a 25% increase from 2014.
Sustainable investment encompasses the following activities and strategies:
- Negative/exclusionary screening,
- Positive/best-in-class screening,
- Norms-based screening,
- Integration of ESG factors,
- Sustainability themed investing,
- Impact/community investing, and
- Corporate engagement and shareholder action.
Yet, many in the mainstream press continue to disparage sustainable investing. This morning, Justin Baer of the Wall Street Journal reported that “interest in so-called environmental, social and governance investing is surging.” (State Street Offers New Tool to Gauge Environmental, Other Social Risks) There is nothing “so-called” about the movement to ESG investing. It is real.
Walden Moves BlackRock: Background
A number of investors, led by Walden moves BlackRock on climate Risk. Walden Asset Management and the Center for Community Change, along with the City of Seattle Employees’ Retirement System and First Affirmative Financial Network, filed a shareholder resolution requesting a review of BlackRock’s proxy voting process and record on climate change.
Following extensive engagement and constructive dialogue between BlackRock, Walden and a number of investors, the shareholder resolution was withdrawn. As a result of the dialogue, BlackRock has updated its website to provide fresh insights into the ways it believes climate change creates risks and opportunities for companies. BlackRock also noted that climate risk will be a priority for their engagement with companies and boards throughout 2017 and 2018. Continue Reading →
Even in Washington, the numbers are impressive. The Council of Institutional Investors, who met in Washington DC this week, represents 23 trillion (with a t) dollars, mostly made up of retirement and other savings of working families. Compare that to the entire budget of the US government, less than two trillion a year. Like most industry group meetings in Washington, this one had presentations on what to expect from Congress and the regulatory agencies and how millennials will change the way the members do business, plus snack breaks and wireless sponsored by firms trying to sell products and services to the attendees. But the a two and a half day session featured repeated agenda topics on climate change and what are called ESG issues, suggesting that pension funds may step in where governments have failed. Continue Reading →
Anti-hypocrisy proposals could be the most important ones of the season. I purchased shares on Franklin Resources (BEN) so that I could file anti-hypocrisy proposals, of the same variety we get to vote on at the February 15, 2017, annual meeting. I had not owned my shares for a year as of the filing deadline last year, so did not submit a proposal. Fortunately, other shareholders have submitted exactly the type of anti-hypocrisy proposals I would have put forward. I will concentrate on the first anti-hypocrisy proposals and will cover the other items only briefly.
Votes at funds, like Franklin Resources, are especially important since the votes these funds cast at annual meetings drive the outcomes. We can’t expect to win important issues like Majority vote provisions to elect directors, requested reports on climate change activities or voting down outrageous pay packages until huge funds like Franklin Resources vote with us. Large commercial funds, such as Franklin Resources, often have a built-in conflict of interest. They want to service corporate clients, so do not want to offend corporate managers. At the same time, as investors in their funds, we want them to monitor management and be critical when that is in our best interest. These resolutions seek better alignment between the interest of investors in funds offered by Franklin Resources and the proxy positions taken by those funds. Continue Reading →
After making the decision to apply the principles of SRI investing, many clients embark on the initial step of selecting a core stock fund. Traditional investors have literally hundreds of highly efficient core investment solutions. However, SRI investors aren’t so blessed—which is why I put together this core list of Best SRI Funds.
Best SRI funds need to start out by being financially sustainable. Some fund companies seem to believe that they can rake in higher fees on the backs of well meaning investors. The primary objective of a core fund is to match the market with as little cost drag as possible. Continue Reading →
The Department of Labor (DOL) rescinded Interpretive Bulletin 2008-2 relating to the Exercise of Shareholder Rights and replaced it with Interpretive Bulletin 2016-01 which reinstates the language of Interpretive Bulletin 94-2 with some modifications. US SIF supports this change as IB 2008-2 was not only inconsistent with prior guidance, but may have discouraged ERISA plan fiduciaries from exercising their shareholder rights.
The guidance appropriately notes the positive role fiduciaries play through the exercise of shareholder rights. Additionally, this guidance also reinforces the language of IB 2015-1 on economically targeted investments which clarified that environmental, social and governance (ESG) impacts can be intrinsic to the market value of an investment. Continue Reading →
US SIF Foundation Releases 2016 Biennial Report on UA Sustainable, Responsible and Impact Investing Trends. Sustainable, responsible and impact investing (SRI) assets now account for $8.72 trillion, or one in five dollars invested under professional management in the United States according to the US SIF Foundation’s biennial Report on Responsible and Impact Investing Trends 2016, which was released today. Continue Reading →
WEST SACRAMENTO, CA – The California State Teachers’ Retirement System is searching for public equity investment managers with an environmental, social and governance focus. There are up to six new ESG manager spots available for consideration.
This is a great opportunity for ESG focused PE Managers. You will be working with one of the most progressive funds in the entire world. CalSTRS even announces their proxy votes in advance of annual meetings so that others can follow their lead. See job opportunities. Continue Reading →