Tag Archives | John Chevedden

United Natural Foods (UNFI) Moves on Special Meeting Proposal

Manhattan InstituteUnited Natural Foods logoThe Manhattan Institute‘s Proxy Monitor Project would call it another failure by gadfly shareholders, since United Natural Foods Inc. (UNFI) filed and was granted a no-action request by the SEC to exclude our proposal to allow shareowners with 15% of the outstanding UNFI shares to call a special meeting. Since the proposal cannot receive a majority vote from shareowners, the Proxy Monitor Project and SEC Commissioner Daniel Gallagher will count the proposal as a loss for shareowners and a waste of money for the corporation. Continue Reading →

Continue Reading ·

Deal Professor Equates Filing Proxy Proposals with Terrorism

Most people don’t like their behavior criticized. CEOs and boards almost always fight my proxy proposals aimed at improving corporate governance. Likewise, I wasn’t happy with the Deal Professor’s criticisms of my shareowner activism in his August 19th NYTimes article, Grappling With the Cost of Corporate Gadflies, which also criticizes John Chevedden and William Steiner. I stewed for days but finally took the advice of a good friend, who is Assistant General Counsel & Corporate Secretary at a major company,

Better to be engaged than enraged!

If I had more time available, my response would have been shorter but I have a number of projects that demand attention. When I submit proposals, I want boards to weigh them carefully on the merits. I have tried to do that with the Deal Professor’s criticism. I hope our mutual use of hyperbole doesn’t preclude further engagement. Unlike the character in the cartoon at right, I feel no need to irritate… but I do often question mechanisms in corporate governance that isolate and concentrate power, rather than distributing it. I prefer structures that distribute power, making us of the wisdom found at all levels.  Continue Reading →

Continue Reading ·

Corporate Governance WABAC Machine

MrPeabodysWayBackMachineCorporate Governance Publisher’s Note: Yes, you’ll find many broken links in the material referenced below. After 5, 10 and 15 years, the internet moves on. Many of the organization’s linked have since gone under. We’re just glad to still be here, offering our readers a sense of the history we have shared. More about the WABAC machine

Five Years Ago in Corporate Governance

Shareowners.org Launched. Finally a social networking site that will actually accomplish something. Yes, you can “friend” people and post to their “wall.” However, right now, ShareOwners.org will help engage typical investors by sending their comments in support of the group’s agenda directly to their members of Congress. Over the long run, ShareOwners.org’s broad four-part agenda focuses on the need for stronger regulation (including a beefed-up SEC), increased accountability of boards/CEOs, improved financial transparency and protection of the legal rights of investors. At some point, shareowners will also be able to vote their shares directly through ShareOwners.org. Unfortunately, the site went dark a few years later and nothing has arisen to take its place.  Continue Reading →

Continue Reading ·

Déjà vu: Shareholder Rights Under Attack

WaldenAssetManagement

Timothy Smith

Timothy Smith

The following on shareholder rights by Timothy SmithDirector of ESG Shareowner Engagement at Walden Asset Management, originally appeared in the Summer 2014 Edition of Walden’s Values Newsletter, which included the usual disclaimer at the bottom.

I’ve added the links and have tacked on some additional reformatted comments from Timothy Smith regarding the role of individual investors in prompting reform. 

Every once in a long while a group of companies, usually led by the U.S. Chamber of Commerce, launches a campaign to change the rules allowing investors to file shareholder resolutions. Welcome to the latest iteration. Continue Reading →

Continue Reading ·

CMG Shareowners Vote Down Pay & Supermajority Requirements

JMSelfie-CMG

McRitchie CMG Selfie

cmg
Just a brief post to thank shareowners at Chipotle Mexican Grill (CMG) for sending a strong message to the company’s board and management.  77% of shares were voted against the executive pay package and a majority supported our proposal to end supermajority voting requirements.

CalSTRS, Florida SBA, AFSCME, Calvert, Domini, Trillium, CBIS, CtW and many others joined to reject the non-binding say-on-pay measure and a proposed stock incentive plan. Both ISS and Glass Lewis recommended their clients vote against the package and the plan. Continue Reading →

Continue Reading ·

Google (GOOGL): How I Voted – Proxy Score 41

googleGoogle Inc, $GOOGL, is one of the stocks in my portfolio. Their annual meeting is coming up on 5/14/2014. ProxyDemocracy.org had collected the votes of three funds when I checked and voted on 5/8/2014. As I post this, I see they now have voting for five funds. I voted with management 41% of the time.  View Proxy Statement.

Warning: 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). Continue Reading →

Continue Reading ·

Heidi Soumerai’s Remarks at EMC Annual Meeting

EMCHere’s an example of classy questioning at an AGM.  Thanks to Ms. Soumerai for allowing me to reprint here.

Good morning Mr. Tucci, members of the board, and fellow shareholders.

My name is Heidi Soumerai and I am the Director of ESG Research at Walden Asset Management, a division of Boston Trust & Investment Management Company where I also serve as Managing Director. Together, we hold approximately 1.6 million shares of EMC. Continue Reading →

Continue Reading ·

Ford Motor Company (F): How I Voted – Proxy Score 52

FordFord Motor Company $F is one of the stocks in my portfolio. Their annual meeting is on 5/8/2014. ProxyDemocracy.org had collected the votes of two funds when I checked and voted on 5/4/2014.  I voted with management 52% of the time.  View Ford’s Proxy Statement, which is user friendly.

Warning: 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 CrimeI generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted.  Continue Reading →

Continue Reading ·

Gilead Sciences (GILD): How I Voted – Proxy Score 43

GileadMtgSignGilead Sciences $GILD is one of the stocks in my portfolio. Their annual meeting is coming up on 5/7/2014. ProxyDemocracy.org had collected the votes of two funds when I checked and voted on 4/28/2014.  I voted with management 43% of the time.  View GILD’s Proxy Statement, which has a linked Table of Contents.

Warning: 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 CrimeI generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted.  Continue Reading →

Continue Reading ·

International Business Machines Corp. (IBM): How I Voted – Proxy Score 75

IBMInternational Business Machines Corp. $IBM, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/29/2014. ProxyDemocracy.org had collected the votes of four funds when I checked and voted on 4/22/2014.  I voted with management 75% of the time.  View Proxy Statement.

Warning: 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) Continue Reading →

Continue Reading ·

Omnicom (OMC) Group Loses to Chevedden: Shareowner Rights Preserved

OmnicomIn a memorandum and order issued yesterday, Judge Louis L. Stanton, of United States District Court for the Southern District of New York, ruled John Chevedden’s motion to dismiss is granted. Omnicom’s motion for summary judgment is denied. “The clerk is requested to enter judgment dismissing the complaint, with costs and disbursements in favor of Mr. Chevedden according to law.” Continue Reading →

Continue Reading ·

EMC v. John Chevedden and James McRitchie: Case Dismissed

LawVmoneyThe chilling effect of companies bypassing the SEC’s inexpensive ‘no-action’ process may be coming to an end. Apache, Waste Connections and a growing number of companies have been successful in US district courts in Texas. Finally, we won a landmark case in U.S. District Court of Massachusetts. The law can prevail, even against the weight a $55B company can wield. Continue Reading →

Continue Reading ·

Take Action: Join Nader's Penny Brigade

RalphNaderSome have argued that Ralph Nader started socially responsible shareholder activism with Campaign GM, when the group filed shareholder proposals to expand GM’s board to include consumer advocates and empower shareholders to place their board nominees on GM’s proxy ballot (proxy access).  According to a recent article in the WSJ, the longtime consumer advocate is now putting together a shareholder-activism group. (Ralph Nader Adds Shareholder Activist to His Portfolio, 1/15/2014) Continue Reading →

Continue Reading ·

Google Insiders Foil Chevedden's Latest Attempt to End Dual-Class Voting

John Chevedden, Shareowner Activist

John Chevedden, Shareowner Activist

Activist, John Chevedden pushed for Google to change its capital structure to give all shares an equal vote.  Most of us own Class A stock with one vote per share. But Google co-founders Larry Page and Sergey Brin, along with Chairman Eric Schmidt, control about 64% of the votes through Class B stock with 10 votes per share.

Chevedden argued the current system allows Google to use shareholders’ capital without giving them the power to hold management accountable for how they run the company. Most shareholders agree with his assessment. Consider the fact that Google insiders control about 70% of votes. Continue Reading →

Continue Reading ·

Cognizant Technology Solutions $CTSH – Proxy Score 75

Cognizant Technology Solutions (CTSH) is one of the stocks in my portfolio. Their annual meeting is coming up on 6/4/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 5/23/2013.  I voted with management 75% of the time.  View Proxy Statement.

 Warning: 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 Continue Reading →

Continue Reading ·

How I Voted: Ford (F) – Proxy Score 64%

Ford ($F) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/9/2013. ProxyDemocracy.org had collected the votes of four funds when I checked on 5/3/2013.  I voted with management 64% of the time.  View Proxy Statement. Warning: 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) Continue Reading →

Continue Reading ·

Contest: Foxhole of the Year Award

Corporate Governance was founded in 1995 and we have never run a contest… until now. Announcing the Foxhole of the Year Award for the company that makes it the most difficult for shareowners turn up at their annual meeting.

Our first nomination came from John Chevedden for FirstEnergy (NYSE:FE). According to the $17 billion company:

You are invited to attend the 2013 FirstEnergy Corp. Annual Meeting of Shareholders at 8:00 a.m., Eastern time, on Tuesday, May 21, 2013, at the Waterfront Place Hotel, Two Waterfront Place, Morgantown, WV 26501. Continue Reading →

Continue Reading ·

Walgreens (WAG): How I Voted – Proxy Score 24

Walgreens ($WAG) is one of the stocks in my portfolio. Their annual meeting is coming up on 1/9/2013. ProxyDemocracy.org had collected the votes of four funds when I voted on 1/1/2012.  I voted with management only 24% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes)

I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions where Continue Reading →

Continue Reading ·

UNFI Vote: Have We Turned the Corner on Annual Elections?

J. McRitchie, UNFI Shareowner

My proposal to declassify the board at United Natural Foods, Inc. ($UNFI) passed by an overwhelming margin of 87.89%:

  • 38,086,048 for
  • 5,248,963 against

See their 8-K filing. Text (pdf) of proposal and opposition. Of course, the margin would have been even higher without insider holdings and blank votes going to management. Have we turned the corner on declassification measures to the point where companies might as well throw-in the towel and declassify when faced with such proposals? Continue Reading →

Continue Reading ·

UNFI Locked Out ShareOwners but We Voted to Declassify the Board: Company Now Seeks Feedback on Meeting Format

I attended a virtual-only meeting of United Natural Foods, Inc. yesterday and was pleased that a majority of shares were voted in favor of my proposal to declassify the board. That, combined with a move to majority vote requirements for directors a few years ago, helps move UNFI ($UNFI) into the center of the pack with regard to corporate governance. However, I am very disappointed with the lockout style annual meeting. They said they are open to change. Of course, that may depend on shareowners providing feedback. I hope you will join me in requesting changes. I tell you how at the end of this post and I make it a painless cut and paste exercise.   Continue Reading →

Continue Reading ·

Proxy Access Moves Forward: Forest Labs, Medtronic & H&R Block

The cartoon at left accompanied an article entitled Where are the funds? (Pensions & Investments, 3/5/2012) P&I lamented, “instead of sitting on the sidelines, activist investors should take advantage of the opportunity to file access proposals… proxy access proponents must be adventurous.” We are going to use the key; adventure is on the way.

As I mentioned in my post 2012 Proxy Access Efforts (July 10), Ken Steiner’s proxy access proposals will be voted on at the Forest Labs (FRX) annual meeting, scheduled for August 15th and the Medtronic (MDT) meeting, scheduled for August 23rd. Word came last week; the SEC also refused to grant a no-action letter to H&R Block (HRB), so Steiner’s USPX designed proposal will also be voted on at their meeting on September 13th. Continue Reading →

Continue Reading ·

Proxy Access: Two Proposals Filed, More USPX Members Needed

The first USPX type proxy access proposal was submitted by Kenneth Steiner (with help from John Chevedden and other members of USPX), which went to MEMC Electronic Materials, Inc. (WFR) on 11/11/2011. Here’s the Whereas portion (the rest is the same as the standard USPX proposal).

WHEREAS, Most long-term shareowners have no reasonable means to make board nominations; this is a standard “proxy access” proposal, as described in http://proxyexchange.org/standard_003.pdf and according to independent research by GMI dated 11/3/2011, more than half of active board members hold no shares in our company. They awarded our CEO options worth over $14 million in 2009 without performance-contingent criteria. They superseded Compensation Committee guidelines in 2010 to award our CEO a discretionary payment. Our CEO’s 2011 annual awards will be 20%-based on a subjective analysis of personal metrics. The stock price plunged 63% in the year ending 11/9/2011. Continue Reading →

Continue Reading ·

Will Netflix Listen to Shareowners?

eBay moved to eliminate supermajority requirements in its bylaws at its first regularly scheduled meeting after shareowners approved a ballot measure by John Chevedden. So far, no real word from Netflix on whether or not they will heed the will of shareowners.

It is great to see this issue covered by Bocco Pendola in Seeking Alpha.

This push to move from a supermajority to simple majority vote came after shareholder activists, led by John Chevedden, got the proposal on the ballot at eBay’s recent annual meeting of shareholders. If you follow the link to the official SEC filing of eBay’s proxy statement, you’ll see that the company opposed the proposal. eBay shareholders, however, voted in favor of it, prompting the eBay board to adopt the proposal just two months after it held the meeting.

This move by eBay puts considerable pressure on Netflix (NFLX)… Netflix notes it “will consider” ratifying the proposal ” in due course.” Like an online auction, the clock is ticking.

via Will Netflix Follow eBay’s Lead in Heeding Its Shareholders? – Seeking Alpha, June 29, 2011.

Continue Reading ·

Documenting Share Ownership to File Resolutions

Hoping to put an end to the efforts by certain executives to frustrate the ability of shareowners to submit proposals, I joined with John Chevedden and Glyn Holton in providing written advice to Meredith Cross, Director Division of Corporation Finance at the SEC, on a proposed staff legal bulletin interpreting Rule 14a-8(b)(2).

Our letter explains the confused decision in the Apache vs. Chevedden lawsuit and discusses how that should be addressed in any template providing instructions on how to document ownership when filing shareowner resolutions.  We also discuss increasingly common efforts to frustrate shareowner proposals based on the timing with which brokers or banks must document their eligibility.

Although an increasing number of proposals have been omitted on the grounds that investors failed to provide sufficient evidence of eligibility, in the vast majority of these cases there is little question that proponents actually did own qualifying shares. Their proposals were thrown out on technicalities. We hope that an SEC Bulletin will clarify the requirements, both for shareowners and issuers, so that we can all spend less time on procedural items that were never intended to present a barrier.

Read the letter; let me know what you think of it. What other efforts should be made by the United States Proxy Exchange (USPX) to protect the rights of shareowners? Join us.

Continue Reading ·

Powered by WordPress. Designed by WooThemes