Tag Archives | Julie Goodridge

Alphabet and Facebook Shareholders Seek Better Oversight: Scandals Loom

Alphabet and Facebook shareholders will once again vote on shareholder proposals at their 2018 annual shareholder meetings related to unequal voting structures. With growing concerns about data and privacy issues, shareholders will weigh in on how other company governance issues are also at play.

Voting results will influence whether America will continue its long course toward “democratic” corporate governance or will revert to corporate governance by oligarchs.

Explained NorthStar Asset Management CEO Julie Goodridge.

Through these shareholder resolutions, common shareholders have been showing concern for years regarding managements’ outsized voting rights at both companies, and this year’s proposal couldn’t be timelier given the recent fallout from seemingly endless data mismanagement issues at Facebook.

A proposal brought by socially responsible investment firm NorthStar Asset Management, Inc. at Facebook and Alphabet, with corporate governance activist and author James McRitchie as a co-lead filer at Alphabet, seeks to change this arrangement.

We are asking both Facebook and Alphabet to recapitalize the shares so that each share gets one vote. Alphabet and Facebook are publicly traded, and we believe that status as a public company should come with an equal right to vote. Given the scandals this year at Facebook, it is clearly time for shareholders to have meaningful input on company management issues.

At Alphabet, which has three classes of stock, insiders like Sergey Brin, Larry Page, and former chairman Eric Schmidt control 58% of the vote while owning less than 13% of economic stake combined.  Similarly at Facebook, ordinary shareholders buying shares on public markets have access to shares with one vote (class A), while insiders like CEO Mark Zuckerberg own shares with 10 votes per share (class B).  Critics of the voting structures at these companies point out that it would be essentially impossible for class A shareholders to “out-vote” the founders, even on significant or concerning matters.

According to Mari Schwartzer, NorthStar’s Director of Shareholder Activism and Engagement,

We can see this in results of the 2016 annual meeting in which Facebook proposed a new non-voting class of stock in order to allow Mr. Zuckerberg to give away the lion’s share of his wealth without losing control of the company. Our estimates indicate that about 71% of outside shareholders voted against the creation of this new class of stock, yet Mr. Zuckerberg moved forward with attempting to create it. To stockholders, this is evidence that Facebook does not take common shareholders’ wishes seriously.

Mr. Zuckerberg owns almost 14% of stake in the company but controls nearly 53% of the vote, which allowed the company proposal to pass; a shareholder lawsuit halted that aspiration last fall.

At last year’s annual meetings, NorthStar estimates that over 61% of Facebook class A (outside) shareholders and over 88% of Alphabet class A shares voted in favor of the recapitalization plan to one vote per share. NorthStar hopes those figures continue to stay strong at the upcoming annual meetings – Facebook shareholders vote this Thursday, May 31 while Alphabet shareholders will vote next week on June 6th.

Schwartzer continued,

This year is monumental for Facebook in particular, but for tech companies in general. The Cambridge Analytica scandal illustrated how risky and potentially damaging it can be to manage user data, but these issues aren’t at rest yet. Amazon’s personal assistant Alexa just hit the news last week when a private conversation was recorded and sent to a couple’s contacts. Clearly, these data privacy issues are concerns that shareholders should pay close attention to when they vote their proxies and think about how company governance plays a role here.

NorthStar’s Goodridge went on to explain that shareholder interests are not just about fairness:

We are very concerned about shareholders’ inability to deal with this issue at the board level. Mr. Zuckerberg has formed a board with close ties and loyalties to him. We do not believe that the board would step in to ask him to step down if another scandal were to wrack shareholder value further. Shareholder input is crucial for long-term value and company growth.

NorthStar has filed exempt solicitations with the SEC to urge shareholder support. Find them on the SEC’s website at the following links: Facebook exempt solicitation; Alphabet exempt solicitation.

NorthStar Asset Management, Inc. is a wealth management company based in Boston with a focus on socially responsible investing.  At NorthStar, creative shareholder engagement is a positive force for change.

Alphabet and Facebook are clearly trendsetting companies. As Alphabet and Facebook go, so goes the nation. Will our country increasingly be the headquarters of corporate dictatorships? Will corporate dictatorships support a strong democratic government in these United States of America, or will they continue to seek short-term power and profits for the few at the expense of conditions that favor the long-term broader interests of all their shareholders and users?

How shares are voted at Alphabet and Facebook could send a clear message to those in power. Help put an end to democratic-free zones. The oligarchs at both Alphabet and Facebook would do well to end their sovereign rule for their own self-interest.

Even if their votes were strictly tied to their economic stake, the founders of Alphabet and Facebook would still wield considerable power. Instead of being dictatorships they would have to listen to other shareholders and share power.

Instead of what some might consider “lapdog” boards, Alphabet and Facebook could attract more knowledgeable, independent directors, not afraid to speak their minds. Turning around corporate governance at Alphabet and Facebook could also preserve the reputations of these companies and their founders as leaders and avoid cumbersome regulations.

George Washington was encouraged to continue as President for life but stepped down for the good of the country. The founders of Alphabet and Facebook should take a page from history.

See my FB Facebook Proxy Vote Recommendations. I will make full voting recommendations on Alphabet’s proxy before their annual meeting.

   

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Prison Labor: Corporate Supply Chain

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 →

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Alphabet Shareholders Overwhelmingly Support Equal Voting

Alphabet DemocracyAt Alphabet, Inc.’s most recent annual meeting on June 7, 2017, class A shareholders overwhelmingly supported a shareholder proposal asking company management to recapitalize the share structure so that each share has one vote. According to the proponents of the proposal, assuming that all outstanding class B shares were similarly voted, then up to 99.8% of class A shareholders supported the proposal. Of class B insider shares, if only executive officers and directors of the company are counted, then an estimated 88.7% of class A shareholders still supported this proposal. Continue Reading →

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Alphabet: Another Democracy Vote

Alphabet Democracy

Alphabet’s Corporate Governance

At the June 7 annual shareholder meeting of Alphabet, shareholders will vote for a sixth year in a row to weigh in on tech-giant Alphabet’s unequal voting structure. Today is the last day to vote without attending the meeting tomorrow.

Shareholders are expected to vote in favor of the Recapitalization Plan for all Stock to Have One-vote per Share the but winning depends on getting far more than a majority vote. It means those holding shares with out-sized votes being willing to yield their power. What will make them see the value of more democratic corporate governance? The election is more symbolism than real. Still, symbolism can be powerful. Continue Reading →

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Human Right to Water Affirmed

Human Right to Water

Human Right to Water

After engagement with shareholders, two California-based water utilities, California Water Service Group (NYSE: CWT) and American States Water (NYSE: AWR), have adopted policies confirming a commitment to support the human right to water. Sparked by shareholder proposals filed last fall by Boston-based socially responsible investment firm NorthStar Asset Management, Inc., these two human right to water policies are the first at California water utilities.

Explained Julie Goodridge, CEO of NorthStar Asset Management:

NorthStar pioneered industry adoption of human right to water principles in 2007 when we filed the first shareholder proposal on the human right to water at a Connecticut-based water utility. In the ensuing decade, successful implementation at multiple companies other than water utilities has resulted in meaningful and tangible changes in company actions. Adding two more water utilities to our list of companies committed to the human right to water is a necessary step toward industry-wide recognition of the human right to water.

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2016 SRI Service Award Nominations Due

Donna Katrin, 2015 SRI Service Award Winner

Donna Katzin of Shared Interest, 2015 SRI Service Award Winner

The SRI Service Award is one of the most prestigious awards given in the corporate governance industrial complex… and this one is for work in the field of Sustainable, Responsible, Impact investing. No one has to excuse themselves for working in SRI. Like motherhood and apple pie, SRI is inarguably good… although there are still a few who think the earth is flat and climate change is a hoax.

It doesn’t take much to nominate. No justification is required… but you can bet those with the most nominations will be widely discussed at the upcoming SRI Conference (see coverage of past conferences). I submitted the name of one of my heroes, Julie Goodridge, and since I’ll miss the Conference this year, I’ll tell you why after I tell you a little more about the Award. Continue Reading →

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Will FedEx LGBT Employees Be Protected From State-Promoted Discrimination?

FDXFedEx LGBT Employees Subject to State-Sponsored Discrimination

FedEX LGBT rights failure #shameonfedex

FedEX LGBT rights failure #shameonfedex

I’ve already provided my suggested votes at FedEx ($FDX) at FedEx (FDX): Proxy Score 44. September 25th is the last day to vote online.

However, the following came in today from my friend of NorthStar Asset Management, Inc. concerning their proposal #7 Report Application of Company Non-Discrimination Policies in States With Pro-Discrimination Laws. Of course, I would vote for it 100 times over if I could, so I thought her words worth repeating. State-promoted discrimination is akin to state-sponsored terrorism, as far as I’m concerned. We have to fight it on every front.  Continue Reading →

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Sustainable, Responsible, Impact Investing: Part 5

Sustainable, Responsible, Impact InvestingThis is the fifth in a multi-part series on the main program of the 25th annual SRI Conference on Sustainable, Responsible, Impact Investing held November 9–11, 2014 at The Broadmoor in Colorado Springs. See also Video Friday: What is Sustainable, Responsible, Impact Investing?Violating Indigenous Peoples’ Rights Increases Industry RisksSurveys: Nonprofit Board Members & SRI 2014 Conference Attendees25th Annual Conference on Sustainable, Responsible, Impact Investing Part 1, Part 2, Part 3, and Part 4. The Agenda page of the Conference site now has links to video, audio and presentation slides.  Continue Reading →

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‘We the People’ Already Have a Partial Road Map to Fight Citizens United: Stocks and Mutual Funds

Shari Dunn

Shari Dunn

Guest Post by Shari Dunn is an attorney and journalist who is also a “True Believer,” Bon Vivant, Raconteur, Creative, Dreamer and Muse. 

Never believe that a few caring people can’t change the world. For indeed, that’s all who ever have. 

That’s one of Dunn’s favorite quotes from Margaret Mead. In this guest post (originally posted at Tweeting For Change, she interviews Julie Goodridge, CEO of NorthStar Asset Management, one of the primary movers behind a group that recently came to my defense after I was sued by several companies for simply fling shareowner proposals. See SRI Funds & Advisors Send Open Letters on Lawsuits Against Shareholders. Here, Shari Dunn talks to Julie Goodridge about owners taking participation to the next level. Continue Reading →

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SRI Funds & Advisors Send Open Letters on Lawsuits Against Shareholders

SRIIt is wonderful to have supportive friends, especially when they represent socially responsible investors and advisors. John Chevedden, Myra K. Young and James McRitchie extend sincere thanks to the following for sending letters of concern regarding their recent lawsuits against us to: EMC Corp, Omnicom, Express Scripts, Chipotle Mexican Grill, Inc.: Continue Reading →

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