The Northern Trust Corporation (NTRS) is moving toward more democratic governance, thanks to a proxy access proposal submitted on my behalf by John Chevedden in November. Since I own no where near 1% of NTRS (market cap $23B), we would have been denied the right to file the proposal if the Chamber of Commerce, Business Roundtable and others had their way.
Tag Archives | proposal
Recently, with the revelations about Exxon’s past support for climate denial organizations hitting the news, there has been a fresh interest in the ways oil companies have used their lobbying and contributions to oppose climate change solutions. For example most oil companies are members of the Chamber and American Petroleum Association, which recently sued the EPA opposing its clean power plan. Their money and reputation line up working to block regulations that would reduce GHG emissions. Continue Reading →
The Walt Disney Company $DIS will hold their annual meeting tomorrow (3/12/2014). Today is the last day to vote unless you attend the meeting. My voting recommendations are at The Walt Disney Company (DIS): Proxy Score 79.
Since that post a few additional funds have voted and there has been further debate: Continue Reading →
There has been much controversy in recent years surrounding the dual role of chair and CEO. The number of independent chair shareholder proposals seeking to separate the two positions has increased significantly and continues to rise. Both Disney and Starbucks have faced this issue in the past and shareholders once again have proposed to split the roles of chairman and CEO.
Will the momentum behind the independent chair proposals be enough to carry the vote? Or will Disney’s and Starbucks’ recent positive performance shield them from the ire of corporate gadflies? Can a combined chair-CEO truly be subject to adequate oversight?
Citigroup (C) and shareowner activist James McRitchie, who publishes the popular website CorpGov.net, reached an agreement this week on a proxy access proposal that would allow shareowners to place their nominees directly on the corporate proxy. Continue Reading →
The Counsel of Institutional Investors (CII) took a very strong stand yesterday, asking Whole Foods Market to amend its proxy access proposal to conform with the “3 percent for three years” standard applicable to groups.
Whole Foods appears to have generated their proposal in direct response to mine in order to obtain a no-action letter from the SEC under Rule 14a-8(i)(9). As reported earlier, I appealed the SEC’s decision on Whole Foods to the full Commission. Continue Reading →
Here’s one of the most interesting proxy proposals I have seen so far during this new season. I wasn’t aware of similar resolutions filed by Zevin until recently notified by Timothy Smith. If BNY Mellon is a PRI signatory, why are they consistently voting against what PRI stands for? Let’s see more proposals like this. It is like calling out green-washers for polluting. Continue Reading →
In February, I reported that prospects were looking up at nano-cap CSP, Inc. (CSPI), one of the companies in my portfolio. See CSP Inc. (CSPI): How I Voted – Proxy Score 100. CSPI completed a number of reforms, including declassifying the Board. In addition, CSPI started paying a dividend and adopted a mandatory retirement age of 75 for directors, leading to some board refreshment. However, since then the NASDAQ has gone up by about 9%, while CSPI stock has gone down about 3%. I am a long-term investor, so am willing to give the current board more time to demonstrate their performance.
At the same time it is better to take preventive measures by continuing to improve corporate governance BEFORE problems arise. There is no more fundamental measure to ensure the Board’s accountability to shareowners than proxy access. Continue Reading →
Amy L. Goodman and John F. Olson, both of Gibson, Dunn & Crutcher LLP posted Shareholder Proposal Developments During the 2014 Proxy Season on the Harvard Law School Forum on Corporate Governance and Financial Regulation yesterday. It included some good information and analysis but seemed a bit too much like the response to a shareholder proposal should be a lawsuit — an advertisement for Gibson Dunn to this, admittedly biased, eye.
David Bogoslaw, Editor of the Corporate Secretary sent out an email in response that was more balanced with regard to shareholder proposals and lawsuits. I was heading out to Ottawa yesterday, so only had time for a brief response. The following is my open email to Mr. Bogoslaw. Continue Reading →
It’s a case of legal déjà vu for John Chevedden. The retired aerospace worker and shareholder activist is once again facing a legal challenge in his attempt to submit a proposal to shareholders of a public company. This time, it’s KBR.
Last year, Chevedden was sued by Apache Corp., which rejected his shareholder proposal because it said it couldn’t confirm he owned the company’s stock. Chevedden is an annual meeting gadfly, and companies view him with disdain. He owns small stakes in a host of companies, and he’s a prolific filer of shareholder proposals.
(KBR channels Apache, sues activist investor | Loren Steffy | Chron.com – Houston Chronicle, 1/20/2011.) Steffy goes on to note that Chevedden’s “proposals are reasonable.” “The disturbing thing about the legal bullying being employed by KBR and Apache is that it could be applied to almost any individual shareholder.” (See notification to SEC.)
Steffy doesn’t mention it but Apache has also challenged Chevedden again. “Apache Corp. has renewed its battle with shareholder activist John Chevedden over the proof of ownership required to file shareholder proposals.” (Apache Plans to Exclude a Chevedden Proposal Again, RiskMetrics Group, 1/7/2011) Apache is attempting to again bypass the SEC’s no-action request process.
If KBR and Apache succeed, all shareowners will lose because this tactic of intimidation will be copied over and over again. How many shareowners will be willing to risk an expensive lawsuit with the largest corporations in America by simply filing a shareowner proposal? Who will defend them or Chevedden?
I’m hoping the United States Proxy Exchange will again take up Chevedden’s cause but these efforts take time and money. If you think shareowner rights are a cause worth defending, please consider joining USPX. For $3.95 a month you’ll help them defend the rights of all shareowners. (See also,
Rejected No-Action Request Clarifies Required Ownership Evidence and Apache v Chevedden: Postmortem.
2010 Corporate Governance of the Largest US Public Companies General Governance Practices (Shearman & Sterling LLP, pdf) The survey provides a wealth of data concerning board practices at the top 100 companies. A few highlights with a focus on issues of significance to shareowners:
- 82 have implemented some form of majority voting in uncontested director elections, up from 75 last year. In light of the fact that the Reform Act does not include a majority voting requirement with respect to uncontested elections, it is likely that majority voting will receive a great deal of attention during the 2011 proxy season.
- Independent directors constituted 75% or more of the directors on the boards of 88 of the Top 100 Companies surveyed this year. The CEO was the only non-independent director at 59 of the Top 100 Companies.
- Fifteen of the Top 100 Companies have a Chief Risk Officer. In addition, the boards of directors of eight of the Top 100 Companies have a risk committee, and nine of the other Top 100 Companies have a risk committee generally comprised of members of management.
- Separate individuals serve as CEO and chair of the board at 30 of the Top 100 Companies, but of these companies only 11 have adopted an explicit policy of splitting the two offices. The chair is independent at 17 of the 30 companies with a separate chair. All 70 of the Top 100 Companies that have combined the offices of CEO and chair of the board have appointed a lead independent director.
- Of the Top 100 Companies, only six have a Shareholder Rights Plan or “Poison Pill.”
- Of the Top 100 Companies, 20 have a Classified or Staggered Board of Directors.
- Of the Top 100 Companies, 69 disclosed transactions in which the company was a participant and in which a related person had a direct or indirect material interest.
Shareholder proposals for Removal of Supermajority Voting Requirement, Director Elections by Majority Vote and Shareholder Action by Written Consent all had an average level of support of over 50%. Most frequently submitted shareowner proposals:
- Independent Board Chair
- Two Nominees for Each Director Position
- Cumulative Voting for Directors
- Annual Election of Directors
- Redemption of, or Shareholder Vote on, Poison Pill
- Director Elections by Majority Vote
- Removal of Supermajority Voting Requirement
- One Vote Per Share
- Certain Shareholders Can Call Special Meetings
- Reincorporate in North Dakota
- Shareholder Action by Written Consent
- Succession Policy