Tag Archives | proxy

Reeds Renominates Zombie Director Muffoletto

Daniel Muffoletto

Daniel Muffoletto, Zombie Director

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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Resolution: Report Public Policy on Climate Change

Climate Risk DisclosureRecently, 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 →

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ISS Proxy Voting Survey Due Friday at 5:00 pm ET

ISS Proxy Voting Survey - Hall of Mirrors

ISS Proxy Voting Survey – Hall of Mirrors

Attention everyone who thinks ISS has too much say over how proxies are voted. It might be a good time for you to see how those policies are actually developed. No, ISS doesn’t develop its policies by reviewing all the academic research to determine which types of proxy proposals create value or are correlated with value creation (Do ISS Voting Recommendations Create Shareholder Value?David F. Larcker, Brian Tayan) Instead, the ISS proxy voting survey essentially asks subscribers to tell ISS how it should advise their subscribers to vote.

When I first heard about this years ago, it felt like looking down a never ending hall of mirrors. You ask me how shareholders should vote; then, when voting time comes, you remind me what I said. Of course, not all ISS clients will have anything to say about every issue and a large number probably do not have the staff to be researching proxy voting issues and policies. It is a little like one of those Lost on the Moon exercises you may have taken in one of your classes on group dynamics. In most cases, the group will be smarter than the individual participants. The same principles apply in creating a proxy voting policy.  Continue Reading →

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Boardroom Insider: Aren’t Boards Supposed to Work That Way?

Boards od Directors

A meeting of a board of directors of the Leipzig–Dresden Railway Company in 1852 (Wikipedia)

Those of us involved in corporate governance issues for a living enjoy talking shop with others in the field. One reason, I suspect, it that it’s so damned difficult to explain corporate governance norms to people on the outside. “You mean CEOs pretty well select the very board members who set those CEOs’ pay and performance standards? How can I get a job like that?”…and so on. Continue Reading →

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Who Says Activist Investors Have Struck Out?

The passing US proxy season made lots of business headlines as the most turbulent ever (which I’ve found happens every year). But 2015 was still notable for the flood of activist initiatives targeting company boards of directors. Activists sought “no” votes on directors who set executive pay, or said no to stock buyback, dividend, or spinoff plans. They nominated their own candidates for board seats, sometimes even whole board slates. They generally caused a ruckus. Continue Reading →

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ITC Holdings: Proxy Score 43

ITC HoldingsITC Holdings Corp. (NYSE:ITC), one of the stocks in my portfolio, is an online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production. Their annual meeting is coming up on 5/20/2015. ProxyDemocracy.org had the votes of one fund when I checked and voted on 5/13/2015. I voted with management 43% of the time and assigned ITC Holdings a proxy score of 43. Continue Reading →

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JPMorgan Chase (JPM): Proxy Voting Recommendations

JPMorgan I don’t hold shares of JPMorgan Chase (JPM) in my portfolio but the shareholder proposals that will be voted this year deal with crucial issues that will come up at many other companies this proxy season. I received the following letter from shareholders urging readers to vote for a proposal requesting a report on lobbying at JPMorgan Chase and thought it worth your attention, especially given that I had already blogged about a resolution seeking to end government service golden parachutes also to be voted at JPMorgan Chase, as well as voted collected by ProxyDemocracy.org. I would vote in favor of all the shareholder proposals, if I owned the stock. Continue Reading →

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Corporate Governance In India

IiAS What is corporate governance? It is a process set up for the firms based on certain systems and principles by which a company is governed. The guidelines provided ensure that the company is directed and controlled in a way so as to achieve the goals and objectives to add value to the company and also benefit the stakeholders in the long term. Continue Reading →

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General Electric Company (GE): Proxy Score 57

GEGeneral Electric Company (GE), which operates as an infrastructure and financial services company worldwide, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/22/2015. ProxyDemocracy.org had the vote of two funds when I checked and voted on 4/15/2015.  I voted with management 57% of the time and assigned General Electric a proxy score of 57.

View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the General Electric Corporation 2015 proxy in order to enhance corporate governance and long-term value. Continue Reading →

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Johnson & Johnson (JNJ): Proxy Score 44

Johnson & JohnsonJohnson & Johnson (JNJ), which researches, develops, manufactures, and sells various products in the health care field worldwide, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/23/2015. ProxyDemocracy.org had the vote of three funds when I checked and voted on 4/17/2015.  I voted with management 44% of the time and assigned Johnson & Johnson a proxy score of 44.

View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the Johnson & Johnson 2015 proxy in order to enhance corporate governance and long-term value. Continue Reading →

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Simple Majority Vote Counting Initiative for Proxies

voteThis guest post from Bruce Herbert of Investor Voice provides an overview of a simple majority vote counting shareholder initiative, which seeks to eliminate abstentions from the denominator in calculating votes as well as super majority threshold requirements that have not been approved by shareholders.

“Fair corporate suffrage is an important right that should attach to every equity security bought on a public exchange.”

– U.S. House of Representatives, Securities Exchange Act of 1934 Continue Reading →

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Apple Inc. (APPL): Proxy Score 83

appleUpdate: ISS recommends its clients vote in support of proxy access, calling the proposed eligibility requirements of my proposal at Apple robust, while safeguarding against abuses in the nominating process. Glass Lewis opposes the proposal because “given the company’s… positive financial performance, we do not believe that adoption of this proposal is necessary at this time.”

So, the tool you’ll need when the company is in trouble, you’re supposed to wait until the company is already in trouble to put that in place, according to Glass Lewis… then you wait again until you can make nominations? That’s like waiting until a building is on fire to install a sprinkling system. Apache is the latest company to support proxy access. That company, which sued retail shareowner John Chevedden rather than allow shareholders to vote to eliminate supermajority requirements, seems to have a better grasp of when proxy access is needed than proxy advisor Glass Lewis.

The C$238.8 billion ($189.4 billion) Toronto-based CPPIB and the $182.2 billion FSBA both plan to vote in support of a shareholder proposal calling for proxy access, enabling shareholders to use corporate proxy materials to nominate up to 25% of the board. CalSTRS ($186 billion) voted for proxy access, using the Glass Lewis voting platform. Continue Reading →

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United Natural Foods (UNFI) – Proxy Score 82

UNFIUnited Natural Foods, Inc. (UNFI) , which distributes and retails natural, organic, and specialty foods, as well as non-food products primarily in the United States and Canada, is one of the stocks in my portfolio. Their annual meeting is coming up on 12/17/2014. ProxyDemocracy.org was down when I checked and voted on 12/14/2014. I hope they are able to obtain continued funding to keep the site going. If anyone would like to make a tax deductible contribution to that effort, please email Andy Eggers, cc James McRitchie (I’ll match whatever you contribute up to $2,500). I voted with management 82% of the time and assigned them a proxy score of 82.

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

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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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Cisco Systems – Proxy Vote Score 37

Cisco SystemsCisco Systems, Inc. (NASD:CSCO), which designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the communications and information technology industry worldwide, is one of the stocks in my portfolio. Their annual meeting is coming up on 11/20/2014. ProxyDemocracy.org had collected the votes of four funds when I checked on 11/18/2014. Sorry for the late post. Today is the last day to vote online. I voted with management 37% of the time and assigned them a proxy score of 37.  View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the Cisco Systems 2014 proxy in order to enhance corporate governance and long-term value.

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CSP Inc. (CSPI): Draft Proxy Access Proposal – Comments Invited

CSPIIn 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 →

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California’s Savings Plus: Better Proxy Voting Disclosure Needed Part II

CalHR Savings Plus

This is the second of a two part series. Part I discussed proxy voting at Savings Plus, as compared with at CalPERS. 

CalHR’s Current RFP for Savings Plus

CalHR recently released a Request for Proposal (RFP 700-14-01) seeking bids for investment management services for Savings Plus. Unfortunately, the RFP fails to require Savings Plus participants be informed of proxy voting policies or decisions.   Continue Reading →

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California’s Savings Plus: Better Proxy Voting Disclosure Needed, Part I

CalHR

Most California State employees and retirees have their retirement funds invested largely through two vehicles. CalPERS is the nation’s largest public pension, with almost $300B in assets. Many employees also have smaller amounts invested in CalHR‘s Savings Plus program, with assets of $10B. Both vehicles invest a large proportion of their funds in corporate stock, which carries voting power that can not only impact the value of the companies and potentially our retirement income but also the quality of our environment and our political framework.

Over the course of several decades the Department Labor and the SEC have ruled that proxy voting rights are assets. Fiduciaries of funds, such as CalPERS and Savings Plus, must ensure the underlying shares are voted for the benefit of the employees and retires whose funds they hold in trust. Continue Reading →

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Apple Inc. (AAPL): How I Voted – Proxy Score 89

silver-apple-logo-apple-pictureStockUnderValueExtraxtionApple Inc. (NASD:AAPL) is one of the stocks in my portfolio. Their annual meeting is coming up on 2/28/2014. ProxyDemocracy.org was down for maintenance when I checked and voted on 2/19/2014, so no voting advice there. I checked a few other sources such as CalPERS, Florida SBA and OTPP but none had disclosed their votes on their sites as of yesterday. I voted with 89% of the Board’s recommendations. View Apple’s Proxy Statement. Continue Reading →

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Proxy Access is Needed at Apple

silver-apple-logo-apple-pictureDespite the Apple Board’s best effort to obtain a “no-action” letter to exclude my proxy access proposal, it is included among the items to be voted on at or before the annual meeting to be held on February 28 at our Company’s principal executive offices in Cupertino, CA.  See Apple’s proxy, Proxy Proposal 11, ‘Proxy Access for Shareholders’ on page 63. (A minor gripe – why doesn’t Apple provide a linked index to our proxy so that shareholders can easily flip to the subject they are looking for? Let’s hope part of their strategy isn’t making it too hard to analyze the issues and vote.)

Here’s the thrust of my argument. We need directors who can address the big money pile – not with short-term buyback strategies that facilitate extraction of value but with long-term strategies that create value. Investing $150B in Treasuries or money markets is not efficient use of our money. The returns of Google Ventures, for example, are far above the industry’s mean. There is no reason why Apple couldn’t also put our money to good use though an Apple Ventures type of vehicle or through a revamped and enhanced Blue Sky program.  Continue Reading →

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Last Opportunity to Vote for Proxy Access at Reeds Inc. (REED)

ReedsRedReeds, Inc $REED; you read the Proxy, the crazy Preliminary Proxy, and the rationale for proxy access. You’ve seen the movie, where I  explained the need for proxy access Now, don’t forget to vote! The annual meeting is December 20, 2013.  According to ProxyVote.com, Internet voting is accepted up to 11:59 p.m. (ET) the day before the meeting/cut off date. That’s Thursday! Below are my proxy recommendations.  Continue Reading →

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Reeds Inc. (REED): The Case for Proxy Access & How I Voted

ReedsIn mid-July I e-mailed investor relations at Reeds Inc. $REEDGojiGinger_Kombucha ([email protected]) asking if REED had a classified board or plurality requirements for director elections. Can shareowners call a special meeting or act by written consent? What supermajority requirements are in place re M&A or other actions? No response. This surprised and disappointed me since they were prompt in answering previous e-mails: Make kombucha; we’re already working on it. Try one with coconut water and ginger; good idea. Where can I find Reeds Kombucha in Sacramento?; here’s a list.

According to FactSet Research Systems, “insider/stake ownership” at REED is 33.5% of the company’s float. Being almost a controlled company, maybe they don’t feel the need to respond to inquiries from ‘outside’ shareowners about the firm’s corporate governance.  They not only didn’t answer me, they blocked me from following their Twitter feed. Maybe management and the current board think the less outside shareowners know, the better for them? Continue Reading →

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Cisco Systems (CSCO): How I Voted – Proxy Score 56

ciscoCisco Systems, Inc. $CSCO is one of the stocks in my portfolio. Their annual meeting is next week on Tuesday, 11/13/2013. ProxyDemocracy.org had collected the votes of 2 funds when I checked on 11/13/2013 (there have been more since). I voted with management 56% 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 →

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India Proxy Season 2013 Analysis From InGovern

InGovernA recent report by InGovern Research Services analyzes patterns in the resolutions proposed by Indian listed companies in the just concluded 2013 proxy voting season. The data has been collated and analyzed from a coverage universe of 585 companies forming part of the S&P 500 and BSE 500 indices, which represent over 95% of the market capitalization of Indian listed companies. Management and shareholder resolutions passed in the Annual General Meetings (AGMs) held in 2013 for these companies have been analyzed. Continue Reading →
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Procter and Gamble (PG): How I Voted – Proxy Score 60

P&GProcter and Gamble $PG is one of the stocks in my portfolio. Their annual meeting is coming up on 10/8/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 10/1/2013.  I voted with management 60% 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 →

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Biased Ballots: Oshkosh Vote Questioned – Take Action

I found another case of corporate elections where ballot measures failed to be identified “clearly and impartially.” This time at Oshkosh ($OSK). Should we be surprised? Isn’t it time you took a minute out of your day to send a message to the SEC asking for an end to such abuses?

Broadridge claims:

When it comes to proxy ballots, regulations are complex and mailing deadlines are tight. Broadridge helps fulfill regulatory responsibilities efficiently and economically. Broadridge handles the entire process on-line and in real time, from coordination with third-party entities to ordering, inventory maintenance, mailing, tracking and vote tabulation. Continue Reading →

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