Tag Archives | supermajority

$COST (Costco): Proxy Vote Recommendations

$COST, Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses. It offers branded and private-label products in a range of merchandise categories. $COST has supermajority vote requirements (66.67%) to amend certain charter provisions, a classified board with staggered terms, and no written consent unless unanimous by all shareholders. In short, reasonable shareholder rights are missing. By way of comparison, Amazon.com ($AMZN) has no supermajority vote requirement, a declassified board elected annually and written consent by majority.

The annual meeting is coming up on January 30, 2018. I voted with the Board’s recommendations 43% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →

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Cognizant Technology Solutions Proxy Voting Guide

Cognizant Technology Solutions Proxy Voting Guide

Cognizant Technology Solutions Proxy Voting Guide

Cognizant Technology Solutions Proxy Voting Guide by James McRitchie of CorpGov.net. Cognizant Technology Solutions Corporation (CTSH) provides information technology (IT), operations and technology consulting, infrastructure, and business process services worldwide. The firm is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of two fund families when I checked and voted. Their annual meeting is coming up on June 6, 2017

I voted FOR James McRitchie’s shareholder proposal to provide a shareholder’s right to act by written consent. See how and why I voted other items below. I voted with the Board’s recommendations 76% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Continue Reading →

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Netflix Inc: Proxy Score 0

Netflix Inc

Netflix Inc

Netflix Inc $NFLX., one of the stocks in my portfolio, an Internet television network, which engages in the Internet delivery of television (TV) shows and movies on various Internet-connected screens. Their annual meeting is coming up on June 9, 2016.

ProxyDemocracy.org had collected the votes of one fund family when I checked. Vote AGAINST directors, pay, auditor; FOR all shareholder proposals. I voted with the Board’s recommendations 0% of the time. View Proxy Statement via iiWisdom. Continue Reading →

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Tesla Motors Inc: Proxy Score 50

Tesla Motors IncTesla Motors Inc $TSLA, designs, develops, manufactures and sells electric vehicles and energy storage products. Their annual meeting is coming up on May 31, 2016. ProxyDemocracy.org had collected the votes of two fund families when I checked. Vote AGAINST compensation committee; FOR Reduce Supermajority. I voted with the Board’s recommendations 71% of the time. View Proxy Statement via iiWisdom. Continue Reading →

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Marriott (MAR): Proxy Score 64

Marriott InternationalMarriott International Inc (NASD:MAR, $MAR) is an operator, franchisor and licensor of hotels and timeshare properties across the world. It also operates markets and develops residential properties and provides services to home/condominium owner associations. It is one of the stocks in my portfolio. Their annual meeting is coming up on May 6, 2016. ProxyDemocracy.org had collected the votes of three funds when I checked. I voted AGAINST the pay plan and compensation committee members, FOR moving to a simple majority voting standard. I voted with the Board’s recommendations 64% of the time. View ProxyStatement.

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Clorox: How I Voted – Proxy Score 100

cloroxThe Clorox Company (CLX) manufactures and markets consumer and professional products worldwide. The company operates through four segments: Cleaning, Household, Lifestyle, and International. Clorox is one of the stocks in my portfolio. Their annual meeting is on November 18, 2015. ProxyDemocracy.org had collected the votes of two funds when I checked. I voted with the Board’sProxyDemocracy.org recommendations 100% of the time. View Proxy StatementContinue Reading →

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H & R Block: How I Voted – Proxy Score 67

H&R BlockH & R Block Inc (NYSE:HRB) provides tax preparation and banking services and is one of the stocks in my portfolio. Their next annual meeting is September 10, 2015. ProxyDemocracy.org had collected the votes of one fund when I checked and voted. I voted with the Board’s recommendations 67% of the time. View Proxy Statement.

Read Warnings below. What follows are my recommendations on how to vote the H & R Block proxy in order to enhance corporate governance and long-term value.   Continue Reading →

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Steris Corporation’s Proxy Voting Deflate-Gate

Steris Proxy Voting Deflate-GateMost companies opposing a shareholder proposal simply rely on an opposition statement, although sometimes they  solicit the votes of their largest shareowners. Steris Corporation (NYSE:STE) took it a bit further. Was it cheating? That depends on your perspective. Like a partially inflated football, a partially stuffed ballot can provide the crucial margin needed to win.

Proxy Voting Deflate-Gate: What Steris Did

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Ellie Mae: Proxy Score 50

Ellie MaeEllie Mae Inc (NYSE:ELLI), one of the stocks in my portfolio, is a provider of on-demand software solutions and services for the residential mortgage industry in the United States. Their annual meeting is coming up on 6/17/2015. ProxyDemocracy.org had the vote of one fund when I checked and voted on 6/11/2015. I also located the vote of CalSTRS.  I voted with the board 50% of the time and assigned Ellie Mae a proxy score of 50. Continue Reading →

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NextEra Energy: Proxy Score 64

Nextera EnergyNextEra Energy Inc (NYSE:NEE), one of the stocks in my portfolio, generates, transmits, and distributes electric energy in the United States and Canada. Their annual meeting is coming up on 5/21/2015. ProxyDemocracy.org had the votes of two funds when I checked and voted on 5/14/2015. I voted with management 64% of the time and assigned NextEra Energy a proxy score of 64.

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

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iRobot Corporation: Proxy Score 33

iRobotiRobot Corporation (NASD:IRBT), one of the stocks in my portfolio, offers consumer , defense and security products, remote presence products and handles contract research and development projects. Their annual meeting is coming up on 5/20/2015. ProxyDemocracy.org had no votes from funds when I checked and voted on 5/13/2015. I voted with the Board 33% of the time and assigned iRobot a proxy score of 33. Continue Reading →

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Bristol-Myers Squibb Co (BMY) Proxy Score 46

Bristol-Myers SquibbBristol-Myers Squibb Co (BMY), which is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products on a global basis, is one of the stocks in my portfolio. Their annual meeting is coming up on 5/5/2015. ProxyDemocracy.org had the votes of four funds when I checked and voted on 4/30/2015. I voted with management 46% of the time and assigned Bristol-Myers Squibb a proxy score of 46.

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

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Kellogg Company (K): Proxy Vote 75

KelloggKellogg Company (K), which manufactures and markets ready-to-eat cereal and convenience foods, is one of the stocks in my portfolio. Their annual meeting is coming up on 4/24/2015. ProxyDemocracy.org had the vote of no funds when I checked and voted on 4/20/2015. I also see that CalSTRS votes still are not getting picked up but they voted with management on everything except the shareholder proposal.  I voted with management 75% of the time, and assigned Kellogg a proxy score of 75. Continue Reading →

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Qualcomm Incorporated (QCOM): Proxy Score 89

QualcommQualcomm Incorporated (QCOM), which designs, develops, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, and the United States, is one of the stocks in my portfolio. Their annual meeting is coming up on 3/9/2014. ProxyDemocracy.org had the votes of four funds when I checked and voted on 3/2/2015.  I voted with management 89% of the time and assigned them a proxy score of 89.

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

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Procter & Gamble Company (PG): Proxy Score 44

P&GProcter & Gamble Company (PG), which manufactures and sells branded consumer packaged goods, is one of the stocks in my portfolio. Their annual meeting is coming up on 10/14/2014. ProxyDemocracy.org had collected the votes of three funds when I checked on 9/20/2014.  I voted with management 44% of the time and assigned them a proxy score of 44.  View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the Proctor & Gamble 2014 proxy in order to enhance corporate governance and long-term value. Continue Reading →

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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 →

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Chipotle Mexican Grill (CMG): How I Voted – Proxy Score 0

cmgChipotle Mexican Grill, $CMG, is one of the stocks in my portfolio. Their annual meeting is coming up on 5/15/2014. ProxyDemocracy.org had collected the votes of three funds when I checked and voted on 5/8/2014.  I voted with management 0% 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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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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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.

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Kellogg: How I voted

Kellogg is one of the stocks in my portfolio. Their annual meeting is coming up April 29. I’m a little disappointed not to see more voting advice available at this late date (only 1 fund reporting on ProxyDemocracy.org).

The “Reduce Supermajority Vote Requirements” proposal is mine, so of course I was sure to vote for that one.

AFSCME has done more to advance the cause of proxy access than any other group in the last decade. Since they appear to put a reasonable amount of effort into researching proxy issues and Continue Reading →

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"Corrected" Ballot at Altrea Tips Votes to Management

The latest development in the case of unfair ballots favoring management at Altrea is that Broadridge has now “corrected” the language on their voter information form (VIF) for the shareowner proposal to eliminate supermajority voting requirements. However, the “correction” fails to accurately portray the proposal at all, and simply places yet another hurdle in the path of shareowners.  In fact, the new language highlights the issue of what happens to blank votes and, once again, calls into question why VIFs are, according to Broadridge, exempt from the rules that apply to proxies… although, at least with the corrected VIF, Broadridge included an explanatory letter and the full text of the proposal.

I see two primary issues. First, the rules that apply to proxies should also apply to VIFs.  If VIFs go out to about 1/3 of the total number of shareowners and the rules don’t apply to them, then the SEC appears to sanction the treatment of these shareowners as second class citizens, in comparison to those who receive actual proxies.  (I don’t know the actual proportion going out as VIFs, but 1/3 seems like a reasonable guess.)

Under Broadride’s interpretation, VIF’s don’t have to be clear and impartial and they don’t have to warn about turning blank votes into votes for management. I’m told that Broadridge “tries” to summarize the issues but if that can’t be done easily, they put a general statement on the VIF, referring the shareowner to the proxy materials.  Of course, most retail shareowners don’t read the VIF… even fewer read the proxy materials. I have asked the SEC for clarification on whether or not proxy rules apply to VIFs.

Second, if the SEC finds their rules do apply to VIFs, that takes care of the issue of the “clear and impartial.” Additionally, at least more voters would be alerted to the fact that blank votes will be counted as votes in favor of the position taken by the company’s soliciting committee because warnings will have to be in bold-type, instead of in micro-type footnotes.

However, I would argue that Rule 14a-4(b)(1) still needs to be changed.  Just as the SEC finally agreed to abolish the practice of “broker voting,” because a non-vote isn’t necessarily a vote for management, the SEC should also amend 14a-4(b)(1) so that blank votes are counted as blank votes, not as votes in favor of the position taken by the company’s soliciting committee.

I previously discussed other cases when I filed a petition with the SEC last year to stop blank votes from turning into votes for management and when posted Investors Against Genocide Fighting American Funds, Broadridge and Vague SEC Requirements: More Problems Solved Using Direct Registration.

For those of you who are new to the issues, let me briefly illustrate them with the current case of the shareowner proposal at Altera.  SEC Rule 14a-4(a)(3) states the proxy “shall identify clearly and impartially each separate matter intended to be acted upon, whether or not related to or conditioned on the approval of other matters, and whether proposed by the registrant or by security holders.” Broadridge claims they don’t have to follow the rules required for proxies because they use a Voter Information Form (VIF), not a legal proxy.

John Chevedden submitted a proposal to Altera, asking them to end supermajority voting requirements. His resolved language read as follows:

Shareholders request that our board take the steps necessary so that each shareholder voting requirement in our charter and bylaws, that calls for a greater than simple majority vote, be changed to a majority of the votes cast for and against the proposal in compliance with applicable laws. This includes each 80% supermajority provision in our charter and bylaws.

Broadridge “made a mistake” and represented the proposal on the VIF, which most retail shareowners got, as follows:

TO CONSIDER A STOCKHOLDER PROPOSAL REQUESTING THAT BOARD TAKE THE STEPS NECESSARY SO THAT EACH STOCKHOLDER VOTING REQUIREMENT IN ALTERA S CERTIFICATE OF INCORPORATION.

In an April 1, 2010, letter to the SEC and Altera, Chevedden complained that voting would not be accurate with such a description of his resolution. On April 2nd, I posted an article entitled Abusive Practices Continue as VIFs Tilt Voting in Favor of Management and urged readers to bring this abusive practice to the attention of the SEC’s Investor Advisory Committee through use of their online comment form.

On April 9th, I heard from Timothy Smith of Walden Asset Management that Broadridge had acknowledged the error was sending out a corrected VIF.  I was able to confirm this with a Broadridge representative. However, later that day I received an e-mail from John Chevedden with the “corrected” ballot language that now appears on the new VIF. The ballot language now reads as follows:

A STOCKHOLDER PROPOSAL REQUESTS A CHANGE TO ALTERA’S VOTING REQUIREMENTS, SEE PROXY STATEMENT FOR FURTHER DETAILS.

I was told that Broadridge uses this general language when they can’t easily summarize a shareowner proposal. I would like to give Broadridge the benefit of the doubt and call the first translation an error, but it is hard to believe they couldn’t easily summarize the shareowner proposal even on their second attempt when it was brought to their attention how they had butchered the ballot statement for a proposal to eliminate supermajority requirements.

Anyone vaguely familiar with the issue could have easily summarized the proposal as “Eliminate supermajority voting provisions.” There have been dozens of submissions of this proposal, so it is hard to believe that Broadridge can’t figure out how to abbreviate the resolution for the VIF. Way back on 7/20/2007, the RiskMetrics Group Governance Blog posted an article entitled,  Strong Support for Defense Limits, which included the following:

Investor support remained high for proposals that ask companies to eliminate supermajority requirements to approve bylaw changes and other matters. These resolutions have averaged 67.2 percent across 21 meetings, about the same as the 2006 average of 67.8 percent.

Are we really to believe that Broadridge can’t easily figure out how to abbreviate a resolution to eliminate supermajority requirements… essentially the same resolution that has been submitted for years and years to dozens and dozens of companies… even after it has been brought to their attention that the resolution involves ending supermajority requirements?

Referring shareowners back to the proxy statement, as Broadridge has done in their “corrected” ballot, essentially disenfranchises shareowners. Most will conclude the opportunity cost of going to the proxy to read the language probably exceeds the expected benefit of an informed vote. Most will rationally remain uninformed and leave that item blank. Of course, if they do leave that item blank, the proxy will then be automatically changed and counted as a vote in favor of the position taken by the company’s soliciting committee… as a vote against the shareowner proposal.

Isn’t it interesting how the inability of Broadridge to “clearly and impartially” identify “each separate matter intended to be acted upon,” as required by SEC Rule 14a-4(a)(3) for proxies, seems to work in management’s favor? Broadridge has seen proposals to end supermajority requirements over and over again for years, but they are still not sure how to abbreviate such proposals for the VIF.

Their inability to understand a simple straight-forward proposal means many more shareowners will leave that item blank. Since Rule 14a-4(b)(1) allows blanks to be filled in as recommending by the company’s proxy soliciting committee, Broadridge’s apparent ineptitude works in favor of management.  And isn’t it becoming difficult to believe these errors are truly simple mistakes?

The SEC should rule that all requirements for proxy statements, such as Rule 14a-4(a)(3), also apply to VIFs. Additionally, the SEC should move to amend Rule 14a-4(b)(1) so that blank votes are counted as blank votes, not as votes in favor of the position taken by the company’s soliciting committee. Let’s put an end to what essentially amounts to rigged voting in corporate elections.

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Apache vs. Chevedden Takes Dramatic Turn

The drama of a retail investor fending off a sweeping lawsuit by a $33 billion corporation took a dramatic turn today, as the United States Proxy Exchange (USPX) intervened, filing an amicus curiae (friend of the court) brief in Federal District Court in Houston.

John Chevedden, a retail investor and champion of shareowner rights, is known for filing insightful shareowner proposals, which frequently win majority votes at shareowner meetings. Over his career, he has filed more than a thousand. Corporations, viewing his populist form of corporate governance as an irritant, have tried to shut him down before. None, however, has done so as aggressively as Apache Corp, which filed suit against Chevedden earlier this year.

The lawsuit is in response to a shareowner proposal Chevedden filed to be voted on at this year’s Apache Corp. annual meeting. Apache is seeking a decision in federal court that they may ignore the proposal, and they are asking the court to force Chevedden to cover their legal expenses. (Apache’s Brief on the Merits)

Largely frivolous, the suit centers on a poorly written SEC rule about how to document share ownership for the purpose of submitting a proposal. Chevedden followed standard procedure accepted by shareholders and corporations over many years. He forwarded to Apache a letter from his broker confirming he had held at least $2,000 of Apache stock for a year. Apache did not accept that. Technically, SEC Rule 14a-8 says that a beneficial shareowner can prove ownership by submitting “to the company a written statement from the ‘record’ holder of your securities (usually a broker or bank) verifying that, at the time you submitted your proposal, you continuously held the securities for at least one year.”

Apache’s lawyers have advanced the position—contrary to standard practice followed with shareowner proposals for years—that a letter from a shareowner’s broker is not acceptable evidence of share ownership. They define the term “record holder” so narrowly that it would be largely impossible for proponents of shareowner resolutions—even large institutional investors—to ever actually “prove” they own shares. This leads quickly into murky questions of what it actually means to “own” shares and how one might go about proving such ownership.

The questions aren’t academic. An adverse ruling in the case could shut down most shareowners’ ability to file proposals. With Chevedden representing himself against a high-priced Houston law firm, an adverse ruling was highly likely.

That outcome became more remote today with the filing of the USPX amicus curiae brief. The brief is a tour de force, exploring all aspects of the at-issue SEC rule—its history, practical implications, accepted interpretation and treatment in recent SEC staff legal bulletins and no-action letters.

James McRitchie, who publishes the CorpGov.net blog, helped write the brief. Glyn A. Holton, executive director of the USPX, was the lead author. McRitchie commented today

Wow!  I’m so proud to be a signatory to this brief … I feel almost like it is part of the Declaration of Independence or something. A $33 billion company… able to hire the most expensive attorneys in the world and our side with no legal counsel …

The clock is ticking. Apache Corp has to send their proxy materials to be printed soon, and the lawsuit must determine if Chevedden’s proposal will be included. Apache’s lawyers will be scrambling this weekend to prepare a response to the USPX brief by Monday. Trying to continue with a frivolous lawsuit in the face of a compelling brief from the USPX, it is not clear what they can accomplish. This may turn into one of those rare events where a small retail investor turns the tables on a large corporation and their expensive lawyers … and actually wins. We will find out in a few days. For further information, please contact USPX Executive Director Glyn A. Holton at 617.945.2484 or [email protected].

OK, so maybe the quote from me was a little over the top, but I really do feel that corporations, run largely by management – not by regular employees or shareowners, have too much control… especially after Citizens United. Let’s hope the judge has enough sense to recognize this case as a SLAPP suit aimed at intimidating shareowners. I’m not ready to roll over and play dead!

In contrast to Apache, whose CEO, G. Steven Farris, argued to the SEC that non-binding resolutions should be banned outright, when AmerisourceBergen received a 2010 proposal from Ken Steiner on the same topic as the one Chevedden proposed at Apache (eliminating all supermajority vote requirements), they put the proposal on the ballot as a binding company proposal and it was approved by shareowners on March 4, 2010. (AmerisourceBergen Re-Elects Three Board Members and Reaffirms Fiscal 2010 Expectations at Annual Meeting of Stockholders, Press Release, 3/4/10)

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