Citigroup Inc. (Citi, NYSE: C), a diversified financial services holding company, provides various financial products and services for consumers, corporations, governments, and institutions worldwide. Citi is one of the stocks in my portfolio. ProxyDemocracy.org had collected the votes of three fund families when I checked and voted. Their annual meeting is coming up on April 25, 2017.
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International Business Machines Corporation (NYSE: IBM) provides information technology (IT) products and services worldwide. IBM 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 April 25, 2017. I voted FOR Proxy Access, Special Meeting amendments and report on lobbying. See how and why I voted these and other items below. I voted with the Board’s recommendations 42% of the time. View Proxy Statement (index on page 4). 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 →
Apple 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 →
Stewart Information Services has become the 13th U.S. company to fail to win majority support during a “say on pay” vote this year…
Investors also withheld majority approval from a compensation committee member, W. Arthur Porter, and withheld more than 44 percent support from four other directors… While the small-cap company has lagged its industry peers over the past one- and three-year periods, the total pay for both CEOs increased approximately by 30 percent year-over-year, predominantly due to increases in base salary, time-based restricted stock grants, and a $319,000 non-equity grant when no such grant was awarded in 2009. Each executive also received a $100,000 discretionary bonus in fiscal 2010.
via A 13th Investor Protest Over Executive Pay – Governance., RiskMetrics Group, May 4
Shareholders of Australian public companies have been having their say on pay by law since 2005. The Australian Parliament is currently considering amendments to its say on pay rules that are aimed at increasing the impact on companies of significant shareholder votes against.
The ‘two-strikes’ test is a key proposed change included in the Corporations Amendment Bill 2011 (the Bill). If 25% or more of all shareholder votes are cast against a company’s remuneration report, this ‘first strike’ requires that the company respond to the negative vote in the following year’s compensation report…
The Bill requires that strike two triggers a shareholder vote within the meeting to decide whether the directors must stand for re-election. The vote on director reelection is called a ‘spill resolution’, If the director re-election resolution is supported by 50% or more of votes cast, the directors must stand for re-election at a “spill meeting” within 90 days…
A review of the comments that were submitted reveals that although the requirement that companies respond to the first strike was generally well received, the board spill resulting from a second strike was almost universally panned by investors and corporate spokespersons alike. The thrust of much of the opposition to spill votes was that director elections should not be triggered by fewer than 50% of shareholder votes. (Australia proposes ‘say on pay’ enhancements – SHARE – Shareholder Association for Research and Education)
Generally, I find myself coming down on the side of empowering shareowners at just about every turn. However, I agree this Australian measure would go too far. A second 25% vote could trigger a second report but I don’t think anything less than a rejection by a majority of shares voted should trigger a vote to “spill” the board. McRitchie, defending the rights of entrenched boards, who would have dreamed?
Sparton will hold its annual meeting in Schaumberg IL on October 27, 2010. Proposals to be voted on include two that further improve Sparton’s corporate governance to best practices as follows:
- Proposal #3 includes the adoption of a Majority Voting standard for election of directors, and
- Proposal #4 includes the de-classifying (de-staggering) of Sparton’s board where all directors will be elected annually for 1 year terms, starting in 2011.
Lawndale Capital Management, Sparton’s largest shareholder, will be voting FOR both of these good governance proposals. Both deserve the support of all shareowners. (Disclosure: Publisher James McRitchie is an investor in Diamond A Investors L.P., a group member with Lawndale Capital Management Inc.)
As can be seen from the list of stocks I own, I don’t have any direct investments in Coca Cola (KO). However, I do have indirect holdings through my pension at CalPERS and through several mutual funds and a strong longstanding concern about the safety of Bisphenol-A (BPA), a chemical used in the epoxy lining of Coca-Cola’s canned beverages.
Domini Social Investments, As You Sow, and Trillium Asset Management Corporation filed the first shareowner proposal focused solely on BPA at Coke, asking for a study updating investors on how the company is responding to the public policy challenges associated with BPA, including summarizing what the company is doing to maintain its position of leadership and public trust on this issue, the company’s role in adopting or encouraging development of alternatives to BPA.
Scientific studies indicate that BPA is an endocrine-disrupting chemical that mimics estrogen in the body. Numerous animal studies link BPA, even at very low doses, to changes in brain structure, immune system, and male and female reproductive systems changes. A recent study in the Journal of the American Medical Association links BPA exposures in humans to cardiovascular disease, diabetes, and liver enzyme abnormalities. Health Canada, a Canadian federal agency has warned that BPA can leach into beverages.
Manufacturers of baby and sports bottles have been eliminating BPA-containing plastics from their product lines. Eden Foods has been using BPA-free cans since 1999 and General Mills recently announced that the company will offer alternative can linings that do not use BPA for their organic canned tomatoes, so substitutes can be found.
There are additional shareowner proposals on the ballot seeking an advisory vote on executive pay, requiring an independent board chairman and performance-based equity awards. All should be supported. I’m delighted that CalPERS is voting in favor of all the resolutions and is also withholding votes from directors B. Diller and J. Wallenberg for serving on too many boards.
Need more voting advice on Coke? Check out ProxyDemocracy.org.
I found no advance voting recommendations or advocates regarding Berkshire Hathaway from either ProxyDemocracy.org or MoxyVote.com. No items were on the proxy other than election of directors. There seems to be a slight glitch on MoxyVote.com, since it only appeared to allow voting in favor of all director candidates or withholding. That wan’t a problem for me. I went ahead and voted for all as recommended by management.
For Scripps Networks Interactive, ProxyDemocracy.org only had the votes of Florida SBA. I aligned my vote with them, withholding from Dale Pond and Ronald Tysoe. In most instances, I trust Florida SBA so knowing their vote made mine easy… although it would be even better if I knew why they withheld their vote from these nominees. For me, this was a case of strictly voting on brand reputation. (see Latham’s Proxy Voting Brand Competition, 1/27/07)
First I checked MoxyVote.com and noticed the voting deadline is 4/19/2010, so I stopped procrastinating. I didn’t see any voting advice there, so I looked at ProxyDemocracy.org. Two funds listed there didn’t vote. The funds that did vote, voted for all items, including my resolution to reduce supermajority voting requirements. I’ll do the same, including voting for my own resolution.
I added a link to the bottom of the page at ProxyDemocracy.org so that readers can easily pull up a copy of my resolution. Hat tip to John Chevedden for his help and advice on this one. Oh, I did check CalPERS, especially since they often provide a reason as to why they are voting the way they do, but they hadn’t announced their vote yet as of this post. Of course, I voted using the MoxyVote.com voting platform.
ProxyDemocracy.org was very helpful, with several funds reporting their votes in advance. Also very helpful was CalPERS’ site, which provided reasons for their votes. I voted for most of the directors, along with most of the funds who reported voting in advance on ProxyDemocracy. However, I joined with CalPERS in withholding my vote from the following two, since I found CalPERS’ reasons compelling:
Director Andrew N. Liveris – I joined with CalPERS in voting against Liveris, since he served as members of the audit and risk committee prior to the financial crisis when there was a failure to ensure appropriate corporate governance practices pertaining to risk management were in place. Additionally, Mr. Liveris is a current CEO while serving on an excessive number of public company boards.
Director Judith Rodin – Like Liveris, he served as members of the audit and risk committee prior to the financial crisis when there was a failure to ensure appropriate corporate governance practices pertaining to risk management were in place.
Along with most of the funds, I voted to ratify the auditors, support the omnibus stock plan, and approve TARP repayment shares. I voted against the Advisory Vote to Ratify Named Executive Officers’ Compensation, since CalPERS believes the company does not adequately disclose the process by which executive compensation is determined.
Along with most of the funds, I voted to Amend NOL Rights Plan (NOL Pill). Generally, I vote against such plans, but CalPERS believes the poison pill is in shareowner best interest. Additionally, the company has indicated the adoption is not for anti-takeover purposes.
I joined with the funds to Approve Reverse Stock Split. I voted with most of the funds in favor of Affirm Political Non-Partisanship, a proposal by Evelyn Y. Davis. CalPERS voted against it. They believe the proposal is unnecessary because Citigroup indicates it adheres to all state and federal regulations on this matter. That doesn’t seem like a convincing reason to me but I’m not very firm in my support. In glancing at the proposal, it may well be that everything in the resolution is already covered by law. If so, it does no harm to vote in favor of it.
Along with most of the funds, I voted in favor of all the shareowner proposals. Report on Political Contributions, by the Firefighters’ Pension System of the City of Kansas City. CalPERS believes this proposal poses no long-term harm to the company. According to MoxyVote.com, the Center for Political Accountability also supports this proposal.
Report on Collateral in Derivatives Trading, by the Sisters of Charity of St. Elizabeth. CalPERS believes this proposal poses no long-term harm to the company. It seems to me this has the potential to reduce risk. That’s better than posing no long-term harm. In fact, if shareowners had listened to the Sisters of Charity and members of the Interfaith Center on Corporate Responsibility there is a good chance we would have missed the Great Recession. See this 2008 press release about ICCR sounding the alarm for 15 years. Why weren’t shareowners and management listening? Rev. Seamus Finn, director, Justice, Peace & Integrity of Creation, Missionary Oblates of Mary Immaculate and an ICCR board member, said:
The U.S. government controls over a quarter of outstanding Citigroup shares today. It has an extraordinary opportunity here to send a clear message to Wall Street that more derivatives disclosure is vital. Even more to the point, the Treasury Department really has no choice other than to support our resolution since a failure to do so would directly undercut its campaign for critical financial reform.
ICCR Executive Director Laura Berry said:
To adopt an inconsistent posture at this critical juncture on derivatives disclosure would be disastrous both in terms of how Wall Street reads the signals from Washington and how seriously Congress sees the Obama Administration as being in its support of vital financial services reform. (Shareholders: Treasury Should be Consistent on Capitol Hill and on Wall Street by Voting Citi Shares for More Derivatives Disclosure, press release, 4/16/2010)
Ability to Call Special Meetings, by William Steiner. CalPERS believes shareowners should be able to call special meetings. So do I. I’ve even submitted proposals myself on this issue and, like William Steiner, I often work with John Chevedden on these submissions.
Proposal Regarding Stock Retention, by AFL-CIO. CalPERS is a firm supporter of stock ownership guidelines that require executives to satisfy minimum levels of ownership after leaving the company. It should be noted the proposal mandates that executives hold 75% of their equity awards for two years after retirement or termination. CalPERS prefers that guideline specifics be designed and implemented through the company’s Independent Compensation Committee. I favor holding most equity awards until after retirement.
Shareholder Proposal Regarding the Reimbursement of Expenses in a Contested Election, by AFSCME. CalPERS believes this proposal poses no long-term harm to the company and would be a benefit to shareowners. I think this proposal could increase the ability of shareowners to have additional influence on nomination and election of directors.
I voted using MoxyVote.com. I you agree or disagree with my votes, you can leave comments here on CorpGov.net or on my wall at MoxyVote, search James McRitchie. If you use ProxyDemocracy, keep in mind that you can post how you’ve voted or any other advice regarding a company right on the site. For and example, see the bottom of the Citigroup page. When it becomes technologically feasible, it would be great if sites like MoxyVote and ProxyDemocracy can tell users who sponsored each resolution. Having to look that information up on the proxy takes an extra minute or so. Just as many will vote with various funds because of their “brand” reputation, we will also vote based on the brand of the sponsor.
We Own You!: How technology can help stockholders take control of the corporations they own, Slate.com, 1/12/10. Eliot Spitzer writes, “Twitter, text messages, YouTube, and other technology transformed politics in 2008. This success raises a compelling question: Can the same technology awaken the more dormant world of corporate democracy?… Could proxy voting in 2011 generate the same enthusiasm as actual voting did in 2008?” It just might if we can get a few people with Spitzer’s star power to focus attention.
Good to see Eliot Spitzer talking up use of ProxyDemocracy.org, MoxyVote.com and Shareowners.org. He gets his facts slightly wrong, Both ProxyDemocracy.org AND MoxyVote.com intend to be neutral information providers. MoxyVote.com labels its information sources as “advocates” but that doesn’t mean MoxyVote.com agrees with them.
Both work on the concept of trusted brands to help shareowners vote more easily and more intelligently. In the case of ProxyDemocracy.org, their “respected institutional investors” spend considerable resources investigating not only resolutions but also director nominees. By announcing their votes in advance, they allow retail shareowners to benefit from their research and they create brands with a larger following than they would have voting alone.
Spitzer says there are at least two critical hurdles that still have to be overcome:
- “First, most shareholders don’t vote because they assume their votes don’t matter; shareholder votes are almost never close.” However, this year that is changing. With most of the Fortune 500 using majority vote requirements to elect directors and with “broker votes” no longer allowed when retail shareowners fail to vote within 10 days of the annual meeting, your vote counts more than ever. We are sure to see several directors turned out of office. That doesn’t stop them from replacing tweedle dee with tweedle dum, but its a good start.
- “There is no water cooler for corporate democracy. A presidential or mayoral race prompts conversations among friends and colleagues and generates daily press coverage. A corporate proxy vote doesn’t. We don’t all own the same shares, and even if we did, we probably wouldn’t talk about it.” That’s where sites like Shareowners.org and my own blog come in. People should be talking about how they are voting. It would be great to have TV shows like the Nightly Business Report actually providing analysis of the issues facing owners, rather than tips for the next bet. If PBS doesn’t do it, Spitzer could do it through Slate.com.
Of the two problems, the second is more important. When shareowners start talking to each other about how they’re voting, more will vote… and, more will vote intelligently. We will also start taking on more of the issues that currently send the system off balance.
For example, this morning I received a copy of a letter from Goldman Sachs to the SEC referencing my resolution to allow shareowners to ask the board to amend the bylaws, allowing owners of 10% of the company’s stock to call a special meeting. Management at Goldman Sachs wants to omit the resolution from the proxy on the basis that they intend to submit a proposal to the 2010 annual meeting to allow shareowners of 25% to hold a special meeting.
They argue that Rule 14a-8(i)(9) allows them to exclude the proposal from its proxy, since the proposal directly conflicts with their proposal. In the past, the SEC has allowed such exclusion based on confusion that would reign if shareowners passed both resolutions. That is nonsense. If both pass, the lower threshold applies. If we can ever get the “water cooler” discussions going around corporate democracy, shareowners won’t stand for a system that tips the balance of power to management at every turn. We will see if the SEC under Mary Schapiro acts to protect shareowners by allowing the resolution, or if they protect management by issuing a “no action” letter.
“Street name registration” undermines our culture, turning investors into gamblers by providing them “security entitlements,” instead of real ownership rights. Just as poker chips allow us to play under rules which often favor the house, those holding “security entitlements” do not acquire the rights of share owners. For example, one right sharowners have is to receive a proxy, whereas those of us registered in street name receive a voter instruction form (VIF). SEC rules guarantee certain rights to proxy holders but not, it is argued, to those voting through VIFs. (see
Investors Against Genocide Fighting American Funds, Broadridge and Vague SEC Requirements: More Problems Solved Using Direct Registration.
On January 13th I will post a draft petition to the SEC that I have been working on with Glyn Holton, of the United States Proxy Exchange, and others to convert from “street name” to a system of direct registration. I hope you will consider signing on as a co-filer. Can we change voting behavior? Yes, we can! Just give us the rights of ownership and see how democracy transforms the world of corporations.