News Archive: March 2010

ProxyDemocracy News

March 29, 2010 at 10:29 AM

Shareholders have brought forward more than 40 resolutions this year to pressure companies on their management of natural resources. Many  focus on gas fracturing and coal combustion waste. ProxyDemocracy continues its presentation of reports on key social and environmental issues coming before voters this proxy season. The Sustainable Investments Institute produced the series.

March 23, 2010 at 09:51 AM

More than 25 shareholder resolutions have been filed this year on the issues of workplace and board diversity. We continue our series of special reports on proxy ballot initiatives, produced by the Sustainable Investments Institute.

March 22, 2010 at 09:44 AM

Shareholders and human rights advocates, seeking to hold companies accountable for operations in countries such as China and Burma, have introduced more than 30 resolutions for consideration at this spring’s annual meetings. A report published in partnership with the Sustainable Investments Institute.

March 18, 2010 at 12:02 PM

Even before the U.S. Supreme Court’s decision in the Citizens United case, activist investors filed five dozen resolutions seeking to require publicly traded companies to disclose their contributions to advocacy groups and trade associations.  See this report by the Sustainable Investments Institute.

March 17, 2010 at 10:35 AM

"Investing is about more than just making money," according to Motley Fool. "You're also buying partial ownership of a company, with all of the rights and privileges that go with it." Motley Fool's David and Tom Gardner cite ProxyDemocracy as a guide to voting your proxy ballot.

March 17, 2010 at 10:03 AM

The Sustainable Investments Institute (SI2), a Washington-based nonprofit research group, has produced a series of reports on social and environmental issues that shareholders will vote on this proxy season. ProxyDemocracy is pleased to present the first SI2 report, on climate change.

March 5, 2010 at 20:36 PM

"What would happen if all the small investors banded together and cast their ballots during proxy season ...?" the New York Times asks in a article that cites the contribution of ProxyDemocracy in educating shareholders. 

Around the Web

BP has scored a twin success in its battle to block a shareholder resolution that raised doubts about its proposed investment in Canada’s oil sands, with a group of local authority investors and a leading advisory service recommending a vote against the move.

Corporate political contributions, pay disparity, and board diversity are among the top social issues for the 2010 U.S. proxy season. Investors have filed more than 200 proposals on social issues, which also include human rights, sexual orientation discrimination, and Internet neutrality.

Activists and social investors have renewed hope that legislation on climate change and financial reform will win passage in Congress. In addition, decisions by the Securities and Exchange Commission have raised the possibility of success of many shareowner resolutions this proxy season.

How can we bring rationality back to executive compensation at U.S. public companies? We have to disentangle Wall Street, corporate America and the federal government, writes John Wilcox, the chairman of Sodali. He is also a director of and the former head of corporate governance at TIAA-CREF.

Struggling movie rental company Blockbuster Inc. will ask its shareholders to vote on a reverse stock split at its upcoming annual meeting.

Sprint Nextel Corp. is looking to offer limited relief to employees holding functionally worthless stock options, according to proxy materials filed with the Securities and Exchange Commission.

After the U.S. financial crisis, this proxy season may be different than its predecessors. With shareholders more awake and aware than they've been in years, they could begin to fundamentally change managers' attitudes.

Waddell & Reed Financial Inc. told shareowners that giving them an advisory vote on executive pay could put the company “at a serious competitive disadvantage and could erode the value'' of their investments. More than 60 companies have agreed to say-on-pay votes. Half of Waddell & Reed voters favored such a plan last year.

A shareholder resolution to require Starbucks Corp. to improve its recycling efforts took 11 percent of the vote at the annual corporate meeting in Seattle. Activists hope the result will get the coffee-shop company's attention.

KBR Inc. will issue a report on the environmental and social impact of its business.The move comes after New York Comptroller Thomas DiNapoli, who oversees the state’s $129 billion pension fund, filed a shareholder resolution last year requesting the report. DiNapoli withdrew the resolution after KBR agreed to release the report.

Total compensation for U.S. chief executive officers shrank by 8.6 percent last year, according to data compiled by Bloomberg BusinessWeek. Boards offset some cuts in stock awards and options by boosting CEO salaries and bonuses, the data show.

The Securities and Exchange Commission ratcheted up corporate disclosure on climate change. The SEC didn't pass judgment on whether the climate is changing, but said companies must meet investors' demands for carbon emissions and other climate risk data—and that such disclosures may no longer be considered voluntary.

A fight is brewing for a board seat at CPEX Pharmaceuticals Inc. The company's directors recommended Robert Forrester, a former drug industry executive, for the seat, which is also being sought by Richard S. Rofe of Arcadia Capital Advisors. Rofe's firm owns about 10 percent of CPEX stock.

As U.S. Senate negotiators continue to toil toward a bipartisan deal on financial reform, one issue that will continue to divide the two sides is a provision to allow minority shareholders to nominate their own candidates to a company’s board of directors.

Companies are meant to be small-scale democracies, and technology is making it easier for investors to participate in proxy votes, says. It points out that ProxyDemocracy's tools help stockholders decide how to vote and tells mutual fund investors how their managers cast ballots.

Lawmakers trying to avert the next Wall Street bailout are struggling to reach consensus on how to overhaul the country's financial regulatory regime. One sticking point has been a proposal to let the Securities and Exchange Commission give shareholders more say over who gets elected to boards of directors.

Shareholders of Starbucks Corp., the world's largest coffee-shop chain, will vote on whether to take more steps to recycle its bottles, cans and cups and to increase the recycled content in containers.

Executive compensation is important to consider when evaluating an investment opportunity. Executives who are improperly compensated may not have the incentive to perform in the best interest of shareholders, which can be costly for those investors.

DuPont Co. has discovered a new formula for fending off shareholders who want a voice in how the chemical giant compensates its top bosses: Get an outside second opinion.

Investor groups have launched a two-pronged battle against lax corporate governance they say precipitated the financial crisis. On one front, shareholder advocates are pressuring banks themselves; on another, they are pushing lawmakers to give shareholders more power to nominate directors to run against management-backed slates.

The Securities and Exchange Commission in January voted for new "interpretive guidance" instructing publicly traded companies to tell investors how operations will be affected by any climate-change rules. Securities lawyers now say the shape and timing of U.S. climate policy is so uncertain that it's impossible for companies to make such calculations.

Green Century Capital Management and As You Sow filed shareholder resolutions calling for utilities to disclose how they will address the risks associated with coal ash. They believe the storage and reuse of coal ash could have broad consequences for the environment and shareholders.

This proxy season may be a little different. Investors may actually have a fighting chance to shake up their least-favorite companies. Internet voting has made the laborious process of voting shares much easier and big fund firms are budging from their passive stance.

Rich Ferlauto, now with the Office of Investor Education and Advocacy at the Securities and Exchange Commission, and Simon Billenness, a longtime activist with the Sierra Club, are honored by Moxy Vote as pioneers of corporate governance and shareholder advocacy.

Hewlett-Packard Co.'s shareholders have approved a proposal that gives them a voice in executive compensation. The say-on-pay vote, which will be nonbinding, is set to begin at the 2011 shareholder meeting.

"This year could be a watershed for the dissidents looking to shake up companies," columnist David Weidner writes. "Technology has made it easier for shareholders to come together and vote" in greater numbers and with more coordination than ever. 

After fumbles at Bank of America and Lazard, CEO succession planning is on many shareholders’ minds. The Laborers' International Union of America is sponsoring resolutions that call for the adoption and disclosure of written, detailed CEO succession policies.

Richard J. Sandler , a partner at Davis Polk & Wardwell LLP, reviews financial reform legislation proposed by U.S. Senator Christopher Dodd.

Goldman Sachs Group Inc. lost its bid to exclude a proposal on executive compensation from its upcoming annual proxy filing, according to a response from U.S. securities regulators. commended U.S. Senator Christopher Dodd's financial reform legislation. The group praised provisions that would give investors the right to place director nominees on a company's proxy and require annual advisory votes on executive pay.

The California Public Employees’ Retirement System voted to ease limits on the number of shareholder proposals its staff can pursue as it prepares to challenge the way some companies elect directors.

Cedar Fair LP postponed its unitholder meeting until April 8 to solicit more votes, giving unitholders time to consider a $2.4 billion merger.

General Mills Inc. shareholders will voice their opinions on executive pay -- in even-numbered years. Investors last fall passed a say-on-pay resolution, seeking an advisory vote at each annual shareholders meeting. The General Mills board has agreed to allow a vote on executive compensation, but not every year.

Senate Banking Committee Chairman Christopher Dodd unveiled his plan to overhaul the rules governing financial institutions. The package would give shareholders the right to cast nonbinding votes on executive pay packages.

Much coverage of Berkshire Hathaway’s 2010 proxy statement was devoted to low compensation provided to Warren Buffett. Less attention focused on what the company's policies will mean for his eventual successor.  

For years, Apache Corp. and other companies furiously tried to fend off shareholder proposals filed by California retiree John Chevedden. His resolutions have been ubiquitous, cropping up in the proxy filings of General Electric, Bank of America and Ford. A judge's ruling in the Apache case can be seen as a victory for the little guy.

While a federal judge ruled for Apache Corp. in its lawsuit against retail activist John Chevedden, shareholder advocates are praising the judge's decision as a win that will help investors in future disputes with companies over investor resolutions.

Christopher Dodd, chairman of the Senate Banking Committee, will unveil a proposal to revamp the nation’s financial regulations that would empower shareholders to have advisory votes on executive pay and to nominate directors for the boards of public companies through company proxy ballots.

Black & Decker Corp. landed in trouble with the New York Stock Exchange over how its board determined the independence of a director who owns a real estate development with the tool maker's chief executive.

The California Public Employees’ Retirement System, the biggest state-run U.S. public pension, may use its financial clout to force BlackRock Inc., News Corp. and other companies where it has large holdings to change the way they elect directors

After the Supreme Court's ruling on political spending, Vanguard Group founder John Bogle recommends this resolution for each public company's proxy ballot: That the corporation shall make no political contributions without the approval of the holders of at least 75 percent of its outstanding shares.

A simple change in the way public companies are governed will reduce turmoil in board elections and confusion in investment decisions. The answer is to mandate that corporations let stockholders vote annually on whether they want the company to exercise the rights the Supreme Court's Citizens United ruling gave them to get into political races.

Environmental questions are receiving a lot of attention from shareholders during the spring proxy season, including 39 resolutions about global climate change. Other key concerns include the toxicity of consumer goods; the effect of extracting natural gas on U.S. aquifers; and the quality of corporate reporting on environmental issues.

The Initiative for Responsible Investment has moved from Boston College to Harvard University's Kennedy School of Government. The initiative's projects the practice and value of corporate social responsibility investing; alternate theories of investment across asset classes; and the roles of investment consultants.

Shareholders of Walt Disney Co. turned down two investor-sponsored proposals, including a say-on-pay resolution seeking to institute advisory votes on executive compensation.

Greater shareholder rights are on the way. The question now is what form they will take, and what the consequences will be for publicly traded companies and their management, writes Robert Salomon of the Stern School of Business at New York University.

It could be that the movement for corporate governance reform is beginning to score some wins, if only because average citizens and small shareholders are beginning to understand that these issues can really mean something to them.

When do you know that factoring environmental, social, and governance issues (ESG) into investment and corporate decisions has gone mainstream? One clue is the agenda of the Securities and Exchange Commission's Investor Advisory Committee, whose members include ProxyDemocracy director Mark Latham.

In Apache v. Chevedden, Apache’s court brief says: “When it comes to shareholder proposals, Apache is the ‘David’ and Chevedden is the ‘Goliath.’” That seems strange coming from a $33 billion market cap company.

Whole Foods Market Inc. investors approved a nonbinding proposal to make it easier to oust a director whose conduct they deem inappropriate. Amalgamated Bank's LongView Funds, sponsor of the proposal, said the vote could restore essential rights to shareholders and hand them more control.

U.S. workers are more confident about having enough savings for retirement even after the percentage of savers declined, according to the Employee Benefit Research Institute.

The Securities and Exchange Commission ruled Bank of America and JPMorgan Chase may omit proposals by the American Federation of State, County, and Municipal Employees that would change how the banks compensate their 100 highest-paid employees.

Thanks to rules introduced by the Securities and Exchange Commission, investors are pushing companies more than ever before to disclose and manage climate-related risks.

In 2009, only 95 directors out of 30,000 board positions failed to get a majority vote, according to The Corporate Library. The report also showed 702 directors were involved in a prior corporate bankruptcy or other failure; 21 were involved in more than one.

The contributions of Glyn Holton at the Investor Suffrage Movement, the Social Investment Forum's Lisa Woll and Meg Voorhes, and Nell Minow, co-founder of The Corporate Library are highlighted.

Small investors control about 30 percent of shares, and if they get their act together they can have a truly effective revolt.

Technology is helping individual shareholders get their voices heard in boardrooms — through online proxy voting. It's part of a larger movement to educate and empower shareholders online, led by sites such as ProxyDemocracy.

Encouraged by recent Securities and Exchange Commission guidance, investors have filed a record 95 shareholder resolutions on climate change issues for the 2010 proxy season. The proposals, up 40 percent from last year, were presented to some of the largest U.S. coal companies, electric power and oil producers, and home builders.

At least 56 U.S.-based companies have held voluntary say-on-pay votes or have agreed to do so. "We are reaching the tipping point,” said Timothy Smith, senior vice president at Walden Asset Management, a major sponsor of shareholder resolutions on compensation.

Shareholder landscapes trembled as advisory firm RiskMetrics Group Inc. agreed to be acquired by MSCI Inc. in a deal valued at over $1.5 billion

A classified or staggered board is one with only a certain number of directors facing reelection each year. There are several shareholder proposals seeking declassification on the 2010 ballot. They represent calls for accountability from the boards and a greater voice in the companies.

In an essay on the failures of markets and government, former New York Governor Eliot Spitzer writes: "The only way to reform corporate governance is to get the owners — the shareholders — of companies involved and actually paying attention."

Fifty-five publicly held U.S.-based companies have voluntarily agreed to hold annual advisory shareholder votes on executive compensation. That's an increase from six in 2008 and 19 in 2009.

A group of Denny's Corp. largest shareholders criticized the restaurant chain's top leaders, saying they plan to launch a proxy fight to add three of their own members to its board of directors.

As pressure mounts on mutual fund companies to improve their oversight of companies they invest in, several fund managers are taking notice. More managers are looking at proxy voting as a decision linked to shareholder value.

It is not at all clear that corporate boards should remain the main target of corporate governance reformers, writes Peter Kinder. He says accountability should not be limited to boards.

Members of the Social Investment Forum discussed possible responses to the Supreme Court's Citizens United decision, such as filing shareowner resolutions on the issue of corporate campaign contributions.

Goldman Sachs Group Inc. said it has rejected demands by shareholders to investigate the Wall Street bank's compensation practices.

Moxy Vote, the online voting platform, unveiled a video explaining the proxy process. Of course, we recommend that, before casting your ballot, you start your research here at Proxy Democracy.

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When the big-name stars of Corporate America convene this spring for the rigorously scripted dramas known as annual shareholder meetings, the cast of bit players could be smaller than in years past.

Big change sweeping the regulatory environment of U.S. corporate boards has also altered the role of mutual funds and their directors as shareholders when it comes to voting on behalf of mutual fund investors.

The Supreme Court decision in the Citizens United case threatens to open floodgates of corporate spending in political elections. What will be the impact on investors with ownership stakes in companies that may intend to take advantage of the ruling?