News Archive: February 2010

Securities and Exchange Commission Chairman Mary Schapiro has used recent appearances to spell out her expectations for full compliance with executive pay disclosure rules. And there's growing anticipation the SEC will make an example of an uncooperative company or two this proxy season.

Shareholders of Deere & Co., the world’s largest maker of farm machinery, voted against a resolution that would seek to cap the pay of its top executive.

Institutional investors that historically rubber-stamped management nominees to companies' boards increasingly are taking note of activist investors' demands and supporting their agendas, which may include monitoring executive compensation, corporate governance and operating and strategic decisions.

Executives at Disney, Verizon, and Boeing have taken flack from shareholders because of the companies’ golden parachute and golden coffin policies. Proxy season is approaching and the removal of these gilded contracts is high on shareholders’ proxy wish lists.

Wells Fargo & Co. shareholders will have a say-on-pay vote at the annual meeting in April. The vote, only the second in the bank's history, results from a review of corporate governance and regulatory trends as well as shareholder input, Wells Fargo said.

Since Brian Moynihan took over as chief executive at Bank of America Corp, he has sought to convey a flexible and cooperative attitude. The accommodating approach hasn't been extended to shareholders seeking to put proposals regarding executive pay on the ballot at the company's annual meeting.

Bank of America Corp. shareholders voted to let the company increase common shares as part of its repayment of billions in government aid, though some complained that the move will hurt the value of their current holdings.

In response to shareholder proposals, Bristol-Myers Squibb has agreed to hold a say-on- pay vote next year, while Windstream plans a vote in May.

Billionaire investor Carl Icahn notified Genzyme Corp. that he will nominate four candidates -- including himself -- for seats on its board.

A Securities and Exchange Commission investor advisory group discussed a possible back-up plan should a majority-vote provision be removed from financial reform legislation being drafted by the Senate.

The Council of Institutional Investors asked its members to lobby members of the Senate Banking Committee to keep proxy access and majority-voting provisions in the financial reform legislation the panel is considering.

A chart illustrating peak proxy season, with the help of Excel and Photoshop.

Commentary on the Supreme Court's campaign finance ruling has focused mainly on the majority opinion. Three concurring opinions have attracted less attention than they should, writes Peter Kinder.

The 2010 season is shaping up to be a doozy for proxy fights. For example, activist investor Carl Icahn has already announced his third proxy fight in as many years at Biogen Idec. Drama aside, a proxy fight is nothing less than a battle for the boardroom and strategic decision-making ability.

The Securities and Exchange Commission's Investor Advisory Committee will meet in Washington on Feb. 22. It will consider reports on proxy voting transparency; a work plan for environmental, social and governance disclosure; and financial reform legislation.

American Funds, the largest manager of stock mutual funds, sold most of its holdings in PetroChina Co. after pressure over the energy company’s investments in Sudan. Human rights group Investors Against Genocide claimed its second recent victory, after TIAA-CREF sold shares of four Chinese companies with operations in Sudan.

Individuals usually do not own stocks in corporations directly, and this exacerbates the problem of excessive executive pay, writes Moshe Adler, who teaches economics at Columbia University. 

A ruling by the Securfities and Exchange Commission is producing a "steady growth" in shareholder resolutions on climate change and financial risk, said Tim Smith of Walden Asset Management. ExxonMobil, Chevron and ConocoPhillips have been asked to report on the impact climate-related risk has on shareholder value.

The Securities and Exchange Commission pressed Bank of America Corp. during enforcement talks to give shareholders more power to oust directors, after years of struggling to pass similar rules covering all U.S. companies.

Shareholder resolutions are simply proposals put forward by investors to raise public awareness of issues and alter corporate behavior, writes Dale Wannen of Harrington Investments. Change can and does occur through advocacy.

The Federal Deposit Insurance Corporation is seeking public comment on a proposal to link bank deposit insurance premiums to the degree of risk-taking encouraged by the bank's executive compensation program. The FDIC board is split, making the public's input much more important.

The salaries of Royal Dutch Shell’s new chief executive and finance head will be 20 percent lower than those paid to their predecessors under a proposal  by the chairman of Shell’s remuneration committee. Sixty percent of shareholders voted against a pay deal for Shell’s bosses at last year's annual meeting.

Morgan Stanley was sued by two pension funds that allege the world's biggest brokerage made improper compensation and bonus payments.

The list of the biggest earners in finance usually reads like a Who’s Who of Wall Street. These days it reads more like a Who’s That? Some of the highest-paid financial executives work at companies that have largely avoided the outcry over the return of hefty pay days on Wall Street.

President Obama said he doesn’t “begrudge” the bonuses awarded to the chief executives of JPMorgan Chase and Goldman Sachs, noting that some athletes take home more pay. Obama reiterated his call for shareholders to have a say in CEO compensation, calling it a "restraint.''

Corporate-governance issues such as say-on-pay and proxy access gained traction after the worst economic downturn since the Great Depression. Samuel Wolff, a partner at law firm Akin Gump, looks at the upcoming proxy season.

After questioning by investors, Morgan Stanley's board is expected to approve a nonbinding say-on-pay proposal that would be included on the next shareholder proxy statement.

An effort by activist shareholders to prod companies to disclose political contributions is taking on new urgency following last month's Supreme Court decision loosening restrictions on corporate political spending.

USA Technologies Inc. and dissident shareholders have settled their their proxy fight. Two shareholder nominees will serve on the company's board.

All publicly traded companies should be required to give shareholders a way to influence the composition of their corporate boards, a top Securities and Exchange Commission official said.

JPMorgan Chase and American Express agreed to adopt an advisory vote on executive compensation as part of their proxy statements for their 2010 annual meetings, according to Calvert Asset Management.

TIAA-CREF, the manager of $400 billion in assets, issued a report calling on institutional shareowners to take a more active role in corporate governance. 

The Florida State Board of Administration opposed management recommendations in more 31 percent of proxy-voting issues at 3,383 public companies in the year ended June 30, according to its annual corporate governance report. 

After the U.S. Supreme Court decision permitting corporate political donations, shareholders’ ability to have transparency on those donations has become critical.

Asserting that excessive corporate political spending reduces shareowner value and weakens governance, shareowner advocates call on corporations to adopt a framework for disclosure.

For those concerned about corporate governance or corporate accountability, the Supreme Court's Citizens United ruling has a context and implications that go well beyond elections and freedom of speech, writes Peter Kinder.

Institutional investors have a responsibility as fiduciaries to hold companies accountable for their political spending, New York City Public Advocate Bill DeBlasio says.

James McRitchie, editor of corpgov.net, and Glyn Holton, executive director of the United States Proxy Exchange, propose eliminating street name registration in favor of a direct registration system that could bring down the cost of proxy solicitation.