Apr
22
Shareholder Meetings: Proxy Vote
April 22, 2009 | Comments Off
As if it I needed to say it, yes, we should all vote on Shareholder Meetings of those companies that we own. Just as important, or even more important than voting for our country’s President. There we decide our future – or at least our retirement stability future — as well as the future of Corporate America or Corporate World. Since I do not have the money, nor the time and inclination to travel in person to each meeting, my best option is Proxy Vote.
It used to be that the only decissions taken on Shareholder Meetings was who was going to be in the board and ratification of public auditors or the approval of mergers. Ratification is the important word here, because usually the board was just looking for you to accept their board member suggestions, and let them go on with their lives (hopefully with managing the company, but sometimes I even doubt they do on some companies).
Recently it has been more common to see Shareholder Proposals. Proposals that you or me ask to be included. The board usually asks you to vote against them. Most of the time they go against the way in which the board has been governing the company (or not governing).
I tend to vote in favor of:
- Separating the roles of Chairman of the Board and Chief Executive Officer. This allows for more reporting to a higher entity, preventing fraud.
- Limiting Non-Performance Based Compensation. Be it in cash, or stocks. Sometimes the board is the one asking for more compensation to their friends, and I vote against that. If the shareholders ask for less compensation I vote in favor.
- Making Bonuses Performance Based. (See above).
I usually vote with board’s recomendation on:
- Political Contribution Declaration Requirements
- Human Rights
- Environment
However, there are some things I should be doing in the future:
- Researching the Board Members. I think shareholders should start voting against some board members that are not worthy of being a helm of our money.
- Proposing Shareholder Proposals. Just to try the system. I might even have a good idea or two – more likely a regular idea that has not been introduced in the Shareholder’s Meeting yet.
- Reducing the Number of Different Companies. Less shareholder materials, more time to study them in detail and know when to dump the bad ones.
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