Warren Buffett famously dubbed his corporate jet "The Indefensible." His lucky shareholders would probably call him "The Irreplacable." The most successful investor in history turned 80 last August and while all evidence shows that he is still at the top of his game, he has been candid in acknowledging that his company has to find [...]
Archive | March, 2011
When to Boot A Problem Director
March 30, 2011 in Scandals
My latest column on Bnet asks what took so long for Rajat Gupta's fellow board members to oust him. For two reasons, the public announcement of the insider trading allegations at Galleon should have triggered immediate action from every organization, and especially every public company, with which Gupta had a current or recent past [...]
Shuffle Master may want to change its name to Shuffle CEO
March 30, 2011 in Executive Pay: Say on Pay
Wait for it, wait for it, I’ll explain. Was four CEOs in 12 months enough to make shareholders want to vote no in a Nay on Pay vote? Shuffle Master became the fourth in the series of companies to receive a majority vote against its Say on Pay resolution, with the results announced last week, [...]
Lessons from the Airgas Battle
March 30, 2011 in Corporate Governance
There was a time last year when Airgas Inc. seemed likely to be acquired by Air Products and Services, Inc. (APD). APD had mounted a successful proxy contest, electing three candidates to the Airgas board; a majority of Airgas shareholders had supported APD’s last and final bid of $70; and Airgas’ poison pill was set [...]
A Director’s Duty to Inform
March 29, 2011 in Founders' Forum
Law books will tell you that directors of public companies have two duties: care (showing up, doing their homework, paying attention) and loyalty (making sure that corporate activities benefit the shareholders and not management to the detriment of shareholder interests). But Betsy Atkins, an experienced board member, says that directors also have a "duty of [...]
Proxy Season Foresight #3 (From remarks for a BSR webinar 16 March)
March 28, 2011 in Executive Pay: Say on Pay
As I said last week, the two big items on the governance proposals front this year are, somewhat unusually, management proposals: the advisory vote on executive compensation, and the advisory vote on the frequency of the advisory vote These are better known as Say on Pay and Say When on Pay (whoever came up with [...]
Small Print
March 25, 2011 in Small Print
Better than $300 As regular readers of Small Print will now, a certain Dr. Philip Gerdine, a director at Applied Materials, received a $300 undisclosed gift for 34 years of service. We mused that this was a little cheesy at the time. So now Corning comes forward and shows everyone how to do it. A [...]
Hewlett-Packard latest company to feel the heat of a Say on Pay defeat
March 24, 2011 in Executive Pay: Say on Pay
Or The case of the missing 2 percent (and I’m not talking about milk’s fat content) It looks like Hewlett-Packard’s shareholders just shot down the company’s pay policies, though it could be a draw. It has been announced that 50 percent voted ‘nay’ and 48 percent voted ‘ay’. No one seems to know what happened [...]
Proxy Season Foresight #2 (from remarks for a BSR webinar 16 March)
March 24, 2011 in Executive Pay: Say on Pay
The two big items on the governance proposals front this year are, somewhat unusually, management proposals: the advisory vote on executive compensation, and the advisory vote on the frequency of the advisory vote These are better known as Say on Pay and Say When on Pay. So let’s deal with Say When on Pay in [...]
Proxy Season Foresight (from remarks for a BSR webinar 16 March)
March 23, 2011 in Legislation
Back in November 2009, I wrote this in a blog: Then, in May, Senator Charles Schumer introduced the Shareholder Bill of Rights Act of 2009 to the U.S. Congress. If the bill is passed, shareholders are going to have to come up with a whole new set of ideas for shareholder proposals as the bill [...]
Women on Boards issue gaining mainstream attention
March 22, 2011 in Daily Viewpoint
The "women on boards" issue is starting to attract more attention from major media outlets. In an article published on March 21, 2011 in Agenda Week (a Financial Times publication) Tony Chappelle, citing GMI data, explained that "the number of female board members in the U.S. inched up to 12.3% this year from 12.2% in [...]
Voting Proxies in 60 Seconds or Less
March 22, 2011 in Proxy Voting
My latest Bnet piece is about voting proxies — why it matters and how to do it right. I explain how you can analyze and vote a proxy in five minutes, or, if you're in a hurry, in just 60 seconds.
Spikes at the Pump, Volatility in the Market
March 22, 2011 in Founders' Forum
An article in the March 9 New York Times entitled “Rising Gas Cost Finds the Nation Better Prepared”1 came as a surprise to me. The writer opines on lessons learned during the 2008 energy crisis. His positive outlook rests heavily on the theory that, since U.S. consumers have reduced their gasoline consumption, the current spike [...]
Corporate Governance in Asia
March 21, 2011 in Founders' Forum
We talk glibly about regional and market maturity governance models, using descriptive phrases such as “Anglo-American” and “emerging markets” and “BRIC”. At the International Corporate Governance Network’s (ICGN) midyear conference in Kuala Lumpur this month I was reminded that such wordplay is at best insufficient and at worst misleading. As one speaker pointed out, are [...]
New GMI Article on Women on Boards Issue published in The Atlantic
March 21, 2011 in Daily Viewpoint
In a new article in The Atlantic, Nathaniel Flannery, a member of GMI’s research staff, presents 23 global companies with ZERO women on their boards. The article asks “What do the companies Toyota, Zale, Bulgari, Crocs, and Fiat have in common? These globally recognized brands market aggressively to women, even rely on women for the [...]
In a New Political Environment Can Gender Diversity Break Through in Irish companies?
March 18, 2011 in Daily Viewpoint
With the Irish elections complete and a coalition government now in place, one of the interesting issues that is likely to come up is gender diversity on company boards. The agreement between Fine Gael and it coalition partner, the Labour Party, called a “Statement of Common Purpose” has the following commitment to gender diversity for [...]
Say on Pay Power at Disney
March 18, 2011 in Executive Pay: Say on Pay
A surprise move by Disney to avert a Say on Pay disaster at its next Prom Night, I’m sorry, annual meeting sees the company removing the provision to gross-up excise tax for executives if they are terminated following a change of control. This includes Iger, Rasulo, Braverman, Staggs, Phineas and Ferb, and Hannah Montana. No, [...]
Beazer sued over executive pay
March 18, 2011 in Daily Viewpoint
Well, it’s begun. Two Teamsters pension funds filed a lawsuit this week against executives and directors at Beazer Homes US, which earlier this year had been one of the first companies this proxy season to receive a no vote on its Say on Pay resolution. I guess it was inevitable, though the vote is likely [...]
Northern Trust – Pay for Performance?
March 18, 2011 in Daily Viewpoint
OK, the following, passed on to me by Compensation Analyst Ashley Kotzur who’s gast was as flabbered as mine was, is a direct extract from Northern Trust’s compensation discussion and analysis. * Based on operating earnings The Corporation did not achieve these long-term, across cycle, strategic objectives in 2010. We recognize these targets as [...]
Trouble at LAN Airlines Highlights Broader Investment Risks in Chile
March 18, 2011 in Daily Viewpoint
A year has passed since the devastating 8.8 magnitude earthquake that rocked Chile in February 2010. Far from collapsing under the weight of the global recession and earthquake recovery efforts, Chile's economy has rebounded, growing at a brisk 4% rate in 2010. However, the country's strong macroeconomic performance masks a number of serious micro issues, [...]