Reflections on 2011

The United States Proxy Exchange (USPX) is a experiment premised on the notion that a grass roots movement—by individual shareowners, for individual shareowners and funded entirely by dues of individual shaeowners—can improve corporate governance and address financial abuse. It is too early to say for sure, but based on what we achieved in 2011, the [...]

Reform Proposals Delayed But Not Blocked by Apache and KBR.

After two years or legal wrangling, the charade is up. A reform proposal Apache Corp. (APA) has tried to keep from a shareowner vote was resubmitted on Wednesday. It is a fairly benign proposal that, if passed, will ask the board to: … take the steps necessary so that each shareholder voting requirement in our [...]

Wall Street Journal Spotlights USPX Efforts on Virtual Annual Meetings.

Monday’s Wall Street Journal includes a wonderful article by Joann S. Lublin highlighting the USPX’s efforts to address the risks of “virtual” annual meetings. While virtual annual meetings have the potential to increase shareowner participation, they can also disenfranchise. Rudimentary technology has failed, leaving would-be participants staring at blank screens. Participants complain that tough questions [...]

Model Shareowner Proposal for Proxy Access

Today, the United States Proxy Exchange (USPX) released a Model Proxy Access Proposal that can be presented to corporations for a shareowner vote under SEC Rule 14a-8 to ensure that long-term shareowners have a reasonable, but not necessarily easy, means for including board nominations in the proxy materials those corporations distribute—so called “proxy access”. The [...]

An Open Letter to Institutional Shareholder Services (ISS)

November 4, 2011   VIA E-MAIL ( Global Policy Board Institutional Shareholder Services Inc. 2099 Gaither Road Rockville, Maryland 20850 Re: ISS 2012 Proxy Voting Policies – Proxy Access Proposals (US) Dear Sir or Madam: Thank you for this opportunity to comment as you develop policies for making shareowner voting recommendations in 2012. This letter [...]

An Important E-mail YOU Can Send To facilitate Proxy Access

Can you write an e-mail to Institutional Shareholder Services (ISS)? It will take you two minutes, and doing so could have an enormous impact on proxy access proposals in 2012. A hard-working team of USPX members are drafting a model proxy access proposal that members can submit to corporations for the 2012 proxy season. Here [...]

New Website Transforms USPX Members’ Experience.

Members of the USPX are celebrating the launch of our brand new website. It offers a host of social networking tools that will allow members to network, create their own blogs, form groups, engage in discussion forums and more. It looks similar to the old website, but under the hood, everything has changed. The goal [...]

Proxy Access for the 99% – USPX Members Organize

The time has come for shareowners to be allowed to include their own nominees for corporate boards in the proxy materials their corporations send out every year—so-called “ballot access.” The current system—that only allows shareowners to vote for candidates nominated by the current board—is absurd. The SEC has finally reaffirmed shareowners’ right to submit proposals [...]

SEC Plays King Solomon: Divides Proposal-Baby In Half

SEC Staff Legal Bulletin No. 14F (CF) finally addresses the issues of what is needed to evidence stock ownership for the purpose of filing a shareowner proposal. It is obvious from a first glance that shareowners whose broker or bank isn’t a DTC participant just got screwed. We will take the view going forward that, [...]

Zombie Glass–Steagall

On October 11, the FDIC released proposed rules for implementing Section 619 of the Dodd-Frank Act—the so-called Volcker Rule. The next day, the SEC did the same. This is a joint effort of the FDIC, Federal Reserve Board, SEC and OCC. Their—largely identical—proposed rules are based on a 79 page study released by Tim Geithner’s [...]

Occupy Wall Street: Lessons From Women’s Suffrage

Finally, it is happening! Waves of people are hitting the streets. They are camping out at the bastions of casino capitalism. They are organizing, demanding change. It started in New York, with Occupy Wall Street and is now spreading to cities across America. We at the United States Proxy Exchange (USPX) have long advocated that [...]

Test Driving the USPX Guidelines on Say-on-Pay

Brett Davidson is a member of the USPX and publishes Investletter. He serves on the committee that released the USPX guidelines for voting on say-on-pay.  In this article, he assesses those guidelines, applying them to the 36 corporations that failed their say-on-pay votes this proxy season. For that purpose, he also experiments with how the [...]

Shareowner Guidelines for Say-on-Pay Voting

Today, the United States Proxy Exchange (USPX) released standards for shareowners to use in making say-on-pay voting decisions. Congress’s new “say-on-pay” rules allow shareowners to express an opinion on executive compensation at annual meetings. But to make informed voting decisions, shareowners must first assess the compensation packages boards propose. That is not easy, since they [...]

Focus on the USPX

On Saturday, eight members of the USPX came together for a day-long focus group to share thoughts on our movement and plan for the future. Kevin and Maggie Weber kindly hosted the gathering at their home near Boston. Attendees came from across the country. Jim McRitchie flew in from California; Vincent Cirulli came from Alabama; [...]

Request for Comments: Say-on-Pay

The USPX is releasing draft guidelines for shareowner’s to use in making say-on-pay voting decisions. Comment letters are due by June 2. We hope to have the finalized guidelines out by later this summer. In 1965, CEO pay at large companies was 24 times the average worker’s wages. By 2007 that number had increased to [...]

Website Upgrade!

Since 2008, the USPX website has been a platform to educate and inform shareowners. Now we have transformed it into a powerful social networking platform. Members can post profiles, launch their own blogs, form groups, chat in forums, and self organize. We are just getting started using this wonderful new functionality, mostly testing it, but [...]

SEC Enforcement: Will They or Won’t They?

The SEC has a reputation of enforcing regulations against two-bit players in the financial arena while tiptoeing around the big boys. Back in December, Apache Corp. (APA) announced plans to flaunt US securities laws. The Commission’s response has been three months of unbroken silence. Apache’s CEO, G. Steven Farris, is waging a war against shareowner [...]

SEC: Time To Remove the Gag

When corporations go to court to challenge a shareowner’s right to submit a proposal for inclusion in the firm’s proxy materials, it is up to the court to interpret applicable SEC rules. You would think the SEC would help the court by clarifying its position on the issues. Instead, the SEC says and does nothing. [...]

Reuters Spotlights the USPX

Yesterday, Ross Kerber of Reuters wrote a wonderful piece describing the USPX. It focuses on Glyn Holton and one of our less-known members: Norman the cat. You can read the article here.

KBR Bellies Up To The Bar

On January 14, KBR sued shareowner activist John Chevedden in Federal District Court in Houston to challenge a proposal he submitted for inclusion in the company’s 2011 proxy materials. As Yogi Bear would say, it feels like Déjà vu all over again. Last year, Apache Corp similarly sued Chevedden for the same reason. With KBR, [...]

Chevron Struts Its Stuff

As we reported earlier, at its May 26 annual meeting, Chevron Corp. (CVX) denied entry to attendees with valid proxies. They had four of those individuals arrested for trespass. A fifth individual, who was admitted to the meeting, was subsequently arrested for trespass and disruption. To our knowledge, all the individuals denied admission were activists [...]

A Say-on-Pay Sucker Punch

Shareowners are poised to suffer a significant setback this Spring. We need to strategize to prevent this. We don’t have much time. Say-on-pay should be an opportunity for shareowners to come together and emphatically repudiate sky-high executive compensation. If we believe the vast majority of executives are excessively compensated, then we should vote to reject [...]

Looking Back: 2010

As we close the year on 2010, it is time to look back. What did we accomplish this year? We won two dramatic victories in 2010. One was helping John Chevedden defend himself in the Apache vs. Chevedden lawsuit. Back in February, I worked the phone trying to secure John pro bono legal representation. I [...]

Broadridge: Should the Federal Trade Commission Intervene?

Broadridge Financial Solutions (BR) essentially monopolizes the proxy processing business in North America, providing such services to 90% of public corporations and mutual funds in the region. Monopolies aren’t necessarily bad. Some products and services are most efficiently delivered by a single provider. But good monopolies are regulated monopolies, and Broadridge isn’t regulated. Whenever the [...]

Broadridge Smokes Their Own Dope

The rudimentary software Broadridge offers corporations for running virtual annual meetings disenfranchises shareowners. This was on display when Symantec Corp. hosted a virtual-only annual meeting with the software in September. It was again on display yesterday. There is an old saying that cautions “never smoke your own dope.” Broadridge didn’t heed that advice yesterday when [...]

Standards for Securities Intermediaries to Document Clients’ Eligibility to File Rule 14a-8 Proposals

Submitting shareowner proposals is a primary means by which shareowners influence the corporations they own. The process is governed by SEC Rule 14a-8. One provision of that rule—Rule 14a-8(b)(2)—specifies how shareowners prove they own shares in a corporation for the purpose of submitting a proposal. In recent years, executives at a number of corporations have [...]

Proxy Plumbing

“Proxy plumbing” is an informal name for the system by which proxy materials land in shareowners’ mailboxes each year. The name is apt. Today’s proxy plumbing is confusing, inefficient and expensive, much like some interconnected jumble of water pipes, joints and faucets. It creates barriers that ensure—at almost all corporations in almost all years—the only [...]

Symantec Letter Writing Campaign

On September 20, 2010, Symantec Corporation set the pathetic precedent of being the first Fortune 500 company to hold a virtual-only annual meeting without shareowner-approved safeguards to protect participant rights. But two weeks later, Symantec backed down. Responding to a letter writing campaign organized by the USPX, which attracted national media coverage, Symantec announced they [...]

All Keynesians Now?

“In one sense, we are all Keynesians now …” When free-market economist Milton Friedman made this famous quote, he acknowledged the importance of government spending in offsetting economic downturns. A faltering economy needs cash to flow—like fuel through an engine. If that cash flow can’t come from private enterprise, government needs to step in. This [...]

Apache v. Chevedden

During February and March of 2010, the USPX intervened in a lawsuit that, if lost, could have devastated shareowner rights. The event provides a cautionary tale of how distorted the concept of share ownership has become, and the lengths some CEOs will go to suppress shareowner rights. It all started in January, when shareowner activist [...]


Today’s Wall Street Journal reports that two prominent investors—Relational Investors and CalSTRS—will seek to replace up to four members of Occidental Petroleum’s board in 2011. Chair and CEO Ray Irani is grossly overcompensated. At 75, it is questionable that he is fit to be running a major corporation. The board has waived its own mandatory [...]

Prologue to a Farce

Since March of 2009, the SEC has been resisting a Freedom of Information Act (FOIA) request from the Fox Business Network. Fox is seeking internal documents relating to the Commission’s investigations of the Bernie Madoff and R. Allen Stanford Ponzi schemes. We understand the SEC is embarrassed, but transparency is called for. On Tuesday, the [...]

The Discussion Schapiro Sidestepped

SEC Chairman Schapiro made a disappointing comment at last week’s open meeting (see the July 15 post): Rather than passing judgment on the merits of securities lending, this release examines questions of whether the lenders of securities need information sooner about the content of upcoming shareholder meetings than they now generally receive it. Translation: Rather [...]

SEC Plans to Patch – Not Fix – the Proxy System

Yesterday, the SEC held an open meeting to issue a concept release seeking public commentary on the US proxy system. Cluttered with Washington-style self-congratulation, the meeting can be summed up with a comment from Meredith Cross, Director of the Division of Corporation Finance. Referring to the proxy system, she said: While we believe the system [...]

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