The Corporate Monitoring Newsletter
Issue #11 - May 2001
Written by Mark Latham
IN THIS ISSUE:
1. Voting results on SAVI Proposal at Equus II, Gillette, KB Home
2. Auditor Independence Proposal Omitted From SONICblue Proxy
3. New Paper: Political Implications of Corporate Monitoring
4. Revised Travel Schedule: USA, Japan
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1. VOTING RESULTS ON SAVI PROPOSAL AT EQUUS II, GILLETTE, KB HOME
Support for our "Shareowners’ Alternative Voting Information" proposal this year was as volatile as the market itself. This proposal would put independent professional voting recommendations in the proxy next to the board’s recommendations. Text: http://www.corpmon.com/SAVI-EQS.htm
Here are the voting results, including last year’s for comparison:
MEETING DATE -- COMPANY -- YES %
May 3, 2001 -- Equus II -- 17.8% (preliminary data)
April 19, 2001 -- Gillette -- 2.4%
April 5, 2001 -- KB Home -- 4.0%
April 18, 2000 -- Wash. Mutual -- 4.4%
March 27, 2000 -- Whole Foods -- 8.9%
So this year was both better and worse than last. Clearly it will take time for investors to appreciate the proposal. An influential leading indicator is CalPERS (California Public Employees Retirement System), which changed its vote from "Against" last year to "For" this year. Many institutional investors look to CalPERS for leadership in improving corporate governance. However, the reasoning given on their website is "CalPERS believes the proposal presents no long term harm to the company" -- not exactly a ringing endorsement!
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2. AUDITOR INDEPENDENCE PROPOSAL OMITTED FROM SONICBLUE PROXY
As a shareowner of SONICblue, in November 2000 I submitted this proposal to let shareowners vote to choose the auditor instead of just rubber-stamping the Board’s choice. Unfortunately, the SEC agreed with SONICblue management's contention that auditor selection is an ordinary business decision, so the proposal could be omitted from the SONICblue proxy. Seems odd to me that the SEC itself gets so heavily involved in this "ordinary business decision", but says that the company's owners shouldn't worry our pretty little heads about it.
Read the proposal and arguments at http://www.corpmon.com#auditor
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3. NEW PAPER: POLITICAL IMPLICATIONS OF CORPORATE MONITORING
I am writing a new paper on the political implications of corporate monitoring proposals. For example, effective oversight of managers on behalf of shareowners could change the motivations of corporate contributions to political campaigns, giving them a more democratic foundation and lessening the need for campaign finance reform.
I hope to post the first draft at http://www.corpmon.com/publications.htm in late June.
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4. REVISED TRAVEL SCHEDULE: USA, JAPAN
For those who would like to discuss corporate governance with me in person, here are my travel plans through August:
May 31 - June 4 - Washington DC - George Washington University corporate governance conference
June 6-10 - Boston, then Dartmouth for my son’s graduation
July 11-13 - Tokyo - International Corporate Governance Network conference
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