Perhaps 2007 is the year of shareholder activism, but if the resolutions passed by stockholders are not binding, why bother? And, that being said, it certainly is not much of a revolution.
Verizon Communications Inc. (NYSE: VZ) was the latest company to report that its shareholders had passed a proposal to give them a say in executive compensation. It took two weeks to count all of the votes and the proposal made it by with a thin 50.18% margin. It could have been 99.9%. The resolution is not binding on the board or management in any way.
Verizon was good enough to say that it will review the resolution and "consider what actions to take." Which means that the company will do exactly nothing.
The proposal had some energetic supporters, including both of the large proxy advisory firms Institutional Shareholder Services and Glass, Lewis, & Co. A number of Verizon's large institutional shareholders also voted "yes" for the measure. All of that means that some real time and effort went into a vote that is essentially meaningless.
They might as well take the money spent on getting the resolution approved and bet it at the blackjack tables in Vegas.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
5-23-2007 @ 9:05AM
douglas a mcintyre said...
The article is not about past proposals.
Douglas McIntyre
5-23-2007 @ 9:05AM
douglsaamcintyre said...
The story was not about past proposals. I think you are already aware of that.
5-23-2007 @ 11:18AM
C. William Jones said...
Mr. McIntyre,
In order to protect any credibility that you might have, I recommend that you not venture into areas that you know nothing about.
Your article, Verizon: More nonbinding shareholder votes is totally off the mark. Rather than trying to educate you in this forum, I refer you to the record of proxy proposals that I and my associates have filed at the Verizon (also NYNEX and Bell Atlantic) Annual Shareholder Meetings.
You will note that every proposal was nonbinding. You might also note that every nonbinding proposal resulted in a change of corporate governance or policy.
Our record on 8 different proposals over the last 10 years shows that we won 2 by a majority vote and the company complied with the shareholder mandate and the other 6, even though a majority vote was not attained, caused the company to change their corporate governance or policies to agree substantially or completely with the proposal.
Should you wish to have the details and/or a short course on Proxt Proposal 101, please let me know.