REPORTS AND FINDINGS
REPORTS
PROXY MONITOR 2011: A Report on Corporate Governance and Shareholder Activism In recent years, a small number of activist shareholders have increasingly sought to use their equity stock holdings to exert influence over business management. Proponents of "shareholder democracy" have successfully pushed shareholder proposals offered for votes at the annual meetings of public corporations that change the manner in which directors are elected and in which shareholders can force corporate action outside those annual meetings. Proponents of "corporate social responsibility" have pushed companies to change their behavior with a clear interest in pursuing policy goals rather than share-price maximization. Critics of management's pay levels have pushed for shareholder advisory votes on executive compensation"”a practice borrowed from Britain but unheard of in the United States a decade ago"”and such "say on pay" votes are now mandated under federal law by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Academics and investors alike have debated shareholder activism generally and these proposals specifically; but to date, hard data have generally not been publicly available about this phenomenon. To fill in this informational gap and to uncover and analyze trends in this aspect of shareholder activism and its influence over corporate governance, the Manhattan Institute launched its Proxy Monitor project. The ProxyMonitor.org database assembles information on the 150 largest corporations (by revenues, as ranked by Fortune magazine) and currently includes searchable and sortable information on every shareholder proposal submitted at each company from 2008 through August 1, 2011.
PROXY MONITOR REPORT Winter 2011: New Database Reveals Shareholder Proposal Trends A debate over the scope of voting rights for the shareholders of publicly traded corporations has been raging for the last several years.[1] In the policy arena, the Dodd-Frank financial-reform legislation,[2] enacted in July 2010, made substantial changes to the traditional rules that had limited shareholders' power over corporate governance. Unfortunately, much of the debate and policy discourse concerning corporate governance to date has been thinly informed as to how shareholder activism is actually playing out in practice. To help fill that gap, the Manhattan Institute has developed a new, open database that we are calling ProxyMonitor.org, which will facilitate research into the nature and characteristics of recent shareholder proxy proposals and the overall patterns and trends that they exhibit.
NEW FINDINGS
Executive Compensation The Manhattan Institute released the first of its series of New Findings from Proxy Monitor database. This set of findings focuses on public and private sector unions flexing their muscles over corporate America through the proxy process. Unions proposed 38 percent of all shareholder proposals for the years 2008-1010 and preliminary evidence from 2011 shows that this trend is going to continue into the future.
Social Policy In the second of its series of New Findings, the Manhattan Institute released information from the Proxy Monitor database, revealing over 40 percent of all shareholder social policy proposals relate to political activity, particularly political campaign contributions and trade associations. Other data from the Proxy Monitor New Findings reveals environmental and human rights issues are at the forefront of shareholder proposals for social policy.
Corporate Governance In the third of its series of New Findings, the Manhattan Institute released information from the Proxy Monitor database, revealing labor unions and individual shareholder activists are trying to change corporate structure, particularly related to chairman independence and voting rules.
Industry-by-Industry Trends In the fourth of its series of New Findings, the Manhattan Institute released information from the Proxy Monitor database focused on industry-by-industry analysis. The New Findings feature information about labor union shareholder proposal activity in non-traditional industries like retail and financial services.
Proxy Season 2011 In the fifth of its series of New Findings, the Manhattan Institute used data from its 2011 Scorecard to analyze executive compensation proposals and social policy proposals. These early returns indicate a rise in political spending proposals and majority approval over say-on-pay.
Proxy Season 2011:Executive Pay Proposals Winning Support 2011 Proxy Midterm: In the sixth of its series of New Findings, the Manhattan Institute used data from its 2011 Scorecard to reveal increasing shareholder activity by labor unions through their pension funds. Labor unions sponsored 56 percent of all proposals on executive compensation thus far in the 2011 proxy season.
2011 Proxy Season Review: Rate of Introduction and Passage of Shareholder Proposals Falls In the seventh of its series of New Findings, the Manhattan Institute used data from its 2011 Scorecard and archived database to reveal that the overall number of shareholder proposals related to executive compensation and corporate governance are down, while the number of shareholder proposals involving social policy goals are on the rise.
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