Shell shareholders demand board gives back bonuses

In the weekend drama, investors also demanded the resignation of the chairman of the company's remuneration committee.

 

The investors' anger arises from the fact that bonuses were paid even though performance targets were not reached.

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"D" as in Dow, dioxin danger, disclosure and denial

What is Dow up to? Their proxy statement filed with the SEC misrepresented the facts relating to dioxin contamination of the Saginaw River watershed.

 

In the proxy the company responded to a shareholder resolution filed by the Sisters of Mercy of Detroit, requiring the company to be more transparenct about progress on handling of dioxin contamination in the watershed.

 

In fighting the resolution the company misrepresented the facts supporting it, including details of the Michigan Department of Community Health fish consumption advisory regarding fish taken from the river.

 

Apparently dioxin, a carcinogen, requires clean up at levels of 90 parts per trillion. According to the Michigan Messenger report, the Sisters of Mercy resolution notes that "At points in the Saginaw River watershed, the contamination level has been found to be as high as 1.6 million parts per trillion."

 

Why is there even any debate here?

 

The Messenger reports that "approximately 28.5 percent of shareholders voted in support of the resolution".

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Angry scene at AIB extraordinary general meeting

Allied Irish Bank chairman Dermot Gleeson ducked a flying egg at an EGM called by the bank to obtain shareholder approval to a government bailout.

 

The Irish government will take a 25% stake in the bank after the 3.5 bn euro ($4.8 bn) recapitalization, and will receive an 8% annual dividend.

 

The egg was thrown by a pensioner, Gary Keogh, when, according to Mr Keogh, Mr Gleeson tried to speak over another shareholder.

 

The share price of the major Irish bank fell by 91% over the last year, and has ceased to pay dividends. Mr Gleeson apologized to shareholders at the meeting for the "anxiety and distress" caused. He will be standing down in July.

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Boardroom pay: Shareholders are revolting

The Sunday Times of London chronicles the expression of investor anger over pay-for-failure during this year's corporate annual meeting season.

 

The days of shareholders passively sitting back and disengaging from corporate oversight might well be over. At least until the next boom.

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Ken Lewis ousted as Bank of America chairman

Shareholders in Bank of America voted to split the chairman and CEO role and to appoint an independent as chairman.

 

Lewis is particularly criticized for his role in the acquisition of the failing investment bank Merrill Bank of America failed to disclose Merrill's fourth quarter loss last year before shareholders voted on the buy.

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Investors pressure Berkshire Hathaway on non-financials

Responsible investment firm Trillium Asset Management is calling on Warren Buffett's group to produce a sustainability report.

 

The investment manager has joined forces with the International Labor Rights Forum ("ILRF") and International Rivers to convince other investors to support the resolution filed by Berkshire shareholder Joseph G. Petrofsky.

 

Berkshire's social and environmental performance has come in for criticism. Elsewhere on APEsphere you can find coverage, for example, of Berkshire's Russell Athletic division.

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Mcdonalds agrees to reduce pesticide use

Mcdonalds, the biggest potato purchaser in the US, has agreed to monitor and employ best practices to reduce pesticide use across the US supply chain.

The company's new commitment is a response to shareholder concerns about pesticide use associated with harmful effects on the environment, public health, and farm employees

 

As a result of the agreement shareholder resolutions will be withdrawn by Bard College Endowment, Newground Social Investment, and the AFL-CIO Reserve Fund.

 

According to these funds, the terms of the agreement are that:

 

"McDonald's has committed to: (1) survey its current U.S. potato suppliers; (2) compile a list of best practices in pesticide reduction that will be recommended to the company's global suppliers (through the company's Global Potato Board); and (3) communicate findings related to best practices to shareholders, and in the company's annual corporate social responsibility (CSR: 4.05, 0.19, 4.92%) report."

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Unprecedented review of mining company relations issued

In an industry first, mining company Newmont today published an independently prepared report on its community relations policies and procedures.

A team of consultants, academic researchers and lawyers undertook the research and prepared the report, overseen by an advisory board comprising NGO representatives, activist investors (who had submitted the shareholder resolution demanding the report to begin with), academics, and a community representative.

According to the Newmont press release, the study involved:

"The CRR process involved:

Interviews with more than 250 local community members, non-governmental organizations and other external stakeholders in five countries;

Interviews with more than 100 company personnel at the site, regional and corporate levels;

Examination of company policies, standards, procedures, and training programs;

Detailed analyses of Newmont sites, including Ahafo (Ghana), Yanacocha (Peru), Martha (New Zealand), Carlin (Nevada), Batu Hijau and Minahasa (Indonesia); and,

Country-level analyses of relationships and contexts."

The report and associated documents are available online. Clearly Newmont has some way to go in closing the gap between head office pronouncement and on-the-ground reality. Specifically they need to focus on:

"* Enhancing consistency of engagement with local communities;
* Building capacity to manage and resolve conflict and address grievances; and,
* Developing consistent global policies, standards and programs to better guide the Company's actions."

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RBS Failed Shareholders, Too

Sir Fred Godwin showed contempt for human rights. The Royal Bank of Scotland's shareholders should have taken notice.

When in August 2005 the Royal Bank of Scotland took a minority stake in the Bank of China, then CEO Sir Fred Godwin was challenged on whether human rights had been a consideration. Among other concerns of human rights activists, the Bank of China was a primary financial backer of China National Petroleum Corporation's development of Sudanese oil fields. Oil revenues were and are keeping the Khartoum regime in place as it pursues genocide in Darfur.

Sir Fred's response was documented at the time by The Herald newspaper: "It's important that we don't get involved in that in China, or any other countries we do business in."

Roll on three and a half years. A Scottish National Party MSP Christine Grahame has asked the police to investigate "whether the bank fraudulently sought investment from shareholders, many of them UK pension funds, knowing that the bank was insolvent."

If there is one thing, surely, that shareholders of every persuasion can learn from this, it is that ethics is indivisible. Shareholders have every reason to watch closely whether a corporation is demonstrating respect to all those potentially impacted by its decisions, even when the money is rolling in.

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Charting the embattled CEO

New research into evolving US corporate governance regulation and shareholder activism charts a steady decay in CEO power since 2000.

The research has just been published by NYU Professor Marcel Kahan and University of Pennsylvania Professor Edward Rock. They find multiple causes of the trend, including changes to shareholder composition and activism, changing governance rules, regulatory changes and the greater substantive independence of board members.

Good reading.

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