Here at Point of Law, we've always had at least some focus on corporate governance. With the passage of the Dodd-Frank financial reforms, such issues are now more relevant than ever.
As displayed on the right-hand column, yesterday the Manhattan Institute Center for Legal Policy launched a new website, ProxyMonitor.org, designed to shed light on trends in shareholder proposal activity. At this time, the database contains information relating to all shareholder proposals submitted for shareholder vote between 2008 and 2010, for the 100 largest American public companies. (The database contents will be updated and expanded over time.) The database information can be searched based on year, company, industry, proposal sponsor, or proposal type (corporate governance, executive compensation, social policy); and further sorted by other criteria, such as company revenues and vote totals for the proposals. Users can find our own customized output for each proposal or follow a link to the actual proposal on the proxy statement on the SEC's website. And all output can be exported to a spreadsheet.
We think this is a very valuable tool for investors, reporters, academics, and policymakers interested in corporate governance.
While we've yet to do the deep empirical work that the site enables, we have done some preliminary research looking at summary statistics that does illuminate some interesting trends:
- Perhaps unsurprisingly, the largest companies are targeted by the highest number of shareholder proposals. Energy and financial companies seem to be particular targets.
- The most significant sponsors of shareholder proposals are individual investors (e.g., Evelyn Davis, John Chevveden); labor unions (e.g., the AFL-CIO, AFSCME); and certain religious orders.
- A plurality (38%) of all shareholder proposals are related to social policy goals unrelated to traditional concerns of corporate governance (e.g., human rights, animal welfare, political activity). 30% are related to executive compensation, and 32% are related to other traditional corporate governance concerns (e.g., separation of chairman and CEO, voting rules).
- No social policy proposals were adopted by shareholders over the time period. Shareholders adopted 7% of proposals related to executive compensation and 19% of proposals related to more traditional corporate governance concerns.
- While there was some variance in the number of proposals submitted over the 2008 to 2010 timespan, the more striking trend was on the percentage of proposals being adopted by shareholders. The percentage of shareholder proposals adopted rose from 5.2% in 2008 to 10.8% in 2009, before declining somewhat to 8.4% in 2010.
Read the full report here.