Keeping Score at Major Companies

It's April, and proxy season's heating up right along with the temperature. Many of the proxy statements already filed with the Securities & Exchange Commission and mailed out to investors are chock-full of interesting proposals awaiting shareholders' vote at annual meetings.

This year's proposals cover everything from the newly mandated "say on pay" and "say when on pay" proposals to social issues like political campaign spending, greenhouse gas emissions, and animal rights policies.

Manhattan Institute's ProxyMonitor site is keeping score in real time. Its 2011 Scorecard shows shareholder vote tallies thus far, and also reveals upcoming shareholder votes, at Fortune 100 companies. Let's look at what's on some of the agendas, and mark our calendars.

Preach it, sisters
You may have heard that a group of Catholic nuns want Goldman Sachs (NYSE: GS  ) to "get religion" regarding its excessive pay practices.

Goldman's not the only recipient of sisterly shareholder ire. Other nuns are targeting the high cost of prescription medication at upcoming April meetings. Sisters of Charity of St. Elizabeth has filed shareholder resolutions on pharmaceutical price restraint at Johnson & Johnson (NYSE: JNJ  ) , Pfizer (NYSE: PFE  ) , and Abbott Laboratories (NYSE: ABT  ) .

Although many of the proposals are pretty dry and matter-of-fact in tone, the sisters' proposal at Abbott is delightfully scathing: "This resolution's sponsors are not satisfied that the Company has made a clear case offering fiscal and moral justification for such exorbitant price increases. Neither has it given sufficient assurances that the present pattern of increases that far exceed the Consumer Price Index will not continue."

This group of shareholder activist sisters has also filed a proposal at DuPont (NYSE: DD  ) , demanding a report on the potential adverse impact of genetically modified seed.

Trying to right wrongs
Events in 2010 have sparked various initiatives in this year's proxy statements. The Supreme Court's Citizens United case last year threw a new spotlight on corporate political contributions; now, shareholders are urging companies including Pfizer, Valero (NYSE: VLO  ) , and AT&T (NYSE: T  ) to disclose their political spending.

Industrial accidents such as the Deepwater Horizon and subsequent Gulf of Mexico oil spill have now prompted shareholders to demand better safety criteria and initiatives. The AFL-CIO has posted proposals urging safety reports from Marathon Oil and Valero.

Well-known individual shareholder proponents such as Evelyn Davis and John Chevedden have filed a variety of proposals on corporate governance initiatives at major companies. Good corporate governance policies never go out of style, and this year, they may be gaining momentum. Most Apple (Nasdaq: AAPL  ) shareholders supported a majority voting standard at the company this year.

Speaking of Chevedden, make sure to montior the legal battles in which he's currently embroiled, as several companies seek to ignore his proposals entirely. Investors alarmed by this possibility should follow James McRitchie's advice on CorpGov.net, and write to the SEC.

Staying current
Shareholder proposals can reveal real risks corporations face, and urgent changes they need to make. Too often, many investors seem to forget that many shareholder proposals aim to create a shareholder-friendly environment, avoid or avert business missteps, increase shareholder value, or right wrongs that will otherwise return to haunt a company (and its returns) over the long haul. Conscience and common sense can often make voting against management's wishes the right thing to do.

Shareholder proposals may originate from a select few, but the best of them really are for all of us -- and we all have the right to vote our opinion on the issues they broach. Being aware and keeping score help give us the power to push for positive changes at public companies.

Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.

Johnson & Johnson, Pfizer, and AT&T are Motley Fool Inside Value recommendations. Apple is a Motley Fool Stock Advisor recommendation. Johnson & Johnson is a Motley Fool Income Investor recommendation. Motley Fool Options has recommended a bull call spread position on Apple and a diagonal call position on Johnson & Johnson. The Fool has written puts on Apple and owns shares of Abbott Laboratories, Apple, and Johnson & Johnson. Alpha Newsletter Account, LLC owns shares of Abbott Laboratories and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned; for more on this and other topics, check back at Fool.com, or follow her on Twitter: @AlyceLomax. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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