Taking Stock

If you don't have stock yet you will likely one day own shares, and when you do that stock ownership gives you the right not just to see the corporate annual reports, but the right to attend the annual meeting.  It is not likely that you will, so you will have the right to vote by proxy.  Recently I've been getting a lot of phone calls at home (messages, actually, as I rarely answer the phone) to urge me to vote, which is something not commonly done in the past and is a bit annoying as I get all the materials both online and by snail mail.  But they need the quorum, I guess.

The proxy vote typically has four parts to it:  election of board officers, determination of accounting firm, board proposals, and stockholder proposals.    For me, I usually vote for the officers if the company is doing well, and am more deliberative for companies falling short of expectations.  I confess that I routinely vote against nominees that have law degrees, and often vote against those that chair, and sometimes are members, of compensation committees.  I'll typically abstain on the vote for the accounting firm, as I don't know the merits of one from the other, and as past events have shown, even those in the Big Four are not beyond reproach.  But it is the board proposal section that is my greatest complaint.  Most board proposals concern compensation, primarily theirs.  It is unconscionable how most boards seem to only have a single purpose, which is how to pay themselves more.  Unconscionable in that company officers are so grossly overpaid, especially considering how little their performance typically relates to the company's performance (there are some exceptions, of course), and unconscionable how little board members do to merit the meeting fees and stock awards/options.  Finally, there is the occasional stockholder proposal.  I've probably seen a couple of hundred stockholder proposals over the years, and I don't think I've ever seen one supported by the board.  Some of the  shareholder proposals are crackpot ideas or reflect a particular personal bias, some make sense, and none are supported by boards.

I just wish boards would think more about the business and less about the peanuts.  On the other hand, maybe it's better they do so little.