TheCorporateCounsel.net

My first two blog entries today feature good and bad news. The good news comes from Target, whose annual meeting is being held today. This will be no “regular” annual meeting as William Ackman, whose Pershing Square Capital Management owns a 7.8% stake, is seeking a seat for himself and four other nominees on Target’s board (as noted in this article) as well is seeking the company to use a “universal ballot” (as noted in The Corporate Library blog).

Although it’s become fairly common for dissidents in the throes of a proxy fight to leverage the Web (see this list of examples I have collected), it’s still fairly rare for companies to do the same. That’s why it’s worth noting Target’s annual meeting page to point out how they “get it” when it comes to campaigning online in their defense.

A number of the items posted on the company’s annual meeting home page were recommended in my article from the Spring ’08 issue InvestorRelationships.com entitled “The Coming Online IR Campaigns: The Future of Director Elections” (which is still available for free). To begin with, Target bothered to create an annual meeting home page. That’s a critical first step. They highlight endorsements from proxy advisors. They even post a white paper making their argument why they think one proxy advisor’s report is flawed (as noted in this article).

Have a good look. I predict these types of shareholder meeting sites will become more of the norm for IR departments/corporate secretaries when we live in a proxy access world without broker non-votes (ie. next year)…

You want further proof that the Web is changing the job of a corporate secretary? How about when a shareholder proponent posts a transcript of his remarks from the annual meeting? Governance guru Bob Monks did just that yesterday on his blog, right after he presented five proposals at Exxon-Mobil’s annual meeting.

No Questions Allowed at TDS Annual Meeting: This Year’s Governance Posterchild?

Now the bad news. Remember the hubbub a few years back over Home Depot’s annual shareholder meeting and the then-CEO Bob Nardelli not allowing questions? Well, it looks like that publicity nightmare was forgotton by Telephone and Data Systems.

Here is what Gary Lutin reports in his “Shareholder Forum”:

Yesterday’s annual meeting of TDS shareholders did not provide the expected opportunity for shareholders to consider management responses to their questions. In an unusually restrictive process, the chairman limited business to the formal requirements of presenting matters noticed in the company’s proxy statement and announcing approval or rejection according to the controlling shareholder’s previously reported intentions, followed by a prepared management report of the company’s condition.

The Forum’s four questions for directors were presented at the meeting by a representative of Southeastern Asset Management as part of the legally allowed presentation of their shareholder proposal. The chairman, who had received a copy of the Forum’s questions on May 15, stated that “given other commitments I’ve had, I’m not in a position to speak to the questions the Shareholder Forum raised,” and further that “I also don’t believe it’s the time or place for a director or the chairman to answer those questions.” He did, however, assure a future response.

The chairman subsequently declined to hear other shareholder questions, saying that they could be addressed after the formal part of the meeting. The webcast ended at the conclusion of the formal agenda, though, and it was reported by attendees that shareholders were then simply told that any questions should be sent to the company’s corporate relations officer.

In his report on the meeting, Gary links to the audio archive of the meeting and provides specifics about when the TDS chair blows off the shareholders. Gary also notes that the day job of TDS’ non-executive chairman (who is also the brother of the CEO and co-trustee of the family trust that controls TDS through super-voting stock) is a partner of Sidley Austin, heading its Financial and Securities Litigation Group.

CalSTRS Breaks New Ground Announcing Votes

Yesterday, CalSTRS revealed that it has become the first institutional investor that will regularly announce its voting decisions regarding upcoming annual shareholder meetings on Broadridge’s ProxyEdge, a platform used by nearly all brokers. This is a big deal since it’s a step towards a fully integrated proxy voting system.

Imagine going to vote – and having access to endorsements, etc. at your fingertips just when you’re about to push the button. Useful – and much more influential than the annual meeting campaign sites I described above since this information will be available right at the crucial moment of voting. I certainly could use that type of information when I’m in the voting booth and I’m presented with candidates I’ve never heard of running for County Commissioner…

– Broc Romanek