Investor Voice filed a shareholder proposal today at the JM Smucker Company that asks for a bylaw change to establish fair and transparent vote-counting procedures. The request is for the Board to adopt the “SEC Standard” vote-counting formula across-the-board for all categories of votes.
The “SEC Standard” is the following:
FOR + AGAINST
It may seem astonishing, but companies are not required to use a consistent methodology, and can basically adopt any vote-counting formula they wish when counting votes. They may count shares that “abstain” and “broker non-votes” on ballots not even returned – and companies are routinely found away with using several different vote-counting formulas in the same proxy (usually according to what advantages management the most).
These practices disadvantage any issue of concern to progressive investors.
Smucker’s used four different vote formulas in its 2011 proxy. Not surprisingly, each formula was the one (for that type of vote) that provided maximal benefit to management at the expense of shareowners.
There is a quote usually attributed to Joseph Stalin that reads:
I don’t care who gets to vote, so long as I am the one who counts the votes.
It seems to be a sentiment that is alive and flourishing in corporate America today.
This resolution (written by Investor Voice) calls for a vote formula that is fair, simple, and consistent across-the-board. It is a proposal that Investor Voice has presented – and boards of directors have acted upon – at other S&P 500 companies.
The honoring of voter intent is a hallmark of fair and democratic voting – but such principles are sadly absent in the way voting is handled today by much of corporate America.