Proxy proposal practical info
It is quite difficult to force a company to include a Proxy Proposal, with a vote, at their annual meeting. There is a body of advice and scholarship, which began before the internet.
This is a separate issue from getting a company to talk about a controversial issue without having a vote on it. Many CREF meetings were extended by two hours (!) by passionate advocates discussing Nike’s employment policies, Israel’s occupied territories, or Walmart’s real estate activities in Mexico. Moving the CREF meeting to North Carolina mostly took care of that.
It’s important not to get tied up with questions like “How can you make a motion about speculative corporate conversions when TIAA is investing in Coca-Cola, Caterpillar, and gun manufacturers?” [Setting aside whether that statement is precisely accurate ... ] You can't confuse your passion or the quality of your argument with the realities of getting a proposal into a meeting! For example: It’s not possible to get a Proxy Proposal ordering that the CEO earn no more than 250 times the salary of the lowest-paid employee.
That’s because the SEC has a clear history of allowing corporations to “exclude” (i.e. from the Proxy Statement) proposals covering “the ordinary course of business.” You can click here to see a list of “No Action Letters” that are mostly excluded Proposals. You can page down to “College Retirement Equities Fund to see many of CREF’s. I wrote elsewhere that "CREF should ...." is not the subjunctive modifier you and I may think it to be. To the SEC, it's imperative. I made the rookie mistake of using it in my Proposal, but the SEC allowed me to change it to the wishy-washy "exercise best efforts to". (SEC Staff Legal Bulletin 14L)
I crafted my Proposal after searching the Investment Company Act of 1940 for anything related to a possible change in corporate structure. I had been upset to learn that a senior board member had been appointed who had notable personal experience in Blue Cross/Blue Shield Not-For-Profit conversions. This was at a time when such companies were furiously doing such conversions. States were doing everything they could to assist them, since they had no shareholders. Any financial penalties for leaving NFP status were ending up in hard-pressed state treasuries! In a way, it was because my proposal had nothing directly to do with that, that it was eventually successful (i.e. included. I never expected it to win a majority vote.)
It’s nothing personal about any TIAA employee, but I want to share a comment a very experienced veteran of the Proxy Wars made to me in 2005. He had been helpful to me to successfully get my 2005 Proposal included in the Proxy. I must have said something conciliatory about how CREF had treated me pretty well that day, even though I came to present a Proxy Proposal. He said, with considerable passion, “Don’t ever make the mistake of thinking these people are your friends. This is ‘Life and Death’ for them.”
I'm sure the CREF staff are not happy that the new CEO's first Annual Meeting has an unwelcome Proxy Proposal. But because my proposal had previously been "included" and got over 20% "Yes", it doesn't actually reflect on them. I was hoping they would negotiate with me, and I could try asking for some Nuveen reporting in the Executive Compensation document in exchange for withdrawing the Proposal. But I never heard a peep from them.
Back to Why Should I Vote Yes?