Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
August 21, 2006 01:00 AM

Proxy contests’ limited choice

Barry B. Burr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The divisive proxy contest to elect five dissident nominees of the Trian Partners LP hedge-fund group to H.J. Heinz Co.'s 12-member board shows shareholders need a freer hand in voting for directors.

    Shareholders in the Heinz contest had to choose one of two proxy ballots, each with 12 candidates: the Heinz proxy card or the Trian proxy card. The Heinz card listed the 12 directors recommended by the board. The Trian proxy card listed its five dissident nominees and seven of the 12 Heinz nominees.

    For whichever ballot they chose, shareholders could vote or withhold their votes for any of the 12 nominees listed.

    Shareholders had to choose one card. They could not mix votes by, say, voting for any combination of 12 from both sets. Shareholders could not choose 12 board members from the full roster of 17 candidates. The Trian ballot meant the Trian Group selected five incumbent Heinz directors for removal by keeping them off its ballot.

    In a sense, shareholders could choose one of two sets of uncontested elections.

    The lack of a completely free choice in voting on all 17 nominees might have been a reason many shareholders were undecided on how to vote until the Heinz annual meeting.

    Although shareholders typically cast proxy votes in advance of an annual meeting, more than 60 million, or nearly 20%, of 332 million shares outstanding were voted at the company's meeting Aug. 16 in Pittsburgh, according to William Mullen, Heinz spokesman. That amount of late voting was called unprecedented by Patrick J. McGurn, special counsel, executive vice president and director-corporate programs at Institutional Shareholder Services Inc. It is a reason Heinz officials said they would withhold release of a preliminary tally of the vote at the meeting, instead waiting for the certified results, which could be issued Sept. 15, if not earlier, Mr. Mullen said. A delay of preliminary voting results by a company is unusual, said Frank Lentini, director of Innisfree M&A Inc., Trian's proxy solicitor.

    The way proxy contests work isn't ideal from a corporate governance standpoint, although they give shareholders more choice than just the typical corporate ballot.

    The Securities and Exchange Commission never brought to a vote its proposal to allow shareholders to nominate directors on the corporate proxy ballot. But in proxy contests, where shareholders can nominate directors, albeit on a separate ballot the dissidents sent out, the SEC should find a way to allow shareholders to select from all of the nominees put forth. That would enhance shareholder choice. The Heinz proxy-voting campaign was highly contentious: Heinz and Trian made a combined 90 separate filings with the SEC. The contest has been a victory for shareholders, whether or not Trian gets any seats on the Heinz board.

    For one, the contest should give the Heinz board a sense of urgency to improve the company's performance and hold William R. Johnson — Heinz's chairman, president and CEO — more accountable. For another, Heinz executives agreed, after talks with officials of the $210.7 billion California Public Employees' Retirement System, to improve corporate governance, including adopting a majority vote policy to elect directors and appointing two new independent directors, whom Heinz has begun to recruit. CalPERS voted its 1.66 million shares for the company's 12 nominees.

    "Without the pressure from the Trian Group, CalPERS might not have had the same leverage to effect corporate governance changes," said Kent Hughes, managing director at Egan-Jones Proxy Services.

    It remains to be seen if shareholder activists will devote the resources to revive the battle next year if expectations for better performance fail.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    OCIO, Anchor in Rough Seas
    Sponsored Content: OCIO, Anchor in Rough Seas

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference