“The 2013 successes at Abbott Laboratories (and) Dean Foods (as well as other companies) were in many ways generated by 2012 engagements at those companies on the same issues,” Greg A. Kinczewski, vice president and general counsel at Marco Consulting, said in an e-mailed response to questions.
The outcomes are the key results the group achieved this year as a result of engagements that began last year, targeting companies that had received less than 80% of shareholder endorsement of executive compensation policies in say-on-pay voting in 2011, Mr. Kinczewski said. The group also achieved some positive outcomes last year at companies.
“We assumed they would be at least receptive and hopefully responsive to the need to change their compensation policies,” Mr. Kinczewski said in his e-mail.
In terms of the power of shareholder engagement or discussions with companies to encourage corporate governance changes, Mr. Kinczewski noted in his e-mail. Pitney Bowes “took significant actions on their own even prior to being engaged. ... There were no substantive discussions with Abbott Laboratories.”
The investor group's effort “shows that a lot can be accomplished without having to get a majority vote” in a shareholder proposal, Mr. Kinczewski said in the e-mail.
“Getting … widespread institutional support can take time. For example, in 1987 declassified board proposals only averaged 16% of the vote. In 2012, it had risen to 81%.”
The investor group's proposals don't generally generate that groundswell of support, “although I suspect the fact that almost all of our no-gross-up proposals end up being withdrawn because companies implement them is a good indication that they would have an excellent chance of getting a majority vote if they ever went” to a vote, Mr. Kinczewski wrote.
“Obviously, the more likely you are to get a majority vote, the more likely the companies are to negotiate on them,” Mr. Kinczewski wrote. But the investor group's engagement “has been doing fine without the certainty of a majority vote … most companies take them (the shareholder proponents) seriously and are willing to make progress on them and sometimes adopt them. That's the real point of the engagement.”