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April 29, 2011
First-Ever Fifth Analyst Call Takes Place
    by Robert Kropp

More than 50 investors participate in Fifth Analyst Call with Occidental Petroleum, in which corporate governance issues relating to executive compensation and board composition are discussed.


Organized in advance of this year's proxy season by F&C Asset Management and Railpen Investments, the Fifth Analyst Call initiative has attracted a shareowner coalition representing approximately $2.2 trillion in assets under management.

US-based supporters of the proposal include the Florida State Board of Administration and Walden Asset Management.

The proposal provides for a meeting in advance of a company's annual meeting in which views on the subject of corporate governance philosophy and strategy can be exchanged between companies and investors. The concept has attracted a measure of controversy among issuers and their lawyers, who have argued that it could trigger Regulation FD (Fair Disclosure) enforcement action by the Securities and Exchange Commission (SEC).

Regulation FD "provides that when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons…it must make public disclosure of that information."

But as Elizabeth McGeveran, Senior Vice President, Governance & Sustainable Investment for F&C, told SocialFunds.com in March, "We have not found that Regulation FD is a significant impediment to communication with corporations about important issues. Because the corporation is hosting the Fifth Analyst Call, it can be open to all investors and the information can be made available to the market very easily."

When McGeveran and Deborah Gilshan, Corporate Governance Counsel for Railpen Investments, spoke with SocialFunds.com last month, they described the implementation of the Fifth Analyst Call this proxy season as a "pilot program," in which a small number of companies would be involved. Earlier this week, the first call took place, as more than 50 investors from seven countries engaged with the Lead Director and the Chairman of the Compensation Committee for Occidental Petroleum.

While few details of the meeting have been forthcoming, a press release described the call as "focusing on core corporate governance matters around board structure and compensation and specific items on the proxy ballot."

"We are encouraged," the press release continued, "That investors will be able to use the information and insights from this first-ever Fifth Analyst Call productively as they consider their voting decisions for Occidental Petroleum's annual meeting."

At Occidental Petroleum's annual meeting on May 6th, shareowners will vote on whether to approve the company's executive compensation proposal, and the frequency with which to vote on such proposals in future meetings. In January, the SEC adopted rules that require public companies to provide shareowners with an advisory vote on executive compensation at least every three years.

Also on the proxy ballot at Occidental Petroleum are corporate governance proposals addressing political spending and the appointment of a board director with environmental expertise. The company's Board of Directors has opposed both proposals.

 

 
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