Schneider Electric | NYSE Euronext Paris | Meeting Date: 2013/04/25
The upcoming meeting of Schneider Electric will be one of the most controversial in France this year, serving as a barometer for shareholder acceptance of the recent trend of combining the roles of chairman and CEO in France. In the past few years, several of France’s largest companies have made the switch from a one-tier board to a two-tier board, with distinct supervisory and management boards, and then back again to a one-tier board. Schneider Electric would like to be the next. At this year’s annual meeting, the Company will propose that shareholders allow it to return to a one-tier governance model with a unitary board comprising both executive and non-executive members. Along with this structural change, shareholders are asked to approve the combination of roles of the chairman and CEO. Anticipating some resistence to this move, Schneider’s board has defined clear safeguards to mitigate conflicts of interest, which are not typical of French companies. The question is, will these conflict-mitigating provisions be enough for shareholders to accept what many would view as a step backwards in the Company’s governance?

Graco Inc. | GGG | Meeting Date: 2013/04/26
For three consecutive years, shareholders have expressed significant discontent with board nominees, casting withhold votes of over 40% for each nominee at the 2010, 2011 and 2012 annual meetings, including two nominees with over 58% votes withheld in 2012. The high withhold votes stem from shareholder concerns relating to the board’s adoption of a shareholder rights plan (“Poison Pill”) in 2010 without shareholder approval, and the board’s failure to implement a majority-approved shareholder proposal seeking to adopt majority voting for director elections. This same shareholder proposal was presented in 2010, 2011 and 2012, and received increasing levels of majority support at each annual meeting, culminating in approval by approximately 84% of voting shares in 2012. This year, the board has finally taken action to address these concerns. In February 2013, the board announced that it has terminated the poison pill as of February 15, 2013, and at this year’s annual meeting, the board has presented a proposal to adopt majority voting for director elections, recommending that shareholders vote in favor. While we continue to have concerns with the board’s failure to act immediately following the 2010 shareholder vote, we are encouraged that the board has finally taken action to address these underlying concerns.

AT&T | T | Meeting Date: 2013/04/26
AT&T dialed up strong results in 2012 despite a highly competitive and rapidly evolving marketplace. In the wake of its 2011 failed acquisition of T-Mobile, which cost the Company upwards of $4.1 billion in fees and lost data spectrum, AT&T has seen competitors in the crowded U.S. cellular market gain ground through consolidation, including the $20 billion takeover of Sprint Nextel by Japanese telecom provider SoftBank Corporation in October 2012, and MetroPCS’ hotly contested merger with T-Mobile (INSERT LINK TO METROPCS MERGER PROXY PAPER?); the deals would bolster two of AT&T’s chief competitors. Undeterred, the Company has continued efforts to expand its coverage, evolve its data network and revise its existing services. In November 2012, AT&T announced an ambitious $22 billion overhaul of its equipment and infrastructure for phone and internet services, and in January of this year the Company announced deals to purchase $1.9 billion in data spectrum from Verizon Wireless and $780 million of data spectrum from Atlantic Tele-Network Inc.

The voices of AT&T shareholders continue to ring loudly as well; this year’s ballot includes four shareholder proposals, two of which previously appeared on the agenda at the 2012 annual meeting and received significant support from shareholders. Proposals requesting that the board separate the roles of chairman and CEO and produce a report on the Company’s political spending received support from 48% and 39% of votes, respectively, in 2012. Notably, a 2012 shareholder proposal seeking to lower the threshold for shareholder action by written consent received majority support from shareholders in 2012 but failed to garner the supermajority approval required to amend the Company’s articles. Here’s an example of supermajority vote requirements blocking a majority approved–and board supported–initiative.

Credit Suisse | CSGN | Meeting Date: 2013/04/26
Following years of withering criticism of its pay practices, culminating in over 30% of shareholders voting against the advisory vote on the compensation report at the 2012 annual meeting, Credit Suisse appears to have taken pay reform seriously. At this year’s annual meeting, the Company is presenting a thoroughly revised compensation policy that significantly lowers target and maximum variable compensation, defines performance metrics and vesting schedules, and lengthens the performance period for a large portion of variable compensation, among other changes. While shareholders will surely view these changes as mostly positive, we continue to be concerned by the very high levels of compensation for non-executive directors, which vastly outpace peers and in our view, may compromise the objectivity of directors.


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