The Value of Shareholder Concerns to the CFO

“CFOs have become key contacts for the investment community, auditors, and ratings agencies, and are the day-to-day access to shareholders that directors do not have.”  (Bloomberg BusinessWeek, 9/22/2009) Boards and the Expanding Role of the CFO, by Karen D. Quint and T. Christopher Butler.

Regardless of the size of your company, there is a value in understanding the general issues and perceptions of the shareholder community.  You may find that your investors have beliefs and concerns that align closely with the general beliefs and concerns of all shareholders.  This assumption will be especially true if you have or are looking to secure a sophisticated investor for your business.

The Annual Meeting season is off and running and the trends that were observed in 2011 and 2012 are expected to continue in the 2013 season. 

So how is 2013 shaping up?

According to Proxy Monitor (www.proxymonitor.org/), a review of shareholder proposals for 170 companies, whose annual meetings are scheduled from 01.09.2013 through 05.23.2013, show three primary concerns:

  • Corporate Governance (74 proposals) – This category includes such items related to the legal structure of the organization, i.e. voting rules, separation of Chairman and CEO, special meetings, written consent, proxy access…   Current Events – (Wall Street Journal,  2/20/2013) Investors Seek to Split J.P. Morgan Top Posts, by Dan Fitzpatrick
  • Executive Compensation (202) – This category includes items such as say-on-pay, equity compensation rules, golden parachutes…
  • Social Policy (78) – Includes items which include animal rights, employment rights, sustainability…

Who is sponsoring these shareholder proposals?

According to Ernst & Young LLP “Proxy season 2013 Preview “, individual investors account for 27% of the proposals; socially responsible investors 21%; public funds 20%; labor funds 16%; faith based funds 10%; and Other 6%.

What is not included in this review are the proposals that do not make it to the annual meeting, either because there is no substantial support or the issue is resolved/negotiated, prior to reaching the annual meeting.

How does your organization compare?

Author: Regis Quirin
Visit Regis's Website - Email Regis
Regis Quirin is a financial executive with 23 years of corporate experience, i.e. New York Stock Exchange, JP Morgan Chase, and GMAC ResCap; and 15 years working with small and medium-sized entities, i.e. joint ventures, start-up entities, established businesses. In 2014, Regis published "Redesign to Turnaround Underperforming Small and Medium-Sized Businesses" available via Amazon.
© Copyright 2013 Regis Quirin, All rights Reserved. Written For: CFO Tips - What you need to know, to be a CFO TODAY!

Regis Quirin

Regis Quirin is a financial executive with 23 years of corporate experience, i.e. New York Stock Exchange, JP Morgan Chase, and GMAC ResCap; and 15 years working with small and medium-sized entities, i.e. joint ventures, start-up entities, established businesses. In 2014, Regis published "Redesign to Turnaround Underperforming Small and Medium-Sized Businesses" available via Amazon.

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