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Nuns on the run…ning of Coca-Cola

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In other "say on pay" news, the sisters of St. Scholastica Monastery are back in the habit this proxy season. Sister Susan Mika is director of corporate responsibility of the St. Scholastica Monastery near San Antonio. Yes, monasteries have directors of corporate responsibility. The nuns are having an active proxy season this year (you read that correctly), taking on issues from executive compensation at Coca-Cola to the year’s most penitent legumes grown by Cargill. Sister Susan is pushing a “say on pay” shareholder resolution at Coke that would require a direct shareholder vote to approve executive compensation. The nuns own $25k worth of Coke stock, which gives them a 0.0000002% stake in the company, or at least enough to take issue with Neville Isdell’s $250k travel budget. This is $250k that can’t come from Isdell's $26mm annual take-home pay.
The nuns have an active history of fighting for various corporate reforms, historically lobbying for everything from wage hikes at Alcoa to the elimination of genetically modified crops at DuPont. Other organizations are following suit, from BusinessWeek:

Coke isn't the only company facing shareholder resolutions for "say on pay" provisions. This year, a total of 60 such shareholder measures have been filed at public companies—up from seven a year ago. The proposals have been pushed by an unusual group of activists, from the Benedictine Sisters to the American Federation of State, County & Municipal Employees (AFSCME) to Walden Asset Management, a socially responsible investing firm. This week, at least three other companies face "say on pay" votes: Citigroup (C), U.S. Bancorp (USB), and Wachovia (WB).

Sisters on a Mission at Coke – [BusinessWeek]


Nuns, Whores, DCFs

For some reason it is corporate governance day at Dealbreaker, so here is a grab-bag of inchoate nonsense (for a change!). First of all look at this: The third-largest U.S. proxy adviser recommended that El Paso Corp shareholders vote against a proposed $23 billion sale of the company to Kinder Morgan Inc, switching its position after comments made by a Delaware judge. Egan-Jones Proxy Services said in a report that it was withdrawing its endorsement of the deal because of "the conflicts of interest cited by (Delaware Chancery Court judge Leo Strine) and the attendant doubts cast on the deal." How should you take this? Well, one way to take it would be: if you paid me to tell you how to vote on things, you'd probably want me to look into those things and decide if they're good things for you, and if they are tell you to vote for them and if not etc. So Egan-Jones* went and looked at this merger and decided it was a good merger and that its clients should vote for it. Then they learned about the conflicts of interest cited by the Delaware court, most of which were publicly available long before the opinion came out,** and changed their minds. Suggesting that they didn't really do a bang-up job of examining the merger to begin with. But that's a stupid way of looking at Egan-Jones's role because, really, you're an EP shareholder and you're like "oh Egan-Jones ran a DCF and this price looks good to them"? You can go read the DCFs of actual investment banks if that's the sort of thing that gets you going. Nobody's actually paying proxy advisors (do people pay them? I don't know) for actual advice on how they should actually vote their shares. Instead they're paying (maybe?) for some vague patina of good "corporate governance," which means something like "good processes and independent boards and no conflicts of interest" and gets lots of chin-stroking academic articles written about it.