Q: So since they're the shareholders' representatives, do shareholders get to see them and give them suggestions?
A: For most individual shareholders, no. Unless you're a major shareholder with millions of dollars invested, you'll probably never interact with the board of a big company. Many companies will tell shareholders that if they want to contact board members, they need to write a letter and send it through the company, and companies often reserve the right to refrain from passing along the letters. Of course, a determined shareholder could probably circumvent the rules and track down board members' individual contact information on their own.
Q: Does the board get paid for this?
A: Almost always, and often a lot. At Goldman Sachs, board members were paid at least $358,000 if they served on the board for all of 2011, though the payment was entirely in restricted stock. The board held 15 meetings; the bank says that directors also "meet informally from time to time" and receive weekly informational packages about the bank.
Q: What are shareholders asking for this season?
A: Political requests are at the top of the list. Institutional Shareholder Services, which advises big shareholders how to vote, estimates that there are political proposals at about 100 companies this season.
Shareholders at Allstate, Caterpillar, Sprint and others are asking the companies to release more information about their political contributions, and Goldman Sachs, Kraft Foods, Verizon and others are being asked to release more information about their lobbying. A wealth management company in Boston is asking Google, Home Depot, Intel and others to let shareholders vote on whether they approve of the company's political contributions. Proposals at 3M and Bank of America go further, asking the companies to abstain from political spending.
Q: Does my vote count?
A: Sort of. Shareholder activists are constantly complaining that the odds are tilted in favor of the companies.
ISS calculates that 21 percent of shareholder proposals last year received a majority of votes cast. But that doesn't automatically mean they passed. Some proposals require a majority of all shareholders, not just those who vote. That's a standard that's far harder to obtain, because many shareholders don't vote.
Some may assume a proxy statement is junk mail and toss it. Others may never see their proxy because they have it sent to the banker who manages their investments, and they never pick it up. Companies can exercise tremendous muscle in the voting process if they choose, hiring "proxy solicitors" to call the big investors to try to influence how they vote their shares. Shareholders are also free to mount their own campaigns.
Most shareholder proposals are non-binding anyway. Citigroup shareholders just voted their disapproval for a $15 million pay package given last year to CEO Vikram Pandit, plus $10 million in retention pay. But Citigroup's board is free to disregard the shareholders' wishes.
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