Proxy Vote

I've been voting proxies for various corporations. It's that time of year again. And I consistently vote against Board recommendations. Generally, Boards have a good idea how to best govern a corporation. I believe they take their fiduciary responsibilities seriously, but in one thing, I am appalled - allowing the sitting Chief Executive Officer (CEO) sit on the Board. Often this individual is also the Chairman of the Board. It's arrogant. I have no problem with former CEOs sitting on the  Board, or current CEOs retiring to the Board. It's the current, CEO sitting on the Board. Don't do it. Don't allow it. Vote against it.

It's a conflict of interest. The CEO is an employee. The only check on his behavior is his employer - the representatives of the shareholders - the Board of Directors. They determine is pay. They determine his performance. What if it's not in the interest of the Shareholders to increase a CEOs pay? Is the Board really going to vote against a bonus?

I vote against the CEO. He doesn't belong there. Of course, institutional investors apparently don't care. My protest is like a rodent giving a raptor an obscene gesture. It's not going to change the outcome, but it's an act of defiance that feels good. Or as the representative of a corporation told my Grandfather, it doesn't matter how you vote the principle shareholder has decided to endorse the sale.¹

Cheers!

¹ My Grandfather received a trust fund from his Grandfather. His Grandfather worked as an investment banker and was very successful acquiring holdings in the companies his Bank lent money to. (Is that another conflict of interest - probably not.) In any event, my Grandfather held significant holdings in many small regional companies. He was in the hospital at the time this particular statement was made - when he hadn't voted his shares, there was a concern on the Board that he was going to start a proxy fight. Of course, it didn't matter - the organization that was the principle shareholder had a controlling interest.