Fiduciary & Fee-Only Financial Advisors and Planners
Contact: 614-441-9605 / email@example.com
We have adopted this voting policy which we believe is reasonably designed to ensure that we vote proxies in the best interests of client-shareholders consistently to maximize long-term returns while holding the applicable companies/funds responsible for the actions.
We use what we believe are reasonable efforts to identify circumstances in which there is a conflict of interest in voting proxies between the interests of clients, for whom we vote shares, and those of rebel Financial LLC and/or any affiliated person of the Advisor.
We will vote proxies relating to the following matters as listed below. Where a proxy proposal is presented which is not listed below, we will vote in accordance with the most similar applicable policy which is stated below, or on a case-by-case basis in the manner which we believe will maximize the client’s investment return, while emphasizing corporate/social accountability. If we have identified a conflict of interest and have no general proxy voting policy on the matter presented, we will take other reasonable steps to help assure that the votes cast are in the client’s best interests.
Our voting policies are premised on the following principles:
- Maximization of investment return is the primary component;
- Good corporate governance is critical to maximizing long-term investment returns;
- Increasing shareholder involvement in corporate governance will help maximize investment returns; and
- Self-dealing by or conflicts of interest of company insiders are not in the Fund’s best interests.
I. The Board of Directors
A. Voting on Director Nominees in Uncontested Elections
Votes on director nominees in uncontested elections are made on a case-by-case basis, examining the following factors:
- the long-term corporate performance record relative to a relevant market index or indices;
- the composition of the board and key board committees;
- the nominee’s attendance record at board and committee meetings; and
- the nominee’s investment in the company.
In cases of significant votes and when information is readily available, we may also review:
- corporate governance provisions and takeover activity;
- board decisions regarding executive compensation;
- director compensation;
- the number of other board seats held by the nominee; and
- interlocking directorships.
Having examined such factors, unless we find an important reason to vote against or withhold votes for an uncontested nominee, we generally vote to elect such nominees.
B. Chairman and CEO are the Same Person
We vote for shareholder proposals that would require or propose that the positions of chairman and CEO be held by different people. Generally, we do not even like corporate executives to members of the board of directors at all.
C. Majority of Independent Directors
We vote for shareholder proposals that request that the board be comprised of a majority of independent directors.
D. Board Committees
We vote for shareholder proposals that request that the audit, compensation or nominating committees be comprised exclusively of independent directors.
We vote against or withhold votes for non-independent directors who serve on the audit, compensation or nominating committees of the board.
We vote against or withhold votes for nominees who serve on the compensation committee if they have approved executive or director compensation arrangements which we would vote against under our guidelines in Section II below.
E. Stock Ownership Requirements
We review on a case-by-case basis shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director or to remain on the board. While this can serve a good purpose, it could restrict a company’s choices or incentivize too many stock awards (restricted stock) to be given to place someone on the board that would have been placed regardless.
F. Term of Office
We review on a case-by-case basis shareholder proposals to limit the tenure of outside directors.
G. Director and Officer Indemnification and Liability Protection
We vote against proposals to limit or eliminate director and officer liability for monetary damages for breach of the duty of care, or to expand indemnification coverage beyond gross negligence.
H. Charitable Contributions
We vote against shareholder proposals to eliminate, direct or otherwise restrict charitable contributions.
II. Executive and Director Compensation
In general, we vote for executive and director compensation plans which reward the creation of shareholder wealth and are focused on long-term growth rather than short-term profiteering. However, we believe that excessive executive compensation is detrimental to the long-term health of most organizations and society in general. In evaluating a plan, we try to determine equitable compensation for performance tendered from executives while balancing the needs of the organization, employees, and shareholders. We value performance-based compensation with executives being held accountable for bad, as well as good, performance.
We vote for proposals to submit executive or director compensation plans for shareholder approval.
We vote against executive or director compensation plans that include the:
- ability to re-price underwater options without shareholder approval;
- ability to issue options with an exercise price below the stock’s current market price;
- ability to issue reload options; or
- automatic share replenishment (“evergreen”) provisions.
We vote against plans where total potential economic dilution (including all equity-based plans) exceeds 15% of the shares outstanding.
We vote against plans if annual option or similar grants have exceeded 2% of shares outstanding, or if options have been repriced within the past two years without shareholder approval.
B. OBRA-Related Compensation Proposals
We vote for proposals to amend shareholder-approved plans to include administrative features, add performance goals, place a cap on the annual grants any one participant may receive to comply with or otherwise qualify the plan for favorable tax treatment under the provisions of Section 162(m) of OBRA.
C. Shareholder Proposals to Limit Executive and Director Pay
We review all shareholder proposals that seek to limit executive and director pay on a case-by-case basis, but generally we support them. We believe that most executive compensation plans/programs are outlandish and should almost never exceed $2,000,000 annually for any one individual unless they are founders and/or there are extraordinary circumstances. We reject the argument that recent executive pay is only competitive and view the excesses of the last decade as misuse of shareholder value that should have been reinvested in the company or returned to shareholders.
D. Golden and Tin Parachutes
We vote for shareholder proposals to have golden and tin parachutes submitted for shareholder ratification. Once they reach a vote we will generally vote against Golden/Tin Parachutes unless there are significant financial reasons to the contrary, which would benefit shareholders.
E. Employee Stock Ownership Plans (ESOPs)
We vote for proposals that request shareholder approval in order to implement an ESOP or to increase authorized shares for existing ESOPs, except in cases when the number of shares allocated to the ESOP is greater than five percent of the outstanding shares.
F. 401(k) Employee Benefit Plans
We vote for proposals to implement a 401 (k) savings plan for employees.
III. All other shareholder issues:
As to all other shareholder issues up for vote, we use our discretion and best judgement to vote our clients’ shares for the benefit of our clients above all else. We take our fiduciary responsibility seriously and vote our clients shares to make sure their interests are heard and implemented.
*We will make an attempt to vote on all proxies that we receive for our clients. However, due to the veracious demands that are sometimes placed on our small firm, there may be times when we are unable to vote on every issue because we did not have the time to do proper due diligence and we will then have to abstain from those particular votes. Also, there will be times where communication delays/errors between us and our custodians could inhibit our ability to vote in a timely manner and we cannot guarantee that we will be able to vote on every issue at all times. However, we will work diligently to complete all possible proxies at our disposal to best of our abilities.