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Shareholder Activism

FFA Investors can use their voices and votes to hold corporations accountable for their policies and practices related to social, environmental, and corporate governance issues.

What can shareholders do?
-Voting of Proxies - All shareholders may vote on annual meeting agenda items
Letters - Letters may be sent any time (all public companies have Investor Relations Depts.)
-Filing Resolutions - Shareholders may petition companies for annual meeting agendas when they have an investment of at least $2,000. However, companies petition the SEC to get most resolutions that do not have significant legal support dismissed.
-In-person meetings/dialogues - Letters and resolutions may lead to discussion of issues with company executives Divest – sell your shares .

It should be noted that resolutions often pass with less than 30% in favor.

If investors do not vote, management has the right to vote for those shareholders. Mutual Funds that do not have a socially responsible objectives (Fidelity, Vanguard, Merrill Lynch, Franklin Templeton, Federated Investors,…) have a policy to support management or abstain from voting on issues that address social, ethical, political and governance issues.

An easy way to participate is invest in mutual funds that share your values. There are now more than 250 socially responsible mutual funds available.

Another way to get involved in shareholder advocacy is with a foundation, church, synagogue or concerned organizations.

The total number of shareholder resolutions on social, environmental and governance issues has increased to historic levels.

Corporate Political Spending political contributions play a large part in our political system. In 2008, the politician who spent the most won 94% of the house seats and 73% of the senate seats.

Shareholder support for transparency and accountability for corporate political spending has steadily grown. In 2009, it was the number one social shareholder resolution. Due in part to shareholder pressure, 35 of the S&P 100 companies have agreed to disclose and require oversight of their political spending with corporate funds. Including AT&T and Verizon.

Climate Change Resolutions related to climate change were the second most common social shareholder resolutions.. Last year, there were 43 climate related resolutions filed by state/city pension funds and other institutional investors. With pressure from socially responsible mutual funds, 19 firms agreed to report on their sustainability initiatives. American Electric Power received a resolution asking it to consider the economic risk of carbon dioxide and other emissions. After receiving 27% support of the shares voted, they formed a subcommittee of its board on climate change.

Executive Compensation A coalition on institutional and individual investors with combined assets of more than $1 trillion joined to urge companies to adopt an advisory vote on executive compensation (also known as Say on Pay). This provided a channel for shareholders to express their concerns to corporate boards about huge pay packages that seemed unrelated to financial performance. Companies included: Aflac, HR Block, Verizon, Pfizer – but there are many to go. Equal Employment In recent years, shareholders have been able to pressure dozens of companies to expand their non-discrimination policies to include discrimination based on sexual orientation. Shareholder’s can help bring about significant change in our society.

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SRI Presentation We have developed a presentation about Socially Responsible Investing. Please let us know if you are part of a group that would like us to present.

Monthly Performance If you would like to see how your holdings are doing on a monthly basis, we would be glad to email you a performance summary at the beginning of each month. Just let us know.

Market Report A monthly market summary is posted on our website near the beginning of each month. Please let us know if you would like us to email you a notice when the market report is updated.

Employee Retirement Plan Please let us know if you have or know of a company that would like a proposal from us to manage employee retirement accounts (401k, Simple, SEP, Pension Trust, Individual 401k …).

Free Portfolio Review We offer a free portfolio review along with a free upfront meeting for prospective clients. If you know of anyone who could benefit from our services, please have them contact us. The highest complement our clients can give is the referral of their friends and family.

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So many wonderful things are happening during this time of year. As I look at the various aspects of the whole self—mental, physical, spiritual, social and emotional, I feel I am developing in each one of these areas. I am taking a “Self-Mastery” course at the Center of Spiritual Living, Tucson and that has been a great enhancement of my life and also reinforces the work I discussed last time on the course, “Growing the Positive Mind.” All of this reinforces the joy and gifts of the wisdom years—nothing really new—just really experiencing, believing, and living the life that I choose to live. My joy in working with clients comes from experiencing people making conscious choices about how to live their life. It is so much fun to witness peoples lives changing and evolving. What could be better! Happy summer. Enjoy, have fun, live fully! Life is really short so live it!
Sylvia

Financial Freedom Associates

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Shareholder Activism