1. Don't Rock the Vote, Baby
You always have to be on the lookout for shareholder democracy. Otherwise, that sinister scourge could insinuate itself into your company and -- horrors! -- actually take hold.
Yep, that's what we thought this week when we heard the latest news about a shareholder resolution proposed for
(DIS - Get Report)
annual meeting next year.
|Mickey Mouse Democracy
Can't be too careful
Last month, you see, activist Disney shareholder groups got the blessing of staffers at the
Securities and Exchange Commission
to submit for vote a resolution asking Disney to enable certain shareholders, under certain circumstances, to easily nominate a limited number of independent directors for election to the board.
Lest democracy run amok, the resolution -- somewhat similar to proposals already kicking around -- had a number of limitations that would have prevented
Shareholders Gone Wild
madness. To make a nomination, the shareholder or shareholder group would have had to hold at least 5% of stock for two years. And, given Disney's 11-member board, the shareholder slate -- which would be running, presumably, against the board's full slate -- would be limited to two directors.
Well, it seems a little bit of democracy is still too much. As
The Wall Street Journal
reported Wednesday, after some complaining from Disney, the SEC staff reversed itself and gave Disney the green light to withhold the resolution from a shareholder vote.
Whew! That was close. If the SEC had let that through, who knows how many more dominoes would be knocked over? Pretty soon, U.S. citizens would start asking for the right to nominate presidential candidates. Lord knows where that would lead us.
2. It's All About the Benjamins, Franklin
CEO Franklin Raines has a minor disagreement with the mortgage giant, we learned Monday.
That should be the least of his worries.
Raines announced his retirement Dec. 21, soon after
the SEC demanded Fannie Mae restate its books
for the past few years. The correction is expected to erase $9 billion in profit from Fannie Mae's books.
But exactly when Raines' retirement takes effect is a matter of dispute. The company says it happened Dec. 21, the day Raines effectively left the building. Raines says his retirement actually will take place six months from now.
What's at stake? Oh, somewhere north of a half-million. According to a Fannie Mae filing at the SEC Monday, should Raines' scenario prevail, he'd be due $600,000 in pay for the next six months. And his lifetime annual pension, which Fannie Mae calculates to be $1,372,716, would be nudged upward to $1,395,600 instead. Every little $22,884 helps, you know.
What isn't in dispute is that Raines is supposed to have a lot more coming to him: millions of dollars' worth of additional stock options, performance-based equity grants, bonuses, deferred compensation, life insurance premium payments, and medical and dental coverage for Raines, his wife and dependents under age 21.
Oops! We almost forgot the annual $10,000 in charitable matching gifts!
Whether he can collect all that is another matter, though. As Fannie Mae said Monday, the Office of Federal Housing Enterprise Oversight -- even though it approved Raines' termination benefits in November -- requests Fannie Mae not pay any termination benefits to Raines until it has a chance to further review them. OFHEO says it's concerned about whether there have been "enhancements" to the benefits since the package was agreed upon. There's also that little public relations problem of a vast payout to a guy on whose watch Fannie Mae may have overstated its profit by $9 billion.
So we don't expect Raines will be seeing his retirement money -- not to mention that $600,000 base pay -- anytime soon. Dick Grasso -- another chief of a semipublic institution
who left under a cloud
and whose retirement package aroused outrage -- has been fighting for his retirement kitty for the past 15 months but looks no closer to getting his hands on the dough.
You know, if the two of them ever get together to commiserate, we at the Research Lab promise to pay their bar tab. We understand how tough it can be for seniors if you don't receive your monthly check.