Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2812)	4/17/2003 12:58:02 PM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2882

Fidelity's Vote On Analog Holder Proposal Draws Scrutiny March 12th, 2003 By PHYLLIS PLITCH Of DOW JONES NEWSWIRES NEW YORK -- By the time a new Securities and Exchange Commission rule kicks in requiring mutual funds to publicly disclose how they voted their proxies, this year's annual meetings will have come and gone. Backers of a slew of shareholder proposals calling on companies to expense employee stock options, however, would like to know now where Fidelity Investments - the world's largest fund manager - stands on stock option expensing. The hot-button disclosure issue surfaced Tuesday after shareholders voted down a nonbinding resolution submitted by the United Brotherhood of Carpenters and Joiners of America recommending that Analog Devices Inc. (ADI) expense future employee stock options. Analog was the first of about 75 companies that face the same shareholder proposal to hold its annual meeting this proxy season. Specifically, the proposal's proponents are questioning whether Fidelity Investments represented the swing vote against their cause, as they suspect. Of about 280 million shares voting on the proposal, about 171 million, or 61%, were cast against the proposal compared with 103 million, or roughly 37%, in favor, with the rest abstaining. If Fidelity voted its 52 million shares against the proposal, that would mean that Fidelity tipped the scale in management's favor. Analog's board had urged shareholders to oppose the proposal. The question of how Fidelity voted at Analog could draw greater scrutiny given that the fund company also handles Analog's 401(k) retirement plan. One of the key arguments made by investor activists who pressed the SEC for the new disclosure rules was concern about how potential conflicts of interest might influence voting decisions. "Here you have in the Analog vote a prime example of why we need mutual fund voting disclosure," said Ed Durkin, director of special projects at the Carpenters, which has been joined by several other building trade unions in blanketing U.S. companies with the proposals. "At least in the absence of that, there should be better disclosure of their voting position. It's an important public policy issue." A spokesman for Fidelity said as a matter of policy the fund company doesn't disclose proxy votes. Fidelity doesn't have a blanket policy on option expensing in voting guidelines posted on its Web site and considers the issue on a case-by-case basis. Whether or not Fidelity manages a retirement fund at a company has no bearing on how the company votes its proxies, the spokesman said. "When we vote proxies we only consider our mutual fund shareholders' interests and both Fidelity and our mutual fund shareholders want to maximize the performance of the funds," he said. "We have a fiduciary responsibility to represent the economic interests of the holders in our funds." Under the new SEC rules, approved in January, the first proxy voting disclosure period begins this July 1, and runs through the end of June, the following year. The funds don't have to publicly disclose the voting record, however, until Aug. 31, 2004. The delay is apparently not stopping union activists - whose agitation played a significant role in bringing the issue to regulators' attention - from pushing fund companies to disclose proxy votes even earlier. "If disclosure is important to investors and the capital markets seem to believe it is, disclosure should begin right away," said Bill Patterson, director of the AFL-CIO's office of investments. "The expectation that investors have, and that we certainly have, is that after this proxy season, disclosure will begin and mutual fund companies as well as other investment managers will step forward and tell shareholders how they voted their shares."