| NEW YORK/BOSTON March 23
NEW YORK/BOSTON March 23 For the first time in
more than a decade, Goldman Sachs Group Inc has managed
to avoid any proxy battles with activist shareholders by
convincing investors and securities regulators that voting on
several proposed corporate policy changes were unnecessary.
The Wall Street bank this year faced shareholder proposals
on topics ranging from its corporate structure to its financial
ties to a controversial oil pipeline, according to filings with
the U.S. Securities and Exchange Commission.
The issues would have been up for a vote at Goldman's annual
meeting in April. But in at least two cases, shareholders
withdrew proposals after Goldman made concessions; in another
three, the SEC sided with the bank's view that the proposals
were not worth including.
A Goldman spokeswoman and SEC spokesman both declined to
The last time the bank had a proxy free of shareholder
proposals was in 2006, which covered the prior year, said proxy
adviser Institutional Shareholder Services.
While Goldman may still face questions about its executive
pay, it stands out among big U.S. banks that have so far filed
proxies, all of which are facing battles at their upcoming
"It's unusual for a large company, particularly large
financial institutions that attract public attention, to have no
shareholders proposals on their proxy," said Yaron Nili, a law
professor at the University of Wisconsin who focuses on
For many years, management teams of big banks dismissed
activist shareholders as nuisances and their issues as
irrelevant. But after the 2008 financial crisis, their annual
meetings and investor gatherings became circus-like events:
Protesters shouted down executives over bailouts, decried
societal failures and, in one case, a topless female began
chanting on stage in front of a conference room.
In 2010, Goldman faced seven proposals - its biggest number
ever - addressing topics like climate change and executive
compensation, according to ISS.
Goldman management began making a greater effort to engage
with small investors, looking to restore the bank's reputation
after critics cast it as the greediest on Wall Street.
"As the financial crisis gets further in the mirror,
Goldman Sachs seems to be less in the spotlight," said Patrick
McGurn, special counsel for ISS.
Last year the bank held 150 meetings focused on corporate
governance with 77 shareholders in total, according to its
In interviews, some investor activists said Goldman deserves
"Their willingness to engage is meaningful," said Danielle
Fugere, president of As You Sow, a California nonprofit that
withdrew a resolution it had filed calling for Goldman to report
on its financial involvement in a contentious Dakota pipeline
project. In return, Goldman agreed to review policies on human
rights and other issues.
In other cases, Goldman won permission from regulators to
leave measures off its proxy like a union-backed proposal that
would have barred certain equity awards for executives leaving
to enter government service.
Bank of America Corp, Citigroup Inc and Wells
Fargo are each facing at least four proposals. JPMorgan Chase &
Co and Morgan Stanley have not yet filed their
proxies, though SEC filings indicate that they successfully
fought off several.
The toughest job for Goldman this year may be to win
shareholder backing for its executive pay, which won support
from just 66 percent of votes cast last year. Support for
executive pay among Russell 3000 companies averaged 91 percent
last year, according to consulting firm Semler Brossy.
After meeting with shareholders, Goldman made changes such
as cutting a long-term award for Chief Executive Lloyd Blankfein
amid concerns it was too complex. The board awarded Blankfein,
who is also chairman, $20.2 million for his work last year.
(Reporting by Olivia Oran in New York and Ross Kerber in
Boston; Editing by Lauren Tara LaCapra and Bernard Orr)