August 6th, 2009
By Doug Chia, Senior Counsel & Assistant Corporate Secretary, Johnson & Johnson
This is my first post on JNJ BTW.
Today, I’m writing on a subject near and dear to my heart—shareholder voting. You may have heard that earlier this month the U.S. Securities & Exchange Commission (SEC) announced a number of corporate governance reforms aimed at shoring up investor confidence. You can read about all of those reforms in the SEC’s press release, but I’d like to highlight in this post what is perhaps the most significant of these reforms—one that may directly impact you if you own Johnson & Johnson stock through a brokerage account–the elimination of the “broker vote” in uncontested director elections.
For those of you who don’t live and breathe this subject, I’ll attempt to translate that into plain English.
Previously, under the rules of the New York Stock Exchange, if stock brokers didn’t receive instructions from clients on how to vote their shares on the election of the board of directors at an upcoming annual meeting, the broker had the discretion to vote those uninstructed shares as they deemed appropriate. Since typically retail brokerage account holders who did vote tended to vote in favor of the recommendations made by the listed company’s management team, most brokers voted uninstructed shares along management’s recommendations.