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Governance Weekly function pr1(filename) {window.open(filename,"pr1","menubar=no,location=no,toolbar=no,status=no,scrollbars=yes,resizable=yes, width=600,height=600") }    Governance Weekly In Brief Proxy Access Gets Majority Support for the First Time In the first majority vote on the topic, a proxy access resolution filed by a dissident investor was approved by shareholders at Cryo-Cell International, a small cap biotech firm in Florida. Cryo-Cell reported that shareholders approved the non-binding proposal on July 16, but the company’s press release did not include detailed vote results. Cryo-Cell, which reported $17.2 million in 2006 revenue, collects and preserves stem cells from umbilical cord blood. Management opposed the access proposal, which was filed by investor David Portnoy. He is part of the “13D Group” of dissidents who own a 13.2 percent stake and waged a proxy fight for all six seats on the company’s board. Based on preliminary vote counts, Cryo-Cell reported that it “appears” that all the management nominees were elected. The Portnoy proposal asks the company to permit investors to vote on procedures to allow long-term shareholders to nominate board candidates to appear on the management proxy statement. The resolution urges the company to permit at least one nominee from an investor or shareholder group that has held more than a 5 percent stake for more than two years. Under Portnoy’s proposal, shareholders would be allowed to offer two nominees if the board expands to more than eight seats; if the board grows to 20 or more directors, then three nominees would be allowed. The vote at Cryo-Cell is the third significant investor vote for proxy access this year. Earlier this year, a binding proposal at Hewlett-Packard received 43 percent support, while a non-binding resolution won a 45 percent vote at UnitedHealth Group. Proxy access supporters hope that these votes will persuade the Securities and Exchange Commission to continue to allow investors to file proposals that seek proxy access provisions. Last week, The Wall Street Journal reported that the SEC was considering imposing a 5 percent threshold for shareholders to bring access bylaw proposals. Access supporters warn that a 5 percent filing threshold would be too high for most long-term investors to overcome. --Ted Allen CalPERS Again Asks Dollar Tree for Annual Board Elections The California Public Employees’ Retirement System (CalPERS) is urging Dollar Tree Stores to heed a majority shareholder vote for the pension fund’s proposal to remove the company’s supermajority voting requirements. The discount retailer hasn’t released vote results from its June 21 meeting, but the pension fund reports that the proposal received 83 percent support. “Inaction by the Governance Committee and Board as a whole, to the resounding voice of 83 percent of the proxy votes cast … is unacceptable and ultimately suggests a board culture that is not accountable to the owners of the company--its shareholders,” Dennis A. Johnson, head of portfolio management for CalPERS, wrote in a letter to Thomas Saunders III, who chairs the company’s nominating and corporate governance committee. The June 28 letter asks Dollar Tree to act immediately to amend its bylaws and eliminate the requirement that certain governance changes need a vote of more than 65 percent of shares to pass. Management at the Chesapeake, Virginia-based firm has promised to take the vote result and the proposal under advisement, and plans to discuss how to move forward at the upcoming October board meeting, Shelly Davis, a spokeswoman for Dollar Tree, told Governance Weekly. The vote at Dollar Tree is the best showing this year for shareholder proposals to rescind supermajority vote requirements. Those resolutions averaged 72 percent support over 17 meetings where final or preliminary results are known. Other notable votes include 81 percent support at Newell Rubbermaid and Kimberly-Clark, the companies reported. –L. Reed Walton Jackson Launches Campaign for Change at Motorola Eric Jackson, the shareholder activist whose Web-based dissident campaign resulted in significant withhold votes against Yahoo! directors, is now targeting the board at mobile-telephone maker Motorola. Jackson introduced his “Plan B” for governance at Motorola via his weblog, Breakout Performance, on July 9. The plan includes removing Chairman and CEO Ed Zander, just as Jackson’s campaign at Yahoo advocated the removal of then-CEO Terry Semel, who stepped down in June less than a week after the company’s annual meeting. “We think that the company is in desperate need of some changes of direction,” Jackson told Governance Weekly. “We don’t think the solution is as simple as just replacing Mr. Zander, but [it’s] part of the solution.” Jackson contends that Zander has done little to encourage innovation since the introduction of the of the company’s popular RAZR mobile handset. Jackson plans to seek the ouster of four longtime Motorola board members; he contends that the Illinois-based company needs new directors with more experience in the communications field. Motorola is officially withholding comment on the matter, a company spokesman told Governance Weekly. Jackson isn’t the first shareholder to try for change at Motorola. Earlier this year, billionaire investor Carl Icahn staged a proxy contest, aiming to win a seat on the company’s board. The bid narrowly failed, but Icahn won 45 percent of “for” and “against” votes, according to news reports, including shares of some significant Motorola stakeholders such as ClearBridge Investments, which held a 2.2 percent stake. Jackson said that he received a pledge of 47,000 shares from fellow Motorola shareholders in the first 24 hours after launching his “Plan B” effort, and 120 people representing 600,000 shares after the first week. According to Jackson, his campaign at Yahoo won the support of holders of over 2 million shares. In advance of Motorola’s 2008 meeting–a date for which has yet to be announced, Jackson said, “we’re well on our way to surpassing Yahoo.” –L. Reed Walton