Goldman dodges a shareholder battle that dogs rivals

Mon Apr 14, 2014 1:09am EDT
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By Lauren Tara LaCapra and Ross Kerber

NEW YORK (Reuters) - When Goldman Sachs Group Inc filed its shareholder proxy earlier this month, it was free of a proposal that has become increasingly popular among corporate governance activists: a demand for more disclosure about lobbying.

Goldman's big Wall Street rivals can't say the same. JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and Morgan Stanley all face lobbying-disclosure proposals this year. Some activist shareholders want the banks to be more transparent about their lobbying objectives, disclose more about the trade groups they belong to and say how much money they spend to influence policy.

Goldman persuaded the Needmor Fund - which had sponsored a lobbying-disclosure proposal on the investment bank's proxy in 2013 - not to try again this year. Goldman's lead director, James Schiro, went on a tour to hear the views of groups of shareholders after taking the role last year and sought to work out compromises, people who attended the meetings told Reuters.

"We don't want to engage after the fact, we want to be able to deal with the issues by listening and engaging ahead of time," said John F.W. Rogers, chief of staff and secretary to Goldman's board of directors. "We believe this approach has been very productive."

A representative for Needmor Fund, whose proposal received the support of just 5.64 percent of Goldman shareholders voting last year, said Goldman is moving in the right direction. For instance, the bank now issues periodic statements about its lobbying activities and political spending, and has an ongoing dialogue with shareholders about the disclosures.

"In light of their strong policy on political spending, as well as their partial disclosure on lobbying, investors decided not to pursue the lobbying resolution for this year," said Timothy Smith of Walden Asset Management, who represented Needmor in discussions with Goldman.

The steps Goldman has taken have gone over well with shareholders, Smith said. This year its proxy has just one shareholder proposal, down from four in 2013.

Goldman's private discussions with a variety of shareholder groups - whose concerns can range from return-on-equity to climate change - have allowed the bank to escape public-relations headaches and underscore its effort to repair its image. It had often been portrayed in the media and by critics as the poster child for Wall Street greed in the aftermath of the financial crisis.   Continued...

A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014. REUTERS/Lucas Jackson