For Goldman Sachs, a rare pass from shareholder resolutions

Thu Mar 23, 2017 4:35pm EDT
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By Olivia Oran and Ross Kerber

NEW YORK/BOSTON (Reuters) - For the first time in more than a decade, Goldman Sachs Group Inc (GS.N: Quote) 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 comment.

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 annual meetings.

"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 corporate governance.

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.   Continued...

A sign is displayed in the reception of Goldman Sachs in Sydney, Australia, May 18, 2016.  REUTERS/David Gray/File Photo