Shareholder Proposal re: NO NEW stock options

Bill Sjostrom —  19 March 2007

DealBook reports that Goldman Sachs has included the following shareholder proposal from Evelyn Davis in its 2007 proxy statement:

RESOLVED: “That the Board of Directors take the necessary steps so that NO future NEW stock options are awarded to ANYONE, nor that any current stock options are repriced or renewed (unless there was a contract to do so on some).”

REASONS: “Stock option awards have gone out of hand in recent years, and some analysts MIGHT inflate earnings estimates, because earnings affect stock prices and stock options.”

There are other ways to “reward” executives and other employees, including giving them actual STOCK instead of options.

Recent scandals involving CERTAIN financial institutions have pointed out how analysts CAN manipulate earnings estimates and stock prices.

I did a Westlaw search to see whether Goldman filed a no-action request with the SEC to exclude the proposal. It appears that it did not. However, Ms. Davis submitted the same proposal to Pfizer. Pfizer did file a no-action request arguing that the proposal is excludable under Rule 14a-8(i)(7) because it “pertains to matters of Pfizer’s ordinary business operations, namely general compensation matters.” The SEC concurred.

3 responses to Shareholder Proposal re: NO NEW stock options


    If an IR professional were asked to free associate on the term “corporate gadfly,” 9 out of 10 will respond “Evelyn Davis.” Annual meetings are her life for reasons that defy any definition of “homo economicus.” That should tell you something.

    Elizabeth Nowicki 19 March 2007 at 11:39 am

    Rock ON, Ms. Davis. Good for you. Do we know who she is? If I get time, I will google her later. . . .