WHEREAS shareowners often lack the time and expertise to make the best voting decisions, yet prefer not to follow management’s recommendations blindly because
of possible conflicts of interest;
WHEREAS proxy advisory firms have established reputations for providing sound independent analysis to investors on proxy issues;
WHEREAS shareowners have a common interest in obtaining independent analysis, but often insufficient private interest to justify paying for it individually (the "free-rider" problem);
THEREFORE BE IT RESOLVED that Pfizer shareowners request the Board of Directors to hire a proxy advisory firm for one year, to be chosen by shareowner vote. Shareowners request the Board to take all necessary steps to enact this resolution in time to hold the vote at the year 2001 shareowner meeting, with the following features:
Any proxy advisory firm could put itself on the ballot by paying a minimal processing fee to Pfizer ($100 is suggested) and declaring the price of its services for the coming year, not to exceed $10,000.
The proxy advisory firm receiving the highest vote would be to be paid by Pfizer and expected to make its proxy analysis on Pfizer freely available for the year 2002 meeting.
The proxy advisory's analysis would be included with Pfizer's proxy materials for the year 2002 meeting or be otherwise widely distributed.
The quality of services rendered would not be policed by Pfizer, but rather by loss or gain of reputation by the proxy advisory firm.
This proposal is designed to:
enhance management accountability and good corporate governance by making professionally researched analysis available to all;
enfranchise investors by providing analysis of proxy issues, independent of management’s recommendations;
reduce the overall cost to shareowners of voting analysis through competitive bid and collective purchase;
encourage greater competition among proxy advisory firms to serve shareowner interests;
stimulate shareholders to submit shareholder resolutions or take other initiatives, knowing that independent analysis may prompt support if the proxy monitoring analysis appears favorable;
increase the likelihood that shareowners add to Pfizer's knowledge base and its ability to generate wealth.
Proxy advisory firms such as Institutional Shareholder Services (http://iss.cda.com), Investor Responsibility Research Center (http://www.irrc.org) and Proxy Monitor (http://www.proxymonitor.com) are frequently cited in the financial press. See "Venator Holders Are Urged To Support Dissident Slate" (Wall Street Journal 07/06/1999) and "ISS's Influence Grows In Proxy, Option Matters" (Wall Street Journal 11/10/1997).
Articles discussing the company-pay system for proxy advice are on the Corporate Monitoring website (http://www.corpmon.com/publications.htm). These include "Collective Action for Dispersed Shareowners" (Corporate Governance International, September 1999) and "The Internet Will Drive Corporate Monitoring". Possible future developments are presented in "The Corporate Monitoring Firm" (Corporate Governance: An International Review, January 1999) and "Corporate Monitoring: New Shareholder Power Tool" (Financial Analysts Journal, September/October 1998).
Additional articles and resources on the movement to enhance the return on capital, through increased accountability to shareholders, can be found at Corporate Governance (http://www.corpgov.net).