DaVita HealthCare Partners $DVA, is one of the stocks in my portfolio. Their annual meeting is June 17, 2014. ProxyDemocracy.org had collected the votes of three funds when I checked and voted on 6/10/2014. I voted with management 50% of the time. View Proxy Statement. Read Warnings below. What follows are my recommendations on how to vote the DVA proxy in order to enhance corporate governance and long-term value.
DVA's Summary Compensation Table shows the highest paid named executive officer (NEO) was CEO Kent J. Thiry at about $17.1M in 2013. I'm using Yahoo! Finance to determine market cap ($15.4B) and Wikipedia's rule of thumb regarding classification. DVA is a large-cap company. According to Equilar (page 6), the median CEO compensation at large-cap corporations was $9.7 million in 2012, so DVA is well over that. DVA shares underperformed the NASDAQ over the most recent one year period, but outperformed in the two and five year periods.
Because pay was substantially above median and because of the problems noted by GMIAnalyst, I voted against the pay package. I voted against the stock plan, since it would dilute the value of our shares by more than 10%. I also voted against the members of the compensation committee: Pamela M. Arway, Chair, Paul J. Diaz, Peter T. Grauer and Roger J. Valine.
Multiple related party transactions and other potential conflicts of interest involving the company's board or senior managers should be reviewed in greater depth, as such practices, even when limited to current market rates, raise concerns regarding potential self-dealing or abuse. We note that related party transactions are flagged at a majority (50.8%) of companies in United States.
I'm concerned that more than 20% of fees paid to the auditor were for work other than the audit. That is approaching the level where it could become a conflict of interest. I voted to ratify the auditor.
2.4 Independent Chair/Lead Director: The board should be chaired by an independent director. The CEO and chair roles should only be combined in very limited circumstances; in these situations, the board should provide a written statement in the proxy materials discussing why the combined role is in the best interests of shareowners, and it should name a lead independent director who should have approval over information flow to the board, meeting agendas and meeting schedules to ensure a structure that provides an appropriate balance between the powers of the CEO and those of the independent directors.
If you wish to present a proposal for action at the 2015 annual meeting of stockholders and wish to have it included in the proxy statement and form of proxy that management will prepare, you must notify us no later than January 6, 2015 in the form required under the rules and regulations promulgated by the SEC. Otherwise, your proposal will not be included in management's proxy materials.
From Yahoo! Finance: DaVita HealthCare Partners Inc.'s ISS Governance QuickScore as of Jun 1, 2014 is 8. The pillar scores are Audit: 1; Board: 7; Shareholder Rights: 3; Compensation: 10. Brought to you by Institutional Shareholder Services (ISS). Scores range from "1" (low governance risk) to "10" (higher governance risk). Each of the pillar scores for Audit, Board, Shareholder Rights and Compensation, are based on specific company disclosures.
Item 5.	Stockholder proposal regarding the board chairmanship.