NEW YORK/BOSTON (Reuters) - For the first time in more than a decade, Goldman Sachs Group Inc (GS.N) 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.
In 2010, Goldman faced seven proposals - its biggest number ever - addressing topics like climate change and executive compensation, according to ISS.
Goldman management began making a greater effort to engage with small investors, looking to restore the bank’s reputation after critics cast it as the greediest on Wall Street.
“As the financial crisis gets further in the mirror, Goldman Sachs seems to be less in the spotlight,” said Patrick McGurn, special counsel for ISS.
Last year the bank held 150 meetings focussed on corporate governance with 77 shareholders in total, according to its proxy.
In interviews, some investor activists said Goldman deserves credit.
“Their willingness to engage is meaningful,” said Danielle Fugere, president of As You Sow, a California nonprofit that withdrew a resolution it had filed calling for Goldman to report on its financial involvement in a contentious Dakota pipeline project. In return, Goldman agreed to review policies on human rights and other issues.
In other cases, Goldman won permission from regulators to leave measures off its proxy like a union-backed proposal that would have barred certain equity awards for executives leaving to enter government service.
Bank of America Corp (BAC.N), Citigroup Inc (C.N) and Wells Fargo are each facing at least four proposals. JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N) have not yet filed their proxies, though SEC filings indicate that they successfully fought off several.
The toughest job for Goldman this year may be to win shareholder backing for its executive pay, which won support from just 66 percent of votes cast last year. Support for executive pay among Russell 3000 companies averaged 91 percent last year, according to consulting firm Semler Brossy. After meeting with shareholders, Goldman made changes such as cutting a long-term award for Chief Executive Lloyd Blankfein amid concerns it was too complex. The board awarded Blankfein, who is also chairman, $20.2 million for his work last year.
Reporting by Olivia Oran in New York and Ross Kerber in Boston; Editing by Lauren Tara LaCapra and Bernard Orr