how to conquer angst and spurtheeconomy - wsj cfo ... ow © 2013...

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© 2013 Dow Jones & Company. All Rights Reserved. THEWALL STREET JOURNAL. Monday, June 24, 2013 | R1

JOURNAL REPORT

‘I’VE BEEN AROUND LONG ENOUGHTO REMEMBER A TIMEWHENINDUSTRYLEADERS USED TOWORK MORECOLLABORATIVELYWITHREGULATORS’

‘IF YOU ARE GOING TODEPLOYLARGE AMOUNTS OFCAPITAL,YOU’D LIKE TO KNOWWHAT THE RULES OFTHE ROAD ARE’

‘EVERY INSTITUTION CAN PLAYA ROLE IN GETTING PEOPLE TOSAVE MORE’

‘IT THREATENS OURECONOMICSTABILITYIF FAMILIES ARE IN APOSITIONWHERE THEYBORROW TO KEEP UPTHEIR CONSUMPTION’

‘IT FLABBERGASTS MEWHEN PEOPLEWHO ARE ALWAYS RHAPSODIZING ABOUTTHE PERFECTION AND BEAUTY OF THEFREE MARKETDON’T SEEM TO LIKEWHEN IT WORKS’

Mary Jo White on whereshe expects to focus atthe SEC, R4

Sheila Bair, H. RodginCohen and Tim Pawlentyon the banking system, R4

Joshua Gotbaum andDallas Salisbury on ourretirement challenge, R5

Alan Krueger on what’sholding back economicgrowth, R5

Patrick McGurn, NellMinow and Lynn Turneron shareholder rights, R6

The CFOs vote on theirtop management andpolicy priorities, R2

How to ConquerAngst and

Spur the EconomyMAYBE THIS IS JUST going to bea 2% sort of time for a while.

The economy may be on themend. Housing may be up. TheGrendel of the European cri-sis may be caged (for now).

And the chief financial of-ficers who joined The WallStreet Journal’s global CFONetwork in Washington lastweek may be in a better moodthan in 2012.

But the vibe is still decidedlybelt and suspenders. When DaveCote, chief executive of Honey-well International Inc., told thegathering that he expects mid-dling economic growth aroundthe world—2% in the U.S. each ofthe next three years, 0% in Eu-rope, 6% to 7% in China—there

wasn’t a word of disagreement.The CFOs signaled their own

lingering angst (about Washing-ton gridlock, global risk, cyberse-curity—the list goes on). Askedabout the piles of cash they’vebuilt up in the past five years,

nearly half said they’ve added tothem in 2013. Some 30% saidthey’re keeping levels the same.

The CFOs heard from a rangeof policy makers and experts:Mary Jo White, chairman of theSecurities and Exchange Commis-sion; Alan B. Krueger, chairman ofthe Council of Economic Advisers;Alan Greenspan, former FederalReserve chief; Richard Bejtlich,

expert on cybersecurity at Mandi-ant Corp.; and many others.

Then they offered their ownadvice: Want to diminish risk?Build better backups to globalsupply chains. Want to increaseinvestment in the U.S.? Address

the reasons why piles of cor-porate profit are held abroad.Want to maximize America’senergy boom? Uncork exportsof natural gas.

Not everyone will agreewith the recommendations. But doall this and a lot more, the CFOsargue in this report—and maybewe’ll see better than 2%.

Mr. Bussey is an assistant man-aging editor and executive busi-ness editor of The Wall StreetJournal. He can be reachedat [email protected] or onTwitter @johncbussey.

BY JOHN BUSSEY

Illustration by Julie Teninbaum

INSIDE

THE CFOS’ TOP PRIORITIES

Five task forces at the Journal’s CFO Network conferencepresented management and policy recommendations that chieffinancial officers, other corporate executives and policy makersshould pursue on subjects from managing energy costs toevaluating global risks (see page R2).

The full conference then voted these as the top five overallpriorities:

1 Lower Corporate TaxRate

Congress should repeal allcorporate tax preferences anduse the revenue to reduce thecorporate income-tax rate to25% or lower to be globallycompetitive and create moreU.S. jobs.

2 Improved CybersecurityCompanies should tackle

their own threats and pushfor government intervention.Encourage pacts betweengovernments on the issue.Encourage literacy in organi-zations about the dangers.

Improve anticipation of newvulnerabilities. Invest instrengthening security bytesting systems, for example,by hiring hackers. Improvesecurity around who has ac-cess to information.

3 Territorial Tax SystemCongress should enact a

territorial system to enablecompanies to deploy cashearned abroad in the U.S.,and to encourage investmentin the U.S., along with provi-sions to prevent erosion ofthe U.S. tax base.

4 Energy’s Chance of aLifetime

The oil and gas renaissance inthe U.S. is the chance of alifetime for economic revital-ization, growth, competitive-ness and sustainable job cre-ation at all income levels.Government must recognizethis opportunity and develop acoherent energy policy aroundthis rare opportunity.

5 Infrastructure InvestmentDevelopment of gas and

oil pipelines (including Key-stone XL) and electric trans-mission should be supportedby private-sector investmentand facilitated by governmentdecision making. The goalshould be to bring logistics inline with new supply, supportenergy efficiency and themanufacturing renaissance,and integrate renewables.

CM Y K CompositeCompositeMAGENTA CYAN BLACK

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R2 | Monday, June 24, 2013 THEWALL STREET JOURNAL.

The Task Forces’ PrioritiesCFO Network executives split up into five groups to debate their management and policy agendasin the following areas. Here are their top recommendations.

JOURNAL REPORT | CFO NETWORK

(Chief financial officers exceptas noted)

David Adams, Aimia Inc.Sean Aggarwal, Trulia Inc.Michael J. Angelakis,

Comcast Corp.Donald J. Ball, VSP GlobalRichardBeckert,CATechnologiesJay S. Benet, Travelers Cos.Michael Berman, General

Growth Properties Inc.Kevin Berryman, International

Flavors & Fragrances Inc.Bruce Besanko, OfficeMax Inc.Richard Bielen, Protective LifeJeffrey W. Bolton, Mayo ClinicFrank H. Boykin, Mohawk

Industries Inc.Werner Brandt, SAP AGJudy L. Brown, Perrigo Co.Frank Calderoni, Cisco SystemsJeffrey C. Campbell, McKesson

Corp.Paul Carbone, Dunkin’ BrandsPaul Clancy, Biogen IdecPamela J. Craig, AccentureMarcia Dall, Erie Insurance

GroupGeorge S. Davis, Qualcomm Inc.Robyn M. Denholm, Juniper

Networks Inc.David M. Denton,

CVS Caremark Corp.Charles Dockendorff, CovidienDaniel Durn, GlobalFoundriesFredrik Eliasson, CSX Corp.Joseph J. Euteneuer, Sprint

Nextel Corp.Nicholas C. Fanandakis,

DuPont Co.Adena Friedman, Carlyle

GroupFrank Friedman, Deloitte LLPWilliam J. Gerber,

TD Ameritrade Inc.Shantanu Ghosh, Senior Vice

President & Global Head ofPractice, Solutions & Transi-tions, Genpact Ltd.

Maria Henry, Hillshire BrandsRobert J. Hombach,

Baxter International Inc.Jay Horgen, Affiliated

Managers Group Inc.Anthony Hull, Realogy Corp.Ronald Hundzinski,

BorgWarner Inc.Hugh F. Johnston, PepsiCo Inc.Joe Kaeser, Siemens AGRobert M. Knight Jr., Union

Pacific Corp.Michael Koppel, Nordstrom Inc.Dan Leib, R.R. Donnelley &

Sons Co.Kevin Lenahan, Atlantic Health

System Inc.Kenneth A. Lewis,

Franklin Resources Inc.Patricia Little, KellyServices Inc.Jim S. Lusk, ABM Industries Inc.Owen Mahoney, Nexon Co.Thomas Mangas, Armstrong

World Industries Inc.

Bill Maw, Liquidnet HoldingsGreg Maxwell, Phillips 66Gary McArthur, Harris Corp.R. Perley McBride, Leap

Wireless International Inc.Karen McLoughlin, Cognizant

Technology SolutionsMichael McMurray,

Owens CorningFrank Mergenthaler,

Interpublic Group of Cos.Roger Millay,

Towers Watson & Co.Jon Moeller, Procter & GambleJames E. Moylan Jr.,

Ciena Corp.Pete H. Nachtwey, Legg Mason

Inc.Wolfgang Nickl,

Western Digital Corp.Bill Oplinger, Alcoa Inc.Aldo J. Pagliari, Snap-on Inc.Donald Parker, SAS Institute Inc.Kenneth S. Parks,

Wesco International Inc.James Perry,

Trinity Industries Inc.Ann Marie Petach, Senior

Managing Director,BlackRock Inc.

Christopher H. Peterson,Ralph Lauren Corp.

Thomas Piquemal, EDFKaran Rai, ADS Tactical Inc.Paul Reilly, Arrow ElectronicsLawrence Rutkowski,

Warnaco Group Inc.Scott Scheirman, Western

Union Co.Anna Sedgley, Dow Jones & Co.Thomas J. Seifert, Brightstar

Corp.Suresh C. Senapaty, Wipro Ltd.Francis J. Shammo, Verizon

Communications Inc.Bob Shanks, Ford Motor Co.J. Donald Sheets, Dow CorningTimothy Sloan, Wells Fargo &

Co.Graham Smith, Salesforce.com

Inc.G. Scott Spendlove, Tesoro

Corp.Sophie Stabile, Accor SAJohn Stephens, AT&T Inc.Christopher J. Swift, Hartford

Financial Services Group Inc.Dominique Thormann, RenaultKarin-Joyce Tjon, BeechcraftKenneth R. Trammell, TennecoTracey T. Travis, Estée Lauder

Cos.Scott B. Ullem, Bemis Co.Henk van Dalen,

VimpelCom Ltd.Lori A. Varlas,

Central Garden & Pet Co.Richard Veldran,

Dun & Bradstreet Corp.Michael Ventling, Ernst & YoungRobin L. Washington,

Gilead Sciences Inc.Randall Weisenburger,

Omnicom Group Inc.

Richard F. Westenberger,Carters Inc.

Patricia E. Yarrington, Chevron

PARTICIPATING GUESTSShelia C. Bair, Senior Adviser,

Pew Charitable Trusts;Chairman, Federal DepositInsurance Corp. (2006-2011)

Richard Bejtlich, Chief SecurityOfficer, Mandiant Corp.

Ian Bremmer, President,Eurasia Group

H. Rodgin Cohen, SeniorChairman, Sullivan &Cromwell LLP

David M. Cote, Chairmanand CEO, HoneywellInternational Inc.

Michael Daniel, Special Assis-tant to the President andU.S. Cybersecurity Coordina-tor, National Security Staff,The White House

Susan Dentzer, Senior PolicyAdviser, Robert Wood John-son Foundation

Joshua Gotbaum, Director,Pension Benefit GuarantyCorp.

Michael J. Graetz, Professor ofTax Law, Columbia LawSchool

Alan Greenspan, President,Greenspan Associates;Federal Reserve Chairman(1987-2006)

Alan B. Krueger, Chairman,White House Council ofEconomic Advisers

Sandy Levin, Ranking Member,House Ways and MeansCommittee, U.S. Representa-tive (D., Mich.)

Patrick S. McGurn, ExecutiveDirector and SpecialCounsel, InstitutionalShareholder Services Inc.

Nell Minow, Co-Founder andMember of the Board, GMIRatings

Tim Pawlenty, President andCEO, Financial ServicesRoundtable; Governor ofMinnesota (2003-11)

Daniel B. Poneman, DeputySecretary of Energy, U.S.Department of Energy

Dallas L. Salisbury, Presidentand CEO, Employee BenefitResearch Institute

Arne M. Sorenson, Presidentand CEO, MarriottInternational Inc.

Lynn E. Turner, ManagingDirector, LitiNomics

Deirdre White, President andCEO, CDC DevelopmentSolutions

Mary Jo White, Chairman,U.S. Securities and ExchangeCommission

Daniel H. Yergin,Vice Chairman, IHS Inc.

The Journal Report welcomesyour comments—by mail, fax oremail. Letters should be addressedto Lawrence Rout, The Wall StreetJournal, 4300 Route 1 North, SouthBrunswick, N.J. 08852. The faxnumber is 609-520-7256, and theemail address is [email protected].

For advertising informationplease contact Sarah Dale

at 212-597-5729 [email protected]

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REPRINTS AVAILABLE

CFO NETWORK MEMBERS

WHAT’S THE BEST WAY TO DEVELOP TALENT?

1 Engage EmployeesAppeal to employees’

heads, hearts and handsthrough community/global in-volvement/affinity groups.Create long-term developmentplans for top talent. Align fi-nance objectives with businessgoals.

2 Promote PersuasionCorporate-finance em-

ployees must be effectivecommunicators: written/oral,internal/external. They shouldlearn to speak across disci-

plines as well as across busi-ness functions.

3 Encourage PartnershipsAvoid siloism. Use cross-

functional assignments. Bewilling to seed other businessfunctions with finance talent.

4 Continuous LearningMake sure employees

master skills required in anevolving financial environ-ment. Employees must becontinuous learners in a dy-namic business setting.

CO-CHAIRS:Hugh F. Johnston, ExecutiveVice President and ChiefFinancial Officer, PepsiCo Inc.John Stephens, Senior Execu-tive Vice President and CFO,AT&T Inc.Robin L. Washington,Senior Vice President andChief Financial Officer, GileadSciences Inc.

SUBJECT EXPERT:Deirdre White, President andChief Executive Officer, CDCDevelopment Solutions

HOW TO BRING CORPORATE HEALTH COSTS UNDER CONTROL

1 Health PaymentDatabases

Corporate leaders should ad-vocate the creation of all-payer databases and aligntheir own payment systemswith reforms under way at thefederal level. Transparent pric-ing data will be a big step for-ward in driving efficiency.

2 Outcomes DatabasePush for a national

health-care and outcomes da-tabase, so that all care can betracked and studied to deter-mine effectiveness.

3 Improve Social FactorsAdvocate improvements

in the social and economicfactors that underpin health,including education, and envi-ronments that create healthybehaviors. Focus on corporatewellness, health-care literacyand actions people can takeright now to combat issueslike diabetes and heart dis-ease.

4 Focus on High-CostPatients

Focus the attention of thehealth-care delivery system,

payers and research efforts onthe roughly 20% of the popu-lation that incurs roughly80% of health-care costs.

CO-CHAIRS:Jeffrey W. Bolton, ChiefFinancial Officer, Mayo ClinicPaul Clancy, Executive VicePresident, Finance, and ChiefFinancial Officer, Biogen Idec

SUBJECT EXPERT:Susan Dentzer, Senior PolicyAdviser, Robert Wood JohnsonFoundation

PREPARING FOR THE TOP GLOBAL RISKS

1 Think RegionallyCompanies should align

strategies with governmentsof countries in which they op-erate and spend more timedeveloping regional (notglobal) growth plans.

2 CybersecurityCompanies should tackle

their own threats, push forgovernment intervention andseek pacts between govern-ments on the issue. Limit whohas access to information.

3 Manage Supply ChainThe supply chain should

be part of regular risk assess-ment and have redundancybuilt in. Also assess risks tobusiness processes to takeinto account fragility and vola-tility of regional economies.

4 Interrelated RisksRisks don’t necessarily

come as discrete events, socompanies must be preparedfor multiple events. Tackle is-sues across the senior teams.

CO-CHAIRS:Robyn M. Denholm, ChiefFinancial Officer, JuniperNetworks Inc.Bob Shanks, Executive VicePresident and Chief FinancialOfficer, Ford Motor Co.Tracey T. Travis, ExecutiveVice President and ChiefFinancial Officer, EstéeLauder Cos.

SUBJECT EXPERT:Ian Bremmer, President,Eurasia Group

MANAGING ENERGY COSTS, PROTECTING THE ENVIRONMENT

1 Chance of a LifetimeThe oil and gas renais-

sance in the U.S. is thechance of a lifetime for eco-nomic revitalization, growth,competitiveness and sustain-able job creation at all incomelevels. Government must de-velop a coherent energy policyaround this rare opportunity.

2 States Regulate FirstThe existing system of

state regulation of drillingshould be maintained ratherthan imposing a new layer offederal regulation. The bestregulation is tailored to thosemost affected.

3 Invest in InfrastructureDevelopment of gas and

oil pipeline (including Key-stone XL) and electric trans-mission should be supportedby private-sector investmentand facilitated by governmentdecision making. The goalshould be to bring logistics inline with new supply, supportenergy efficiency and themanufacturing renaissance,and integrate renewables.

4 Allow Imports and Ex-ports

To maximize economic bene-fits of our current oil and gasboom, the U.S. must permit

the free flow of energy ex-ports and imports.

CO-CHAIRS:Joe Kaeser, Chief FinancialOfficer, Siemens AGThomas Piquemal, GroupSenior Executive Vice Presi-dent, Finance, and Head ofNorth America, EDFPatricia E. Yarrington, VicePresident and Chief FinancialOfficer, Chevron Corp.

SUBJECT EXPERT:Daniel Yergin, Vice Chairman,IHS Inc.

TAX POLICIES FOR COMPANIES—AND ECONOMIC GROWTH

1 Lower Corporate RateCongress should repeal all

corporate tax preferences anduse the revenue to reduce thecorporate income tax rate to25% or lower to be globallycompetitive and create moreU.S. jobs.

2 Territorial Tax SystemCongress should enact a

territorial system to enablecompanies to deploy cashearned abroad in the U.S., andto encourage investment inthe U.S., along with provi-

sions to prevent erosion ofthe U.S. tax base.

3 Global PrinciplesCreate global principles

for transfer pricing for multi-nationals in an ever-changingenvironment to promote cer-tainty and long-range plan-ning.

4 DecouplingSeparate the discussions

of individual and corporate in-come-tax rates, policies andgoals.

CO-CHAIRS:Judy L. Brown, ExecutiveVice President and ChiefFinancial Officer, Perrigo Co.Nicholas C. Fanandakis,Executive Vice President andChief Financial Officer,DuPont Co.

SUBJECT EXPERT:Michael J. Graetz, Professorof Tax Law, Columbia LawSchool

© 2013 Dow Jones & Company, Inc. All rights reserved. 3C574

THANK YOU

The Wall Street Journal would like to thankthe 2013 sponsors for their generous supportof the CFO Network annual meeting.

For more information about the CFO Network,please visit our website at cfonetwork.wsj.com.



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THEWALL STREET JOURNAL. Monday, June 24, 2013 | R3

Race ahead. RelentlesslyThe markets, competition, and business race forward at a relentless pace. As CFO, you must too.Turn to Deloitte. We offer highly specialized and informed insights, thoughtware, and resources to

fuel every phase of your career, help you maneuver past every obstacle, and stay in high gear.

Tour our CFO Program at www.deloitte.com/us/thecfoprogram

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/aboutfor a detailed description of the legal structure of Deloitte LLP and its subsidiaries.Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2013 Deloitte Development LLC. All rights reserved.36 USC 220506Member of Deloitte Touche Tohmatsu Limited



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FIVE YEARS HAVE passed sincethe financial upheavals of 2008.How well are the nation’s banksprepared for another disaster?

To see how new regulationsand practices are playing out,The Wall Street Journal’sRebecca Blumenstein spoke withSheila C. Bair, senior adviser,Pew Charitable Trusts, and for-mer chairman of the Federal De-posit Insurance Corp.; H. RodginCohen, senior chairman, Sullivan& Cromwell LLP; and TimPawlenty, president and chief ex-ecutive, Financial ServicesRoundtable, and former gover-nor of Minnesota.

What follows are edited ex-cerpts of their conversation.

How Many Rules?MS. BLUMENSTEIN: Do you thinkenough has been done to preventa banking cataclysm from hap-pening again?MS. BAIR: No, I don’t think so. Ithink there are a number of out-standing rule makings that ha-ven’t been finished yet. At thetop of my list would be the pro-posed rules to strengthen capitalrequirements. Excessive leveragewas the key driver of this crisis.Excessive leverage is almost al-ways a key driver of any finan-cial crisis we’ve ever had, andthe rules themselves allowed alot of leverage. And the FDIC ac-tually was fighting a lonely bat-

tle against rules that would haveallowed commercial banks thatwe’d insured to take on evenmore leverage. So, those rulesneed to be fixed.

MS. BLUMENSTEIN: Gov. Pawlenty,I hear from banks often thatthey feel they’ve been overregu-lated, especially compared withhedge funds and other players inthe economy.MR. PAWLENTY: We’re not callingfor the repeal of Dodd-Frank, butwe do want it to be implementedin a way that’s practical, usableand doesn’t go so far that it suf-focates capital formation and de-

ployment and the things wewant to have in an economy.

For example, simple thingslike harmonization between reg-ulatory agencies. There was a re-cent rule promulgated by theConsumer Protection Bureau,which said, “There’s a thingcalled qualified mortgages, andif you meet these generally ob-jective criteria, then you’ll havelegal safe harbor from lawsuitsregarding suitability to repay.”

However, even if you makequalified mortgages, the Depart-ment of Justice might say, “Well,it’s interesting that you met thequalified-mortgage definition for

the CFPB, but we’re interested inwhether those otherwise quali-fied mortgages might have a dis-parate impact on certain pro-tected groups and classes ofindividuals, and we might sueyou for discrimination.”

What’s the Holdup?MS. BLUMENSTEIN: Let’s talkabout Dodd-Frank. Only 40% ofit has actually been imple-mented. Why is that?MS. BAIR: Industry lobbying ispart of the problem. I’ve beenaround long enough to remem-ber when industry leaders usedto work more collaborativelywith regulators. We’re not see-ing that kind of constructive dia-logue at this point. Regulatorsthemselves bear some account-ability. They have been some-what slow, they’ve succumbed toindustry lobbying. The rules aretoo complex when they comeout. A lot of it is because peopleare looking for exceptions, ex-emptions and nuances.

MS. BLUMENSTEIN: Are the bankspushing back too much here?MR. PAWLENTY: We want cer-tainty. What markets don’t likeis uncertainty and instability. Ifyou’re going to deploy largeamounts of capital, you’d like toknow what the rules of the roadare. We embrace the notion thatDodd-Frank was needed and im-portant. We embrace the notionthat the rules should get donequicker, faster and better, butthese are also big issues with big

consequences, and it’s wise tomeasure twice and cut once.MR. COHEN: I would agree withSheila that there is a lack of dia-logue between the industry andthe government authorities. Theother problem, in fairness, isthat Dodd-Frank is obviously amassive piece of legislation, verycomplicated, often ill-drafted,and we are asking regulatoryagencies to do this without anyadditional resources.

MS. BLUMENSTEIN: Let’s talkabout “too big to fail,” that now-infamous phrase. Obviously, thecollapse of Lehman played a piv-otal role. If something were tohappen with J.P. Morgan and itwere to fall into some sort ofspiral, could we avoid govern-ment intervention this timearound? Have we insertedenough safeguards with theclearinghouses that a bank asbig as that could fall into crisiswithout being rescued?MS. BAIR: There would need tobe government intervention inthe form of Title II of Dodd-Frank, which is basically a gov-ernment-controlled bankruptcyprocess. Certainly, in terms oftaxpayer exposure, there’s a veryexplicit ban on taxpayer bailouts.And I do think that the FDIC hasannounced a viable strategy,what’s called single point of en-try, which is basically takingcontrol of the holding company.MR. COHEN: One of the problemsin 2008 was there was no “breakglass here in case of fire” situa-

tion. There were no plans. Nowthere are plans, and there is asystem in place. The potentialfor resolving even a J.P. MorganChase is infinitely higher than itwas almost five years ago.

Where’s the Money?MS. BLUMENSTEIN: One of thepersistent complaints aboutbanks is that there’s not enoughlending. Banks themselves com-plain about how they are nowvery regulated, and their friendsat hedge funds essentially aren’t.MR. PAWLENTY: I think the accu-sation that lending isn’t acceler-ating isn’t supported by the cur-rent data. And banks and otherlenders are put in the position ofgetting pressured by regulatorsand overseers to make responsi-ble loans and do rigorous andappropriate underwriting, on theone hand. And on the otherhand, you have people in the po-litical arena saying, “Hey, makemore loans.” Well, one way tomake more loans is to loosenyour underwriting standards,which we have to be very carefulabout and don’t want to do be-cause then it leads back towardthe path of too much leverageand too much speculation.

What’s Fixed—and Not—With BankingSheila Bair, H. Rodgin Cohen and Tim Pawlenty on regulation and the vulnerability of the financial system

MARY JO WHITE is a formerfederal prosecutor who earlierthis year became chairman ofthe Securities and ExchangeCommission, the nation’s top se-curities watchdog.

She sat down with The WallStreet Journal’s Francesco Guer-rera to discuss her first fewmonths on the job and where theagency’s focus will be during hertenure, including a plan to seek

admissions of wrongdoing incertain cases. Here are edited ex-cerpts of the conversation.

MR. GUERRERA: You had a repu-tation as a tough cop in yourprevious roles. How will you in-terpret the role at the SEC in theenforcement area? More fines?More industry bans?MS. WHITE: The SEC is a law-en-forcement agency. You have to

be tough. You have to try tosend as strong a message as youcan, across as broad a swath ofthe market as you regulate, andthat’s pretty broad. It’s a spaceI’m familiar with, but I think theSEC has been doing quite a goodjob in that arena. The financial-crisis cases aren’t all finished,but I think they’ve establishedquite a good record on those,and so we’ll have some re-sources freed up by virtue of thechange in the workload.

MR. GUERRERA: Where else willwe see some action?MS. WHITE: You’re always goingto see a lot of insider-tradingcases being done, a lot of FCPA[Foreign Corrupt Practices Act].That will continue. We bringcases against investment advis-ers. Recently you’ve seen casesbrought against the SROs [self-regulatory organizations], andthose are important to do. Ithink financial-statement fraud,accounting fraud has alwaysbeen important to the SEC. It’scertainly an area that I’m inter-ested in, and you’re going to seemore targeted resources in thatarea going forward.

Admissions of FaultMR. GUERRERA: The SEC andother regulators have been criti-cized by judges for this overreli-ance on the “neither admit nordeny” phrasing, and so not ex-acting admissions from peopleaccused of particular misdeeds.Anything happening there?MS. WHITE: The SEC is a civillaw-enforcement agency, and Ithink the SEC has made very,very good use of the “no admit,no deny” sort of settlementmodel. You can settle quicker.You have no litigation risk interms of investors. You getmoney out quicker. So that’s al-ways going to be a major tool inthe arsenal. I have reviewed thepolicy and the practice, and weare going to in certain cases beseeking admissions going for-ward. Public accountability inparticular kinds of cases can be

quite important, and if you don’tget them, you litigate them.What kinds of cases are those?To some degree it turns on howmuch harm has been done to in-vestors, how egregious the fraudis. But again, I emphasize howimportant the “no admit, nodeny” protocol also will remainfor the majority of cases.

MR. GUERRERA: How will youdeal with issues other than en-forcement—things like marketstructure, the policing of investorrights and everything else?MS. WHITE: Part of what must beon the agenda are the congres-sionally mandated rule makings,both under Dodd-Frank and theJOBS Act [which allows smallerfirms to take advantage of looserIPO rules], so I’m extremely fo-cused on those. But one set of is-sues that clearly got my atten-tion before I arrived is market-structure issues.

Essentially, we have a marketthat changes every day. We’veobviously had what I would callsystems kinds of issues that arevery important to deal with. TheSEC has dealt with many ofthose quite effectively. But interms of high-frequency traders,the dark pools, the fragmenta-tion of the market structure—you know that there’s some ad-vantage in speed, but what’s theimpact? What’s the harm, if any,of some of the features of themarket structure? We need tobring a sense of urgency to theseissues.

MR. GUERRERA: The high-fre-quency-trading industry says itdoesn’t cause harm and that itactually facilitates liquidity, etc.Is that a fertile area to go after?MS. WHITE: The point is we needto get our arms around and fullyunderstand all the market-struc-ture issues and the impact of

them. Experts don’t agree onwhether there’s harm or not.You don’t want to regulate be-fore you know what, if anything,is having a harmful impact.

More Adviser ScrutinyMR. GUERRERA: What keeps youawake at night? Is it the enforce-ment issue, another flash crash,another Madoff?MS. WHITE: One thing that keepsme up at night is that we essen-tially examine investment advis-ers, some 10,000 of them, andwe really don’t have the re-sources to sufficiently coverthat. One of our current budgetrequests would add 250 examin-ers. In fiscal 2012, although weexamined 20% of the assets un-der management, we only exam-ined 8% of those investment ad-visers. We really need muchbroader coverage because this isthe group that deals with,among others, retail investors.

Where the SECAction Will BeMary Jo White on what changes she expects at theSecurities and Exchange Commission


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VOICES FROM THE CONFERENCE

“I would describe both theUnited States and, indeed,the rest of the world asbeing in a sluggish environ-ment where effective de-mand is inadequate to re-ally galvanize the systeminto growth. But there’snot enough downsideweakness to create anysignificant short-termchanges that I can see.”

ALAN GREENSPANPresident, GreenspanAssociates; FederalReserve Chairman,1987-2006

* Statistics are through May 1, 2013.

Source: Securities and Exchange Commission

On the BeatNumber of Securities and Exchange Commissionenforcement actions by fiscal year

Making Them PayFinancial penalties imposed and disgorgement ofillegal profits ordered in SEC proceedings (in billions)

After the FloodSEC enforcement actions addressingmisconduct related to the financial crisis*

Trouble SpotsThe 10 most common types of investorcomplaints the SEC resolved in fiscal 2012

STREET PATROL | Checking in on the SEC

Number of entities and individuals charged . . . . 157

Number of CEOs, CFOs and other seniorcorporate officers charged . . . . . . . . . . . . . . . . . . . . . . 66

Number of individuals who have received officerand director bars, industry bars or commissionsuspensions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Penalties ordered or agreed to . . . . . . > $1.53 billion

Disgorgement and prejudgment interestordered or agreed to . . . . . . . . . . . . . . . . > $756 million

Additional monetary relief obtained forharmed investors . . . . . . . . . . . . . . . . . . . . $400 million

Total penalties, disgorgement and othermonetary relief. . . . . . . . . . . . . . . . . . . . . . . . $2.68 billion

Complaint type Number

Ponzi/pyramid scheme . . . . . . . . . . . . . . . . . . . . . . . 4,083

Advance-fee fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,122

Manipulation of securities/prices. . . . . . . . . . . . . 1,083

Trade execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749

Account administration and processing(maintenance, including account closing andredemption issues). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683

Account administration and processing (mattersrelating to daily account activity) . . . . . . . . . . . . . . 663

Specific market events (comments andcomplaints) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618

General allegations of fraud (issuer) . . . . . . . . . . . 451

Delivery of funds/proceeds. . . . . . . . . . . . . . . . . . . . . 439

Transfer of account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426

0

100

200

300

400

500

600

700

800

2003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’122003 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’120

0.5

1.0

1.5

2.0

2.5

3.0

$3.5

VOICES FROM THE CONFERENCE

“One model that we talk a lot about is, should we thinkmore about the federal government’s role in cyberspaceas one of disaster management? In the physical worldone of the things that the government does is run theNational Weather Service. We collect information fromradars and buoys and weather stations all over the coun-try to generate a weather map so that citizens and com-panies can know if a really bad storm is coming. So, oneof the roles that you can foresee for government andcyberspace is to provide that kind of service in cyber-space to provide indications and warning of what is hap-pening out in cyberspace. And then to extend that modela little bit further, if you actually have an event that be-gins to overwhelm local capacity, that’s when the federalgovernment would step in.”

MICHAEL DANIELSpecial Assistant to thePresident and U.S.Cybersecurity Coordinator,National Security Staff,The White House

‘In 2008 was there was no “break glass here in case of fire” situation.’ —H. RODGIN COHEN

Sheila Bair, H. Rodgin Cohen and Tim Pawlenty

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*Through May 31

Source: Federal Deposit Insurance Corp.

The Wall Street Journal

Year FailuresAssets

(billions)

2001 4 $1.8

2002 11 $2.9

2003 3 $0.9

2004 4 $0.2

2005 0 $0.0

2006 0 $0.0

2007 3 $2.6

2008 25 $371.9

2009 140 $169.7

2010 157 $92.1

2011 92 $34.9

2012 51 $11.6

2013* 14 $1.4

Going DownBank failures in the U.S.by year

‘You have to try to send as strong a message as you can.’—MARY JO WHITE



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THEWALL STREET JOURNAL. Monday, June 24, 2013 | R5

ALAN B. KRUEGER, the chair-man of President BarackObama’s Council of EconomicAdvisers, says the U.S. economyis healing—but would heal fasterif not for the across-the-boardspending cuts of the sequester.Mr. Krueger, who returns to histeaching post at Princeton Uni-versity this summer, talked withThe Wall Street Journal’s DavidWessel. Edited excerpts of theirdiscussion follow.

Widening GapsMR. WESSEL: You have said thata smaller gap between the wagesat the top and at the bottomwould be good for business be-cause it would raise morale andproductivity, and that the U.S.economy would probably growbetter, faster.MR. KRUEGER: We’ve reached thepoint in our society where in-equality is harmful for our econ-omy. Over the last 30 years, thevast majority of income growthhas gone to the top 1%.

This growing gap, betweenthe middle and the bottom andthe top, is creating an opportu-nities gap. Talented childrenwho happen to be born in disad-vantaged families don’t have thesame advantages that your chil-dren or my children have. Andthat’s not good for the economy.

If it’s a matter of businesspractices, where are your cus-tomers going to come from? Itthreatens our economic stabilityif families are in a positionwhere they borrow to keep uptheir consumption.

Then there are issues aboutmorale and productivity. There’sa lot of evidence that workerswho feel that they’re treatedfairly perform better at work. Toa considerable extent, it’s up tothe private sector. It’s up toshareholders to recognize it’s intheir interest to treat theirworkers, in many cases, better.

MR. WESSEL: Is there any reasonto believe the pace of the econ-omy is going to quicken?

MR. KRUEGER: Unless we can re-place the sequester with smarterpolicy, this year is going to looka lot like last year in terms ofjob growth and GDP growth.

MR. WESSEL: And 2014?MR. KRUEGER: If the sequesterremains in place, there’ll besome residual effect. But itwon’t be as severe a headwindnext year. So I think you’ll seegrowth closer to 3% next year. Ithink the growth rate wouldhave been close to 3% this yearwithout the sequester.

MR. WESSEL: What is the rightway to think about the deficit?MR. KRUEGER: My biggest fear iswe’re eating our seed corn, thatthe sequester is cutting into keyinvestments in research and de-velopment. If you look at what’spowering the U.S. economy now,it’s partly because of advances infracking and horizontal drilling.The Energy Department fundedthe research for horizontal drill-ing in the 1970s. This kind oflong-term research and invest-ment, you never know what’s go-ing to bear fruit.

MR. WESSEL: I hear concernsthat the Affordable Care Act is

retarding the pace of job growth.Isn’t there something to thatfear?MR. KRUEGER: The AffordableCare Act is a very complex law.It’s going to have a number ofdifferent effects. From looking atthe data, and I’ve looked quitehard, I see no sign that there’sbeen an adverse effect in the jobmarket. If you look at what’shappened to job growth in in-dustries with the lowest health-insurance coverage, they’ve ac-tually grown more quickly thanin industries with higher health-insurance coverage who aren’tgoing to be affected by the ACA.

European ExportsMR. WESSEL: How big a risk tous is the political gridlock andprolonged stagnation in Europe?MR. KRUEGER: We’re exportingless to Europe. It’s our biggesttrading partner. A bigger risk,although hopefully much lowerprobability, is through the finan-cial channel. And that’s impossi-ble to put odds on. The Europe-ans are aware of the problemsthat they face. Dealing with allof the parliaments that theyhave to deal with is not easy.They’ve made progress. They’vegot still quite some ways to go.

The Economic ViewAlan Krueger on what’s holding back growth

WHAT KIND OF retirement plansshould companies offer? Howcan they make sure their em-ployees are well provided foronce they stop working? Thesequestions have taken on new ur-gency as the baby-boom genera-tion exits the workforce andpeople lead longer lives.

To sort through the options,The Wall Street Journal’s Gabri-ella Stern spoke with JoshuaGotbaum, director of PensionBenefit Guaranty Corp., and Dal-las Salisbury, president and chiefexecutive of the Employee Bene-fit Research Institute. What fol-lows are edited excerpts of theirdiscussion.

The Big WorriesMS. STERN: What keeps you upat night when you think aboutall the fraught issues surround-ing the U.S. pension situation?MR. GOTBAUM: What worries meis that we are seeing what oughtto be thought of as greatchanges—people are living lon-ger, they’re living healthier lives,opportunities and possibilitiesare getting better. Yet the insti-tutions to help people throughretirement aren’t getting better.

A generation ago, about halfof workers had some form of re-tirement plan, and most of themwere traditional plans that basi-cally provided them lifetime in-come. Today, still, only abouthalf of people who work haveany kind of employer-providedplan. But the vast majority noware defined-contribution plans

that force people to figure outhow much to save, how to in-vest, and they’re not doing avery good job of it. The thingthat worries me is that the baby-boom generation will discoverwhen they retire that they areless capable of retiring thantheir parents.

MS. STERN: So whose fault is it?Who do you say should get withthe program and fix things?MR. GOTBAUM: I don’t think it’svery useful to blame people andinstitutions for where we are.Every institution can play a rolein getting people to save more.

Employers are infinitely bet-ter than individuals at negotiat-ing the terms of plans, figuringout who ought to do investment,etc. Any plan is likelier to resultin more retirement savings thana person doing it themselves.One thing we can do is say toemployers: Help. It doesn’t nec-essarily mean put in more ofyour money. You can help peopledivert more of their own.

For individuals, the fact of thematter is, they are living longer.They’re going to need to recog-nize that fact. Some people al-ready are, by deferring retire-ment. But it also means they’regoing to have to save more.

For government, the issue is,how do we help institutionswork more smoothly? We havemade it harder for businesses tooffer retirement plans to theiremployees by adding regulatoryrequirements on those who offer

traditional pension plans. WhatI would say to businesses, toCFOs, is there are things you cando that don’t cost you that none-theless benefit employees. One ischange the default so that if anemployee does nothing, they’reautomatically enrolled.

The Health-Care IssueMR. SALISBURY: I think Josh andI read the history statistics a lit-tle bit differently. Median jobtenure for the American laborforce in 1952 was less than fouryears. Last year, it was less thanfour years. In 1952, median jobtenure for workers 55 to 64 wasless than 10 years. In 2011, it wasless than 10 years. The dynamicsof job turnover for most of theeconomy have always been rela-tively rapid. The old design ofdefined-benefit plans, which dovery well for 30-year workerslike my dad, frankly always leftout over 80% of the American la-bor force.

Our research and data makeme far more optimistic thanJosh is that employers havestepped up to the challenge.They are, across the system,contributing to defined-contri-bution plans. They’re using auto-matic enrollment at growingrates each and every year.

The real issue is health care.The long-term-care private-in-surance market is essentiallycollapsing. All of the major car-riers that built long-term-carepractices over the past 20 yearsare exiting the marketplace.

Living LongBut Not ProsperingJoshua Gotbaum and Dallas Salisbury on thefinancial shortfall facing many retirees


‘There are things you can do that don’t cost you that nonetheless benefit your employees.’—JOSHUA GOTBAUM

Joshua Gotbaum (left) and Dallas Salisbury

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Note: Social Security includes survivor and disability payments.

Source: Employee Benefit Research Institute estimates from Census Bureau data

Source: Mercer and the Australian Center for Financial Studies, “Melbourne Mercer Global Pension Index,” 2012 The Wall Street Journal

Source: EmployeeBenefit Research Instituteand Mathew Greenwald &Associates Inc., RetirementConfidence Surveys

Problems in the Private Sector…Median assets and obligations of the 257 largestdefined-benefit pension plans among U.S.-basedcompanies (dollars in billions)

Growing ImportancePensions, along with earnings from work, have becomemore significant for people of retirement age. Sources ofincome for individuals age 65 and over:

Rising DoubtsHow confident surveyed workers saidthey were that they (and their spouse)would have enough money to live com-fortably through their retirement years

And in the PublicStatus of state and local defined-benefit pensionplans (dollars in trillions)

FALLING SHORT | A challenging retirement outlook

Middling Report CardThe Melbourne Mercer Global Pension Index scores selected nations’ retirement systems (public and pri-vate) based on their adequacy, sustainability and integrity. The U.S. ranked ninth of 18 countries in 2012.

Interpreting the ScoresAbove 80 . . . A first-class and robust system.65-80 . . . . . . A system with a sound structure and

many good features but some areas forimprovement.

50-65 . . . . . . A system with some good features butalso major risks or shortcomings.

35-50 . . . . . . A system with some desirable featuresbut also major weaknesses or omissions.

Assets Obligations Funded ratioFunded ratio

83.3%

82.3%

93.3%

100.4%

80.4%

80.5%

84.3%

76.1%

74.8%

87.4%

86.0%

85.8%

87.1%

83.8%

79.0%

76.4%

74.9%

73.1%

Assets Obligations

2004

2005

2006

2007

2008

2009

2010

2011

2012

$1.81$2.17

$1.96$2.38

$2.23$2.39

$2.33$2.32

$1.79$2.23

$2.09$2.60

$2.35$2.79

$2.41$3.17

$2.67$3.57

2004$2.17

$2.48

2005$2.25

$2.61

2006$2.37

$2.76

2007$2.59

$2.98

2008$2.62

$3.13

2009$2.60

$3.29

2010 $2.62$3.43

2011$2.69

$3.59

2012 $2.75$3.76

Source: Bloomberg data via Erin Lyons, Citi Research

Note: Based on a sample that covers about 90% of assets instate-administered plans and 30% of assets in local plans.

Source: Public Plans Database via the Center for Retirement Researchat Boston College (2001-11); figures for 2012 are CRR estimates

42%

14%

18.2%

21.3%

4.5%

39.5%

19.7%

11.8%

26.9%

2.1%

Social Security

Pensionsand annuities

Incomefrom assets

Earningsfrom work

Other

19741995

2013

2010

21%

51%

19%

8%

13%

38%21%

28%

Very

Somewhat

Not too

Not at all

Denmark 82.9

Netherlands 78.9

Australia 75.7

Sweden 73.4

Switzerland 73.3

Canada 69.2

U.K. 64.8

Chile 63.3

U.S. 59.0

Poland 58.2

Brazil 56.7

Germany 55.3

Singapore 54.8

France 54.7

China 45.4

South Korea 44.7

Japan 44.4

India 42.4

‘My biggest fear is that the sequester is cutting intokey investments in R&D.’ —ALAN KRUEGER

ThoughT Leaders &ConversaTions ThaT

engageJOIN THE VIDEO CONVERSATION TODAY AT 3 PM EDT

©2013 Dow Jones & Company, Inc. All rights reserved. 3DJ2135

Video Guests include:

Join the conversation today, visit WsJ.com/leadershipReport

What should companies do With allthe cash they aRe sittinG on?

charles mulfordInvesco Chair and Professorof Accounting at Georgia Tech

anthony J. carfangPartnerTreasury Strategies, Inc.

Bruce nolopFormer CFOE*Trade


P2JW175000-0-R00500-103EF05070F CL,DM,EE,EU,FL,KC,MW,NE,NY,PH,SA,SWBG,BM,BP,CH,CK,CP,CT,DR,HL,KS,LG,LK,MI,ML,NM,PI,TD,WO

P2JW175000-0-R00500-103EF05070F

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WHAT ROLE DO activist share-holders play in challenging howcorporations are run?

The Wall Street Journal’sDennis K. Berman discussed thiswith Patrick S. McGurn, an exec-utive director and special coun-sel at Institutional ShareholderServices, a provider of proxyvoting services and corporate-governance research; Nell Mi-now, co-owner and member ofthe board of GMI Ratings (for-merly Corporate Library), an in-dependent research firm evalu-ating governance risk; and LynnE. Turner, former chief accoun-tant of the Securities and Ex-change Commission. Here areedited excerpts of their conver-sation.

MR. BERMAN: Marty Lipton, thedean of American corporate law-yers, recently wrote, “No com-pany is too big for shareholderattack, even those with a sterlingperformance record.” Would youagree?MS. MINOW: It just flabbergastsme when people who are alwaysrhapsodizing about the perfec-tion and beauty of the free mar-

ket don’t seem to like it when itworks.MR. MCGURN: This year we cer-tainly saw activism at Apple, aproxy fight at Hess. The bottomline is communication. Share-holders had a point of viewabout valuation, about strategy,at those firms. They were notgetting a receptive audiencefrom the board of directors, sothey decided to go public withtheir complaints.

As a result, we’ve actuallyseen movement and change atsome of those companies basedupon the fact that the engage-ment that should be taking placewasn’t taking place in advance ofwhatever that confrontationwas.

So many situations are settledwithout ever going public, with-out an activist hedge fund, or apublic fund, offering a proposal.It’s simply a case where thecommunications take place, theboard listens, they considerwhat they heard. It doesn’t meanthey’ll always follow that advice,but at least they’re giving an au-dience to those investors whohave a different perspective.

MR. BERMAN: Is a company a de-mocracy today, given the rise ofshareholders in the boardroomoverall?MS. MINOW: Running the com-pany is not a democracy, butelecting directors has some ele-ments of a democracy. And it is,again, flabbergasting to mewhen directors fail to get major-ity support of the shareholders,so they, in a scene that wouldhave to be enacted by the MarxBrothers, submit their resigna-tions to themselves, and thenturn them down.

MR. BERMAN: What did we learnfrom this year’s proxy season?MR. MCGURN: A good marketcures all ills, from a shareholderperspective, quite often. We sawrecord high support this year.

MR. BERMAN: Getting good direc-tors—that does seem to be a realproblem, particularly as it re-lates to people with financial ex-perience.MR. MCGURN: I think we’re goingto see more demand for CFOsand former CFOs on boards. Ilove when CEOs say, “I worked

in finance 20 years ago.” Well,judgment ages like wine: It getsbetter with time. Knowledgeages like milk: It can go sourpretty quickly.

MR. BERMAN: Nell, you’ve donesome research that suggestswhen a company might come un-der activist attention.MS. MINOW: Yes. There’s been adramatic rise, particularly in thebiggest companies, of what wecall drone, or index, companies,in which no shareholder owns

more than the proportion thatthey would own in an index.While some [of these compa-nies] perform very well, as awhole most underperform theirpeer group, underperform themarket, have longer CEO tenure,are more likely to have excessivecompensation.

So we are looking at that as arisk factor.

MR. BERMAN: How can a CFO bea hero or a goat?MR. TURNER: If you’re a CFO and

you can’t name who your top 10institutional investors are,you’ve got a problem. You’ve gotto have communication withthem, so you can tell themwhat’s going on. When you runinto these rough spots, usuallythey’re willing to give you timeto work through it, because theyunderstand, they trust you more.But if the first time they everhear from you is when you’ve hita rough spot, you’re probablygoing to have a tough, toughtime with them.

The EmpoweredShareholderPatrick S. McGurn, Nell Minow and Lynn E. Turneron how critics want to be heard


‘The bottom line is communication.’ —PATRICK S. MCGURNLynn E. Turner (left), Nell Minow and Patrick McGurn

Note: Figures for 2013 reflect proxy filings from 210 of the Fortune 250 companies and annual meetings for 191 companies.

Source: James R. Copland and Margaret O’Keefe, Proxy Monitor The Wall Street Journal

Note: Drop in 2011 largely reflects end of frequent “say on pay”proposals due to Dodd-Frank Act’s mandate that public companies holdadvisory votes on executive compensation.

Shareholder ProposalsNumber submitted per company by year

Who They’re FromSponsorship of shareholder proposals, 2006-13

Tracking the OutcomesPercentage of shareholder proposals receivingmajority support by year

Percentage support for selected types ofshareholder proposals, 2013

What They’re AboutShareholder proposals by type, 2006-13

Proposals by IndustryShareholder proposals per company receivedannually, 2006-13

THE OWNERS’ VOICES | Shareholder activity at Fortune 250 companies

2006 ’07 ’08 ’09 ’10 ’11 ’12 ’13

2006 ’07 ’08 ’09 ’10 ’11 ’12 ’13

Labor-affiliatedinvestors

33%

Corporategadflies

26%

Religious-affiliated,

social investing,public policy

25%

Otherindividuals

15%

Otherinstitutional

investors1%

Corporategovernance

Socialpolicy

Executivecompensation

0

0.25

0.50

0.75

1.00

1.25

1.50

1.75Telecommunications 1.89

Energy 1.75

Manufacturing 1.69

Finance 1.69

Retail 1.58

Technology 1.33

Health care 1.32

Consumer products 1.26

Other 0.85

39%

37%

24%

0

2

4

6

8

10

12

14

16

18% Board declassification 68%

Voting rules 52%

Special meetings/written consent 37%

Proxy access 36%

Separate chairman/CEO 28%

Equity compensation rules 24%

Political spending/lobbying 18%

Other executive compensation 28%

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