Transcript
Heyo. Oh, live from the Vanguard voter in action, media closet, its ESG Industries, only weakly woke data podcast featuring me I'm just analysts Hall today by myself. Damian is busy, I think in a forest somewhere. Jesse's trying to make us some money Ari. I think is hiding under a rock because she has a new baby. In today's snowflake ecos. And called August 30th. 2023 ESG voting sucks, history repeats itself and you're unqualified, not me. That's right, you're the one who's on qualified. Our show today is being sponsored by S gauge. Your ESG Data Solutions provider. And Paul will actually be stopping by a little bit later to talk about annual meetings. I think he's talking about annual meetings. Everybody needs to know how meetings work, so, Paul's going to talk about that. But first Let's just make this a quick show. I got a little bit to say at the end, Tariq fancy really pissed me off this week, but let's talk about some stuff. So let's do this thing. First up. Here's the story. Vanguard joins BlackRock and rejecting more ESG proposals from shareholders. Look, this is the second story. BlackRock story came out last week that their shareholder proposal support for environmental and social proposals. Plummeted. It it dropped enormously and now they're citing. That vanguards. Similarly did But I did a little bit of actual Research into the numbers here. Vanguard reported 359 shareholder proposals. So first of all, just shareholder proposals not management, proposal management. Proposals are over 27,000, it's almost all director votes and occasionally, it's not, but it's almost, it's almost 100% director vote. This is just proposals that shareholders put up the themselves, Dealing with just environmental or social issues like, you know, doing a racial Equity audit at your company setting a net zero Target, all those kinds of things. There are 359, proposals that were ens and they voted for just 2% of them. That's seven. Seven actual proposals. They said had Merit now, it sounds like a horrible number and it is a horrible. Number seven. Out of 359. It's not great. However. I looked at using proxy monitor data, which covers the fortune 2550 200, the largest 250 companies, Of the fortune, 250, 250 of the 3509 proposals. Where were at these companies? So 70%, 70 percent of ens proposals are filed at the largest 250 companies in the US and this is only us companies. This does not apply to any other company. The NS proposals, are they have different votes and the anti-walk narrative is only about us companies anyway, for at least for the moment. Of those 250 proposals that we have data on, right, which is 70% of them. Fully 51 were filed by anti-woke companies, the national public policy Research Center, the there's a foundation Stephen Molloy who's a anti-abortion activists uses his foundation and then he files individually. Fully 51 were anti-woke. So now we're talking about 20% of the proposals at the largest 250 companies in the United States in 2023 were filed by Antelope activists. My point here is this is pure anti-walk dilution. Now you can do the math and you find that Vanguard still had a pitiful. You know, four votes for only like three to four percent of the non anti-woke environmental and social governance proposals, but lumped in, there are 51 Antioch proposals. It looks like there's a lot more in fact, when you pull them out and you look at last year last year in 2022, Vanguard reported 323 proposals that they voted on and they had a 9% for rate. That's 27 votes. So seven to 27, that's a pretty big drop but let's be honest, 27, four votes, they could only find 27 things that mattered out of 323 and 2022. And we're celebrating that like they're getting less woke or something. Of those. There were 216 At The Fortune. 250. So we're still talking about. The vast majority, are the 250 largest companies and 29 of those were anti-walk proposals. So we've doubled the number of anti-wolf proposals from roughly 13% of all proposals to just over 20%. So what do we actually talking about here? There's a massive plummeting, but most of the votes against are actually now, just anti-wolf proposals which get an average vote for of 3%, that's the average. The median vote is like less as like 1.2% So really what we're talking about is a massive dilution of the data that look, I'm not gonna lie Vanguard and BlackRock were frauds to begin with. They never really were woke like no one ever thought they were. We made fun of them for years. They never really vote for anything except for a management proposal. They almost uniformly, vote against shareholder proposals and it Ebbs in that flows with whatever the political whims are of whoever's running it, or whatever. They're feeling that year, In 2020 Vanguard voted four, seven percent of the 264 votes. So really what they've done is vote for like three percent about 9% and 7%. And we're talking like a, oh my God. They've they've shifted everything they've done. Are you kidding me? Kidding. They haven't shifted everything. They've done. We've diluted the number of votes with antiques proposals and they basically vote the same exact way, which is for nothing. They vote for basically nothing. Before honest over the course of history. So that narrative just should die. I mean, we know that they don't vote woke. Or anti-woke, they vote with management. And this isn't like a we don't need headlines out of the New York Post talking about rejecting more ESG proposals from shareholders than ever before it falls. They never really voted for them in the first place. So congratulations for having no data. Speaking of no data and the anti-woke. Antiques snowflake ecosystem actually is expanding. Now you can buy if you were afraid you couldn't before mortgages from the anti-woke. This is a headline. I saw ditch the woke Banks, revolutionizing mortgage lending for the American homeowner DTW bitch. The woke Banks is an extension of a group called Kinfolk mortgages out of Arizona. Now normally I wouldn't care about any of this except that their message is about how woke banks are pressing your ideology on you and yada yada the same sort of messaging. And then I noticed I wanted to know, like, okay well how are they giving out? Mortgages? Are they different from the woke banks that we all suddenly hate like JP Morgan because you know, everybody's thinking like the ultimate capitalists in the universe who is Jamie? Dimon is woke now like like we're all confused that the kneeler in Chief is now fully woke. We call them the newer and chief after George Floyd as a joke because he went to a buffalo branch and kneeled like Colin Kaepernick for a nano second. Like it was a joke. Apparently the Antioch didn't get the joke but they are now saying that they're pressing their ideology on you and this is who they partnered with a Kinfolk Morgan's out of ours. Arizona. They partnered with A group called United Wholesale Mortgage which turns out is a massive publicly traded mortgage. Broker led by Matt ishbia, who is the new owner? Of the Phoenix Suns, the NBA team, the basketball team, the Phoenix Suns. So I wanted to know what makes them not woke. So that Kinfolk could say they are not woke and their fighting against woke Banks well what makes them not woke. Actually is true. It's not woke because the company is controlled. According to freefloat, analytics.com data, another sponsor of the show. It's controlled by Three Brothers, Matt, Jeff and Justin, they have 77% of the board influence of the company. and they are effectively using the board of the company as a mechanism format to get a basketball team. They put, Isaiah Thomas, who is an ex-basketball player on the board who also happens to sit on the board of Madison Square Garden. Which is owned by the Dolan family. Who owns the New York Knicks, and other basketball team. So handshake handshake graft is definitely not woke like putting people on your board like, owning all the control and the power and then circulating people on so that you can get ahead on buying a basketball team. That's not woke. So can congratulations kin folk mortgages for figuring that out? Basically, it's worth mentioning here. I looked at the actual, I read like the details of the mortgages, they're the same mortgages as Chase offers. Like, Jamie dimon is offering effectively the same mortgages, but you can get it from a not woke bank that make sure that their billionaire owner Their billionaire broker partner anyway, can buy a basketball team. Well, not basketball teams but like helping out I guess not the not woke. It turns out Alice Cooper. Now also not woke, here's the headline. Alice. Cooper calls woke ideology laughable. Slams, trans fat, It's calling trans people a fad. Cooper said quote, I find it wrong. When you've got a six year old kid who has no idea, he just wants to play and you're confusing him telling him. Yeah, you're a boy but you could be a girl if you want to be. That's what Alice Cooper. The ancient rock star said, meanwhile, if you dig one, Iota into Alice Cooper's history. Cooper wants used baby dolls. On stage impaled them and held their heads on spikes, wearing a full face of makeup. He's just lost his makeup endorsement turns out because he was wearing makeup that he was he had a sponsorship. He once said quote I think in the future everyone will be bisexual and everything would be so much simpler. Then you just make love with anyone you like and it wouldn't matter what sex they were. Maybe it wouldn't matter what color they were or what age or anything except that you like them. He said, that 1974 how times have changed when you're an old grumpy, man. In failing up news that we call last week, I just had to bring up this headline because this was my prediction from last Friday's show. After the Trump mugshot came out. Here's the headline, Trump's fans and critics alike are Plastering. His mugshot on everything from mugs to t-shirts and Trump raked in 9.4 million as his campaign sold. Tens of thousands of mugshot t-shirts and coffee mugs. It's just your Stones throw away from college dorm rooms. I said it was a win for poster makers everywhere. In other news, not a glass cliff. Apparently Mark Thompson CNN has appointed Mark Thompson, the former BBC director General as their new CEO, According to our data though, Mark actually has four separate bosses on the board of Warner Brothers, who owns CNN. He has zaslow, David zasloff the CEO of Warner Brothers, who has 19% of the influence of the board, but he also is got to contend with Stephen Moran, who has 14% moron is the CEO of a new house fan family. Media dictatorship Advanced PDF and there are a major Warner Brothers shareholder. Yes, to contend with John Malone, who of the Malone, family, who owns Liberty Media, which is literally, it's the, it's the biggest bulshit governance show I've ever seen in any company anywhere. If you think that, like when you think of like, you know, I don't know a Russian oligarch City on the, on the board of his company, putting his friends on the board or like a Korean chaebol, where like the company, you know, family owns five different. In companies that own each other, it's like a big mess. The Liberty Media Empire. Is the messiest board I've ever seen anywhere and they're made even worse by the fact that it's not just that they sit on each other's boards that they're everywhere. And then finally Paul Gould, who's a, who has 11% of the influence, he is a managing director at Allen & Company. The Investment Bank, that raked in millions from the Warner Brothers Discovery merger turns out that their board is 71% interconnected 7 out of 10 board members, there's 13 board members but seven out of 10 of them. Effectively are know each other like like within two phone calls or less. Women have 11% of board influence in 23% of the representation, a solid negative 12%, power Gap, the diverse cohort, people of color, and have 38% representation in 20% of the influence. So that's a nice negative 818%, power Gap. And I have not seen this many places but Warner Brothers, really has mastered the two fur which is having a woman who is also a person of color. Killing all the birds with one stone. They only have three women, all three are people of color really nicely, done, getting all the three, two, three, two first out of the way. Um, here's another story. I categorized this in history repeats itself. The story is 3M, earplug lawsuit. The company is to pay. Six billion with the B billion. Over claims that sold defective. Earplugs from the US to the US Military. So from apparently from 1999 to 2015, 3M knowingly, sold US military defective earplugs to the US military that caused hearing loss, amongst active military and, you know, ongoing with veterans. The company does not have to admit liability, but they're paying out six billion as part of this settlement, to cover the costs of the the medical costs. Now, Here's where history repeats itself. Now, if you listen to this show, you've heard us talk in the past about the graph D Boeing board, that greenlit planes that fell out of the sky. We actually map them together, we found that 2/3 of them were connected. To one guy Ken, duberstein. Who is the head in nominating committee? They're the ones that made the okay, the green light, they press the button and said go. With the max 8 planes. Well, it turns out when you have a bunch of stupid, fuk faces on your board, who make a decision like that, they tend to make that decision in a lot of different places. They don't just stop at one company because in 1999 3m's board which ostensibly oversaw the green lighting or at a minimum knew that this was happening because it's a military contract, nine times out of 10, that goes to the board, where there's because there are always complications with military contracts, they get a military contract that says, we're going to sell. Earplugs the board that oversees, this includes Roseanne Ridgeway, who was on the board of the company from like 1987. So she's already been on the board for 12 years of that point, but from 1985 until she retired in 1989. She was the assistant Secretary of State for European and Canadian affairs. For the Reagan White House. At the same time can duberstein was the chief of staff of the Reagan White House from an 88 and 89 Ridgeway is also on the board of the time with Frank shrunks, who is the chair emeritus of Boeing where she is. Also a board member with Ken, duberstein Ken duberstein Roseanne Ridgeway, Frank schrantz, all on the boards. All on boards together, they all know each other, it's a big Love Fest, right? Can do overseeing is the chair of the nominee Committee of bowing of the time and Ridgeway is on the board. Nominating committee at 3M where she later picks Eddie to join her. In 2000, at lady gets chosen by Ken duberstein and Bowing in 2010. Look, the fact is when you dig a little bit you realize that boards that make shit decisions, don't stop at the one board. They're on they go on to other boards and make shit decisions. So in 1999 3M board Greenlight something that costs 3 M 6 billion dollars. Two decades later And in 2011, the Boeing board, green lights, a plane that cost them, tens of, billions of dollars. One decade later and it's one small group of people. That are doing it. We know that more than half of the Boeing board was interconnected and half of the 3M board. At the time is interconnected, and they're interconnected with each other through multiple channels, through lobbying, firms and jobs, they've had together through boards. It's one small group of people who crash your planes and make you deaf and then they don't have to pay out later. You do when it comes turns out that they're all liable decades later. Which brings me to my final bit. Before I allow Paul to come in and tell you something, actually a value. And consider this. Little bit of a rant or a tirade, because I saw this headline. Former BlackRock exec. Tariq. Fancy many ESG. Experts are unqualified. Okay, I worked in ESG for a more than a decade at this point. I've been working in ESG data with the data for 15 years. I was adjacent to it for a couple years before that, but I know the players. I know the data really, really well. And I cannot figure out for the life of me why we keep asking a guy who worked in ESG for less than two years at BlackRock, what he thinks about ESG, he's never seen any ESG data point to my knowledge. Nowhere in his resume. But let's take a look. If we're all largely unqualified or under qualified to deal with ESG data. Let's take a look at the resume of the person who is saying that were under qualified to make sure that I live up to some standard here is the extensive qualifications of trick fancy prior to being the chief investment officer of sustainable investment at BlackRock, which he did from January of 2018 to September of 2019 less than two years. He's the CIO of sustainable investing. All right. He became that. There's a three-year Gap prior to taking that according to his LinkedIn. I don't begrudge anybody a gap and go be a dad. Go on a trip go you know family issues just quit for a little while who gives a shit. But prior to that he he is the chief restructuring officer of a singapore-based social media marketing company. He does that for three years. Prior to that. He's Building investor strategies, at CPP. The Canadian pension plan investment board. He does that for two years. Before that, he's working at a private Equity Firm doing turnarounds and special situation investing turnarounds basically bankrupt companies or near bankrupt companies that you're turning around. He did that for six years, he becomes their youngest partner in 2006. He does that from 2003 to 2009. Prior to that, he's a Investment Banking, Analyst at Credit, Suisse first, boss in and an internet Merrill Lynch. He and I actually are graduate the same year from Brown University. That's true. And I didn't know him but Brown at all. Why are we saying that people are under qualified to be. Yes, she experts. Why are we talking about it at all? When we both know, I am wearing the T-shirt. I'm probably as close as you're gonna get to an ESG expert. Given the amount of data that I've seen, and I wouldn't call myself an ESG expert, being an ESG expert, is being an expert in a data set. And that data set is monstrous and there's no such thing as someone who can be an expert in all the data it takes to understand, ESG. ESG data is data, right? All were really saying is, can you think about the data differently? That's the expertise that's required. So I don't know what under qualification means. If you're talking about ESG, experts are under qualified. Are you saying that they don't know how to think about the data is that what you're saying? Because guess what most people don't know how to think about any data. I just I was I got in a social media back and forth where somebody was saying like, you know, you make a good point because ESG isn't mature enough in this market and the data points, aren't you know, robust enough. Yeah. Well guess what, you know, what doesn't correlate to outperformance over the long run? They were they were saying that it doesn't correlate outperformance yet or now or ever or whatever you know, it doesn't Correlate. Any traditional financial data set. They don't correlate to outperforming nobody has taken a single data set and said, hey this correlates outperformance. We should all use it because once you all use it, it doesn't work anymore. You don't outperform the market. It is the market. That's the point, right? So really what you're saying is like, PE ratio, cash flow, like, none of those things over long time Horizons have a 90% correlation or 70% correlation, even a 50% correlation with Market outperformance. It doesn't doesn't work, Vanguard actually, did the study that on that specifically, about all those ratios and all sorts of different factors. Now, not one of them over a multi-decade period. Correlates So what do you under qualified to do? Exactly, the only thing you need to do with ESG data is think differently about markets. That's it, that's all you need to do. I agree with him. That ESG experts that are talking are largely blowhards. Like Tariq fancy who's blowing hard about what it takes to be in ESG expert? You are the fucking CIO of sustainable investing for less than two years prior to that had no experience in ESG. I was a music Major. We're apparently we're all under qualified but there's no such thing as a qualification because it's not a qualification, you just need to look at the data and use it differently. That's it. Stop talking about ESG at all, when anybody should be asking if you're in the media and you want like an ESG hot take, if you're just looking for Tariq fancy to say everyone in ESG is an idiot. Can you read his resume and see exactly what his qualifications are for ESG in the first place? Anyway, like everyone is an idiot period like I guess so give you the quote you want and this is that what we're doing because if you want to ask people who, like, use the data on a regular basis, like we do here, Then there are people who know what they're talking about when you say ESG, and then there's people who know how to talk about it and maybe that's his point. Yes, she experts are under qualified in which case isn't Tariq fancy. One of those experts. Is he talking about himself? All I know is that this headline? Definitely triggered me because I've spent enough time in the data to know that. No one knows what they're talking about and I include myself and I'm wearing the fucking t-shirt. Let's bring in Paul to round us out. I'm gonna play Paul in while he walks in. He is he's calling in from some far away land. Let's see what you gotta say to us. This is the great Paul Hodgson of s gauge, teaching us some things. Bonjour me. When you listen to this, I will be in Quebec eating quasim. Probably or maybe a delicious French lunge but still, you don't miss me. I have recorded a piece to play in my absence. Hi Paul, Hudson of SK, statistic of the week as promised on the last little statistic of the week. We're going to talk about board meeting in the frequency of board meetings. Not really changed a lot over the years, from 2018 to 2023. Maybe a small increase in the number of companies with less than 8 per year. From 55.6 in 2818 to 61.3 and 2023 terms of the number of meetings, more specifically. So 8 meetings, a year nine, 10 11 and 12 again very little change in those over the years from 2018 to 2023. For example, those companies with 11 meetings, a year went from 4.8 in 2818 to 3.4 percent in 2023. This is for the Russell 3000, there was a bit of a spike in 2021, in terms of companies with more than 12 meetings per year. I think we might be able to attribute that to covid-19 and its aftermath. So 20.2% of typically, the only between 11 points 6 and 7.7% of companies with more than 12 meetings per year and a corresponding decrease in the company's having less than eight meetings per year all, so in 2021 Down to 42.2% of the Russell 3000. Now, we can also look at the difference in practice between the Russell 3000 and the S&P 500 and let's just focus on 2023 for that. So the S&P 500 slightly fewer percent, a slightly smaller percentage of companies rather with less than 8 meetings per year in the S&P. 500 60.4 percent compared to 61.3% in the S&P 500, fewer also companies with 12 or more meetings per year, 6.5% in the S P, 500 compared to 7.7% in the Russell 3000, what you see in the S&P 500 as a more concentrated number of meetings per year in the S&P 500, very focused on either eight or nine meetings per year. 11.9% with 8 meetings a year and 8.7% with nine meetings per year whereas in the Russell 3000 that's kind of Spread across the eight, nine ten eleven twelve numbers of meetings per year with a variation between 3.4% with 11 meetings per year and 9.4% with 8 meetings a year. So there we are. Number of board meetings tend to react to external events certainly and with the S&P 500 consistently having eight or nine meetings per year that seems to be pretty close to their common practice. So this is Paul Hodgson signing off with skates statistic of the week. So first of all, think about that eight to nine meetings the year and they make 250 to 400,000 dollars. What a gig? I could be on the 3M Boeing board. That's all. We got a. We are free float. This show is sponsored by ESG Data Solutions provider and my free. Float, analytics.com. Go there. Sign up. Get a whole bunch of board date of the board data. I'm talking about a lot of it's up there. But you know what? If you want to sponsor this show too, You too, can be an underqualified, ESG expert and sponsors this show. By sending us some money. Because we want the money and we'll pitch your product because we're real good at it. As you can tell, we'll be back on Friday and Damien will be here. And so will the rest of the team? Potentially, Ari might even be back, but I doubt it until then. Good. Bye. Hi.