(Chicago) Brian Rogers, chairman and chief investment officer of Baltimore-based T. Rowe Price, gave the final keynote presentation during to the 2008 Morningstar Investment Conference and focused on corporate governance. The executive, who has been with the firm since 1982, says that he and other T. Rowe staff — which number 5,200 and manage some $400 billion in assets — speak and meet many of the 3,400 companies the fund group has invested in.
That’s given him a wealth of experience on corporate governance, and “We take this seriously,” he says. Rogers explains that the firm believes it has an obligation to protect investors’ interests, respond to the changing corporate-governance environment, appreciate the importance of “responsible activism,” engage in three phases of interaction (ongoing dialogue, proxy voting and direct engagement) and apply common sense to complex issues.
Wrap UpIn summarizing the past 20 years of corporate governance, Rogers says: o The world of corporate governance will continue to evolve;o We have an obligation to protect the interests of our investors;o Common sense is a great starting point; ando Be a realist and a pragmatist, not an ideologue.
In terms of recent proxy-voting results, T. Rowe casts its support for directors 85 percent of the time and against them 15 percent of the time. It has approved management-supported compensation plans 80 percent of the time and been against such plans 20 percent of the time.
As for corporate-charter issues and majority-voting issues, it has generally supported such measures 100 percent of the time. However, it has been against the separation of the CEO and chairman roles 60 percent of the time, and for such separation 40 percent of the time.
In 2007, Rogers says, T. Rowe disagreed with management on at least one issue, and that was reflected in its proxy-voting record that year. “We generally don’t support say-on-pay proposals, and we [instead] go directly to the compensation committee,” he adds.
Janet Levaux, MBA/MA, is the managing editor of Research; reach her at firstname.lastname@example.org.