Auto industry returns to Delaware for a day

A little bit of Detroit comes to Wilmington Thursday when Ford Motor Co. holds its annual shareholders meeting at the Hotel du Pont.

On paper, it shapes up to be a lovefest compared with a few years ago when it seemed as if the domestic auto industry had fallen and would never get up.

Shareholders voted on 12 different proposals last year. More than half were sponsored by shareholders, including one seeking the right to cast an advisory vote on executive pay.

This year, the proxy is positively svelte with just eight proposals, including another one on “say on pay.” Last year, Ford shareholders rejected it in a vote in which just 9 percent of shares were voted in favor.

Once again, the board of Ford is telling shareholders to vote down the proposal, which is sponsored by John Chevedden, a Californian who owns 600 shares. Ford said advisory votes are “not an effective mechanism for conveying shareholder opinions” on executive compensation practices.

Instead, Ford suggests shareholders communicate their specific concerns about pay practices directly to the board’s compensation committee.

“Say on pay” proposals appear on dozens of proxy ballots this year. But they’re not slam dunks for either side of the issue.

CORRECTION POSTED MAY 10 AT NOON: Motorola Inc., which has a major division based in the Philadelphia, adopted a "say on pay" proposal in 2008, giving shareholders a non-binding advisory vote.

So how'd that work out this year? On May 3rd, 46 percent of Motorola shareholders voted "for" the pay practices of the big cellphone and cable-equipment maker. That means 44 percent voted "against" and 10 percent abstained.

Proxy advisory firm RiskMetrics Group said the vote marked the "first time that a U.S. company has failed to earn majority support" for a non-binding vote on compensation. 

Thanks to a reader who also happens to be a compensation consultant for clarifying the Motorola vote.

Waiting Game

Buy low and sell high.

That’s the way to create wealth whether you’re investing in stocks, art or, for private-equity investors, companies.

When Graham Partners, of Newtown Square, invested in King of Prussia-based ICG Commerce during the go-go, dot-com days, “low” was relative. Lots of money was being dumped into all sorts of companies that had an “e” or “.com” in their names.

Back then, ICG Commerce was billed as a provider of online procurement services to multiple industries. In 2000, it raised $117 million from a bunch of investors, including Graham Partners and Wayne’s Internet Capital Group Inc.

In fact, Graham Partners invested in ICG Commerce in two rounds in 2000 and 2002. The first wound up being written down to zero. The second had more favorable terms, but required patience following the bursting of the technology stock bubble in March 2000.

Last week, Graham Partners sold its 12 percent stake in ICG Commerce to Internet Capital Group for $35.3 million. For Graham Partners, the sale meant it generated a return of more than twice what it had invested.

Steven C. Graham, senior managing principal of the private-equity firm, called the sale of the stake in ICG Commerce a “win-win” for both sides of the deal. Internet Capital Group was able to boost its controlling stake in ICG Commerce to 76 percent from 64 percent. Graham Partners, which has more than $1.5 billion under management, received cash to return to its investors.

For the rest of 2010, Steven Graham sees signs of improvement in the economy and mergers and acquisitions market. But conditions are far from what they were before the financial crisis. “It’s going to be a long, slow grind back,” he said.

Still, good signs are evident in Graham Partners' portfolio of 15 mostly manufacturing companies. About 90 percent of the companies recorded higher sales and earnings before interest, taxes, depreciation and amortization than last year, Graham said. About six months earlier, less than 10 percent of the portfolio had higher earnings.


2009 was the perfect storm which negatively affected the world’s refining industry. Storms don’t last forever and it seems to have passed.

- Thomas D. O’Malley, chairman of Petroplus Holdings AG, the Switzerland-based oil refiner that has acquired the now-closed Delaware City refinery from Valero Energy.