Ask Neubert: How I Voted My Abbott Labs Proxy

First, let me say that I own Abbot Labs (ABT) because I think the company has good value.  Abbott has a good franchise of drugs and its research will continue to make more useful drugs.  At a forward P/E of 10 and growth that represents good value, it has been hit too hard by investors' lack of interest in the pharma sector.  So I think now is a good time to own the company, as I think the stock is about to go higher.

I’m always touting the importance of voting one’s proxy so I wanted to share my votes with you:

Annual Meeting of Shareholders: Friday April 29, 2011

ITEM 01
I voted FOR all the board members on the slate except the compensation committee, who decided the CEO needed $25mm and most of the other top officers between $5mm and 10mm.  

Now, I’m not saying that these guys aren’t talented--but does anyone really need to make so much money, just for being an employee?  They didn't found the company and have taken almost no risk.  I do believe that risk-taking entrepreneurs deserve big paychecks--but not someone with benefits and no chance of losing his home or personal financial life.   I would have had no problem with $2mm to $5mm. 

ITEM 02

Ratification of Deloitte and Touch as Auditors: FOR.  They are a very reputable firm.

ITEM 03
Say on Pay advisory vote on executive compensation: AGAINST.   However, I must say that it is very forward thinking of Abbott Labs to have a “say on pay” approval in its proxy.  Yet another reason why I like this company.

ITEM 04

Say on Pay frequency of shareholder compensation approval votes:  1 YEAR

ITEM 05

Shareholder proposal.    The Sisters of Charity of Saint Elizabeth propose the following: “The Board of Directors create and implement a policy of price restraint on branded pharmaceuticals, utilizing a combination of approaches to keep drug prices low.”  AGAINST

While I love the idea of lower drug prices and shareholder activism, I don't think it’s fair to make any one company do this itself.  Most countries have some kind of regulation of drug prices--I would rather lobby for systemic change than put this all on one company.