SiliconBeat

We noticed something curious in Sun Microsystems proxy filed Tuesday afternoon. In its introduction to two proposals put forward by shareholders for a vote, the company did not name the shareholder requesting the vote or how many shares they own.

One of the proposals on the agenda for Sun Microsystem’s upcoming annual meeting Nov. 8 is asking for adoption of a rule seeking a simple majority vote on most issues. As the proposal puts it:

Our current rule allows a small minority to frustrate the will of our shareholder majority. For example, in requiring a 75%-vote on certain key governance issues, if our vote is an overwhelming 74%-yes and only 1%-no — only 1% could force their will on our 74%-majority.

The proposal goes on to say that “the need for adoption of this proposal should also be
evaluated in the context of our company’s overall corporate governance,” citing several
“concerns”, among them (our notes are in italics):

• The fact that Scott McNealy stayed on as chairman of the board after resigning as CEO, a “red flag” increasing “governance risk” for the company according to The Corporate Library, an investment research firm.
• The fact that two directors (looks like Peter Currie and Michael Marks) “held 4 or 5 board seats,” leading to a concern about over-commitment on their part.
• The fact that 4 directors owned no stock, leading to a concern about “lack of commitment” to the company on their part (Although we could only identify two — Peter Currie and Patricia Miller — who hold options but appear to  own no shares outright.)
• The fact that 6 directors (each of these is named: James Barksdale, Stephen Bennett, Peter Currie, Robert Finocchio, Patricia Mitchell and Naomi Seligman) also served on boards of other companies that received a “D” grade on their corporate governance practices by The Corporate Library, including Oracle , Intuit, Altera and CNet

In addition to holding a vote on the matter, the shareholders are asking the board to do
everything in its “power such as special company solicitations and one-on-one management contacts with major shareholders to obtain the vote required for adoption of this proposal topic.”

Fat chance, since the board is recommending a no vote on it and another proposal asking that shareholders be allowed to vote on a non-binding “advisory resolution” ratifying executive’s compensation each year.

Although it refused to print their name’s in the proxy, the board said it would “promptly provide you with the name, address and, to Sun’s knowledge, the number of voting securities held by the proponents of either of the stockholder proposals, upon receiving a written or oral request directed to: Sun Microsystems, Inc., Attn: Michael A. Dillon, Corporate Secretary, 4150 Network Circle, Santa Clara, California 95054, (650) 960-1300.”

If any of you Sun shareholders read this, and find out who the mystery shareholders are, we’d like to know.