1. GE Shareholders Urged to Kick KPMG to the Curb by ISS, Glass Lewis

    GE Shareholders Urged to Kick KPMG to the Curb by ISS, Glass Lewis

    GE directed TheStreet to its proxy statement, which argues the benefits of a long-tenured auditor, such as KPMG's familiarity with GE's business ... at a large-cap company, according to Charles Elson, the director of the John L. Weinberg Center for Corporate Governance at the University of Delaware...

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    1. In light of the apparent extent of GE's previously-undisclosed liabilities and accounting issues accompanied by unqualified reports by long-time auditor KPMG, a vote against this proposal is considered warranted.
    2. In this case, we believe shareholders should reconsider the ratification of KPMG in light of several ongoing concerns, including the recently announced SEC into the company's accounting practices, historic criticisms of the company's relationship with KPMG, and KPMG's extremely long tenure with the company.
    3. While we acknowledge the company's disclosure of the measures taken to ensure KPMG's independence, we nonetheless believe that auditor rotation benefits shareholders, as it helps ensure both the independence of the auditor and the integrity of the audit.
    4. A shareholder vote [against an auditor] in a large, existing company doesn't happen to often, if at all.
    5. A vote for this shareholder proposal is warranted given that the company's short- and long-term underperformance and questions about the viability of its business model and corporate culture suggest that shareholders would benefit from the most robust form of independent boardroom oversight, provided by an independent board chair.
    6. There is ample evidence to suggest that GE in its current form is sufficiently large and complex that it is difficult for any one person to both run the company and run the board.
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