SIOUX FALLS, S. D., April 25, 2012 /PRNewswire/ -- Forbes has recognized NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) as one of America's Most Trustworthy Companies for the second time.
"We're proud to be named as one of the 100 Most Trustworthy Companies in the country because it means that we're doing many of the right things," said Bob Rowe, President and CEO. "Companies that make this list don't have problems that indicate elevated risk. NorthWestern Energy has consistently demonstrated transparent and conservative accounting practices, solid corporate governance and management."
The announcement came as NorthWestern Energy's shareholders overwhelming approved proposals to elect each of the directors to another annual term on the board and the company's executive compensation pay structure.
The last few years have seen their share of corporate scandals, bailouts and bankruptcies. Forbes set out to identify the most transparent and trustworthy businesses that trade on American exchanges. Forbes uses an independent financial analytics company, GMIRATINGS, to conduct quantitative and qualitative analysis that looks beyond the raw data on companies' income statements and balance sheets to assess the true quality of corporate accounting and management practices.
GMI's evaluation penalizes companies for unusual or excessive executive compensation, high levels of management turnover, substantial insider trading relative to their corporate peers, or high levels of short-term executive compensation, which encourages management to focus on short-term results. The absence of negative events counts as much as the existence of positive events.
To create the list, GMI examines more than 8,000 companies traded on U.S. exchanges and assigns an accounting and governance risk score (AGR) quarterly to each company based on a proprietary modeling methodology.
To qualify for the roster, the 100 companies (segmented by market size) all had to have market caps of $250 million or more at the time the list was prepared (March 31, 2012). Over the last four quarters, the companies must have maintained conservative or average AGR ratings, and had no amended filings with the Securities and Exchange Commission, no SEC enforcement actions, and no material restatements. They also had to rank high in GMI's Equity Risk Ranking, which indicates a positive forecast for equity returns, and have minimal likelihood of financial distress as measured by GMI.
According to GMI, studies show that well-governed companies with transparent accounting have a higher price premium than their competitors, reduced cost of capital, and a higher long-term return for shareholders.
NorthWestern was also recently recognized by Glass Lewis, a leading investment research and global proxy advisory firm, as one of the top 42 companies in the US for its 2011 "Say on Pay" proposals. Although the rules require a shareholder vote once every three years, NorthWestern Energy's Board of Directors places the issue before shareholder annually. Glass Lewis recognized the 42 companies both for the quality of the compensation disclosures in their proxy statements and for the structure of their executive compensation programs. The Glass Lewis study was based on a review of almost 1,700 2011 corporate proxy statements.
About NorthWestern Energy
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 668,300 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the company's website at www.northwesternenergy.com.
SOURCE NorthWestern Corporation