The annual proxy for this chemical company had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
Magni voted for and against proforma proposals.
- For directors – The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation.
- For auditors – There appear to be no controversies with the financial statements of the company.
- Against “say-on-pay” – The proxy materials disclosed a shareholder engagement program, though the activity was passive (i.e., shareholder initiated) and the scope of topics was unclear. The peer group was listed and objective criteria for construction of the group were listed, though there was no benchmarking of the company against the peer group. The shareholder engagement should be more proactive with a clear scope of discussions, while the shareholders should understand how the company compares to the peer group.