Proxy Blog

Allergan

April 11, 2018

This Irish pharmaceutical company’s annual proxy had the following proposals: 

  1. Proforma votes on directors and appointment of auditors 
  2. Proforma European votes on approval of accounts, annual confirmation of authorities, and compensation plans 
  3. Shareholder proposal on independent chairman 

The available disclosures were incomplete and substantially less than found in an American proxy statement. Magni voted as follows: 

  1. For and Against proforma proposals.
    -For and against Directors – Four members of the slate (i.e., Basgoz, Coughlin, McDonnell, and O’Sullivan) are directors through prior acquisitions. These board members should not be considered independent. Magni voted against these four director candidates and for the rest of the slate.
    -For Auditors – The accounting statements seemed to be in order. The disclosures appeared complete. And there were no apparent accounting controversies. 
  2. For European proforma proposals.
    -Accounts & authorities – Under US laws and regulations, these matters are handled by the board, thus the topics do not warrant votes by shareholders of US companies. Magni usually votes in support of these topics, unless some controversy or issue has arisen that requires additional investigation or justifies a vote against. In this case, the lack of a proxy is a form of opaqueness, and opaqueness is incompatible with good governance. That said, Magni voted for the accounts and authorities since in the U.S. the topics are not matters requiring shareholder votes.
    -Compensation  The disclosure materials were consistent with US best practices. 
  3. For shareholder proposal. An independent chairman is an aspect of assuring an independent board, though other aspects are more important. Unless there are mitigating circumstances, Magni votes in favor of independent chairman proposals. There appear to be no mitigating circumstances where separation of the chairman and CEO roles would cause a problem.