Proxy Blog


May 10, 2018

The annual proxy for this electronic commerce and cloud computing company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Diverse board candidates
    -Independent chair
    -Change vote counting process 

Magni voted for and against proposals: 

  1. Magni voted proforma proposals as follows.
    -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. The compensation levels are set using a benchmarking process.
    -For auditors. There appear to be no controversies with the financial statements of the company.
    -Against “Say-on-pay” proposal. The proxy disclosures were perfunctory. Key missing disclosures included explanations of major contract clauses and data used in benchmarking compensation.

  2. Magni voted for and against shareholder proposals.
    -For diverse board candidates  The proposal would work analogous to NFL head coaches where the slate for an opening would need to include diverse candidates. The existing board is diverse; however, it is not particularly strong as it lacks serious public company CEO and CFO experience. The company’s statement against the proposal says that they have clear and strong criteria for filling board posts. Since some of the most important skills for a public company board are not currently available on the board, Amazon does not have clear and strong criteria. As such, the requirement of a diverse slate will not adversely impact the company.
    -For independent chair – Generally having an independent director as board chair is a good idea, though there are instances where a combined CEO and Chairman make sense, especially in companies at an early stage. Amazon is sufficiently mature to separate the roles.
    -Against shareholder proposal on vote counting – The proposal wants to shift from a majority of shares to a majority of votes cast. While many proposals can be effectively affirmed by a majority of votes cast, important matters should require a majority of all shares.