The annual proxy for this wireless and broadcast communications infrastructure company had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
- Shareholder proposals on independent chairman and disclosure of political contributions
Magni voted as follows:
- For proforma proposals.
-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.
-Auditors – There appear to be no controversies with the financial statements of the company.
-“Say-on-pay” Advisory Vote – The proxy materials discuss shareholder engagement activities, though the level of activity should be disclosed. The peer group was listed along with the logic that was used to create the peer group. This company requires a custom peer group given its business portfolio. Given the custom nature of the group, the use of an explanation of the reasons for the peer group is understandable. The decision on this vote was difficult as the company behavior is neither consistent with, nor sufficiently inconsistent with, governance best practices. Magni voted for the proposal this year, however compensation practices need to be strengthened to maintain Magni’s continued support.
- For and against the shareholder proposals.
-For independent chairman – Magni wrote a position paper regarding shareholder proposals for independent chairman.
-Against political disclosure – The shareholder proposal is generic and contains only one specific deficiency of the company: contributions to trade groups. The company has policies and disclosures that address the substance of what the shareholder is proposing. Much of the money donated to trade groups is not used for political activities. If the shareholder wants to understand the political spending of trade groups, the shareholder should push for disclosure by those organizations.