Proxy Blog

American Water Works Company, Inc. 

April 3, 2019

The annual proxy for this public utility company had the following proposals: 

  1. Proforma votes on directors, the appointment of auditors, and executive compensation 
  2. Votes on shareholder proposals covering political contributions and lobbying expenditures 

Magni voted as follows: 

  1. For all 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” – The shareholder engagement and peer group disclosures indicate good governance practices in executive compensation. 
  2. Against shareholder proposals. 
    -Political contributions  The proposal requested greater disclosure of political contributions. Generally, disclosure is good. However, this proposal defined contributions too broadly as it included industry groups where the company has an important interest to participate and the dues for the industry group cover a variety of important programs beyond political activities. Magni would be supportive of a more targeted version of this proposal.
    -Lobbying expenditures – The proposal requested greater disclosure of lobbying expenditures. Generally, disclosure is good. However, the company already provides significant disclosure and the vague definitions in the proposal may create confusion if implemented. Magni would be supportive of a more targeted version of this proposal.