Proxy Blog

Amerisourcebergen Corporation 

February 7, 2020

The annual proxy for this drug wholesale company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on written consent and on a deferral period for compensation 

Magni voted as follows: 

  1. 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 and the associated activity level, though compensation was not listed as a target topic of discussion. The peer group was listed, though without any meaningful criteria. There was no comparison of the company to the peer group. Collectively the exclusion of a topic important to shareholders from the engagement discussions and incomplete disclosures on the peer group keep a very important process opaque. Opaqueness is inconsistent with good governance. 
  2. Against shareholder proposals.
    -Written consent – Per the Magni position paper, Magni routinely votes against these proposals.
    -Deferral of compensation – As with last year, this vote was a tough call. The shortcomings in the disclosures on executive compensation could justify a vote for this proposal. That said, the company already has clawback provisions and does use many of the standard compensation practices. A proposal to get greater transparency in compensation disclosures would be an easy “yes” vote.