Proxy Blog

Amerisourcebergen Corporation

February 6, 2019

The annual proxy for this healthcare 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 preventing adjustments to financial metrics for compensation purposes

Magni voted as follows:

  1. Magni voted 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 proxy materials did not disclose any shareholder engagement efforts. The advisory vote language was pro-forma with no serious evidence that the vote matters.
  2. Magni voted for and against shareholder proposals
    -Against written consent – Per the Magni position paper, Magni routinely votes against these proposals.
    -For preventing adjustments to financial metrics for compensation purposes – This vote was a tough call. On one hand, transparency and clarity are important, so preventing adjustments reduces the risks of misaligned or excessive compensation schemes. However, there can be times when adjustments should be made as the issue is outside the control of management. On balance, preventing problems with the compensation schemes is more important, so Magni voted for this proposal.