Proxy Blog

Boston Scientific Corporation 

April 7, 2020

The annual proxy for this medical device company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal on long-term incentive plan 
  3. Shareholder proposal on employee directors 

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 did discuss shareholder engagement effortswhich included discussion of compensationThe peer group was listed, but the process and criteria were vague. The company needs objective criteria for the determination of the peer group. 
  2. For board proposal on long-term incentive plan – Such plans align the interests of management, directors, and employees with the shareholders. 
  3. Against shareholder proposal on employee directors – Good corporate governance involves managing stakeholder relationships, including relationships with employees. That said, non-management employees as members of a board of directors is a tactic. In and of itself, such a tactic will not guarantee good relationships with employees. The company already is one of the better governed companies on the U.S. exchanges. The proposal does not identify any deficiencies in the company’s management of employee relationships. Given the strength of the company’s governance and the lack of identified deficiencies, it is easy to vote against this proposal.