Proxy Blog

CenturyLink 

May 8, 2018

The annual proxy for this communications and cloud computing company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Lobbying disclosure
    -Billing practices 

Magni voted as follows: 

  1. Magni voted for and against the proforma proposals.
    -Against all directors – None of the directors on the board had CEO or CFO experience at another company. Three were tied to Level 3, which acquired CenturyLink, and such a concentration of experience is inconsistent with the breadth of skills required of an independent board. Two of the director candidates are former executives who are now classified as independent. A small amount of prior experience with the company can be helpful.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    For say-on-pay” Advisory Vote – The proxy materials demonstrated that the board has more than considered shareholder feedback on executive compensation. In addition, the proxy materials disclosed the benchmarking done on executive compensation, including listing the peer group used in the benchmarking.

  2. Magni voted against shareholder proposals.
    -Lobbying disclosure – CenturyLink already provides significant lobbying disclosure. The shareholder proposal was mainly targeted at an organization called ALEC. The merits of ALEC can be debated; however, those debates belong elsewhere. Transparency is an important part of good governance and CenturyLink is already transparent.
    -Billing practices – In reading the supporting statement from the shareholder, this proposal is basically a rant from an upset customer. Management should be addressing customer satisfaction issues. The board should be making sure management is focused on good customer relationships. If the board is not doing its job, then the shareholders should change the board. Per above, the board is weak and not sufficiently independent.