The annual proxy for this software company had the following proposals:
- Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote
- Board proposal on equity incentive plan
Magni voted as follows:
- For 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.
-Auditors – There appear to be no controversies with the financial statements of the company.
-“Say-on-pay” – The proxy documented the shareholder engagement activities, which included discussion of executive compensation. The peer group was listed. Though the criteria were high level, the proxy materials showed how the company compared to the peer group, thus reducing the risk of a gerrymandered peer group.
- For board proposal. Equity incentive plans are a good tool for aligning management of a company with shareholder interests. The amendments to the existing plan are relatively minor and the changes are consistent with good governance.