Proxy Blog

Davita Inc. 

May 29, 2019

The annual proxy for this managed care provider had the following proposals: 

  • Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote 

Magni voted 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 stockholder engagement activities which included discussions regarding executive compensation. The peer group was listed, though the criteria were very high level. The materials showed a comparison of the company to the peer groups on relevant metrics, however the comparison showed that the company is smaller than the peer group. Between high-level criteria and a peer group that is somewhat bigger than the company, there exists the opportunity for target compensation to be higher than appropriate.