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.