The annual proxy for this electric power holding company had the following proposals:
- Proforma votes on directors, the appointment of auditors, and executive compensation
- Shareholder proposals on eliminating supermajority voting requirements and two proposals related to lobbying and political activities
Magni voted as follows:
- 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” advisory vote – The disclosure related to the shareholder engagement program was adequate. The peer group was listed, and high-level criteria were disclosed; however, the company was not benchmarked against the peer group. Disclosure of the position of the company against the peer group is important transparency.
- For and against shareholder proposals.
-For independent chairman – An independent board is an important part of good governance. An independent chairman is an element of an independent board, though there are situations where an independent chairman does not make sense (e.g., a visionary founder where a material portion of the company value is connected to the founder). This company does not have one of those situations.
-For eliminating supermajority voting requirements – The board has had similar proposals in the past. Many supermajority requirements are a legacy of the 1980s.
-Against both proposals related to lobbying and political activity – The company already provides good disclosures of lobbying activities. These proposals seek to lump industry group activities with political activities. There are good reasons for a company to participate in an industry group. Many of those reasons are unrelated to lobbying. Assuming all such industry activity as political is wrong.