Proxy Blog

Ecolab Inc. 

April 6, 2020

The annual proxy for this water and hygiene company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposal on proxy access 

Magni voted as follows: 

  1. 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. The compensation levels are set using a benchmarking process.
    -Auditors – There appear to be no controversies with the financial statements of the company.
    -“Say-on-pay” Advisory Vote – The shareholder engagement and peer group disclosures indicate good governance practices in executive compensation. 
  2. Against the shareholder proposal – The proposal focused on the ability to nominate directors. Generally, Magni votes in favor of proposals that strengthen the relationship with shareholders and that enable shareholders to have a stronger voice. That said, there are many other aspects of shareholder input where increased access is important, including shareholder proposals and calling special meetings. This proposal would expose the company to a corporate raider who wanted to squeeze the company financials for near-term profits. Such action would hurt the many governance strengths built over an extended period.