Proxy Blog

Emerson Electric Co.

January 10, 2020

The annual proxy for this manufacturing company had the following proposals: 

  1. Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposals to declassify the board 

Magni voted as follows: 

  1. 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 shareholder engagement as a priority with summary information about the company program, yet the disclosures did not identify the level of activity. The peer group was listed, along with the criteria. The company is somewhat smaller than the average of the peer group. There is a risk of upward bias on the executive compensation program. 
  2. For board proposal. Board with class structures are less sensitive to shareholders as most directors do not stand for election in any given year. All board members should stand for election annually.