The annual proxy for this toy manufacturing company had the following proposals:
- Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote
- Board proposal for amending the share incentive plan
Magni voted as follows:
- For and against the 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 documents described shareholder engagement activities as a result of the “say-on-pay” vote in 2014. No subsequent shareholder engagement was described. The peer group was listed, though the criteria were high level. The materials disclosed that the company was at or above the average on key metrics when compared to the peer group, but it needs a shareholder engagement program.
- For the board proposal. Stock incentive plans are a good tool for aligning management of a company with shareholder interests. The amendments to the existing plan are relatively minor and the changes are consistent with good governance.