The annual proxy for this oil and gas company had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
- Shareholder proposals on:
-Special shareholder meetings without cause
Magni voted as follows:
- Magni voted for the 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 proxy materials demonstrated that the board has more than considered shareholder feedback on executive compensation. In addition, the proxy materials disclosed the benchmarking done on executive compensation, including listing the peer group used in the benchmarking.
- Magni voted for and against shareholder proposals.
-For independent chairman – The independence of a board of directors is part of good governance. Separation of the chairman and CEO roles is usually a good part of maintaining independence.
-For special shareholder meetings without cause – Similar to reducing the threshold for special meetings. Removing the requirement for a cause to hold a special meeting is good for shareholder engagement.
-For lobbying disclosure – Transparency is critical to good governance. Lobbying activities should be disclosed. Exxon Mobil is not very transparent about the current efforts and expenditures.
-Against diversity matrix – Social justice is an important part of good governance. Social justice strengthens stakeholder relationships, particularly employee relationships. Most companies need to continue to do more for social justice. That said, Exxon Mobil already has strong diversity programs. Magni would support this proposal in a company with a less-well developed diversity program.