Proxy Blog

Fastenal Company 

April 8, 2019

The annual proxy for this fastener distributor had the following proposals: 

  1. Proforma votes on directors, the appointment of auditors, and executive compensation 
  2. Vote on shareholder proposals covering diversity reporting 

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 some ownership requirementsDespite voting for the director candidates, Magni would like to see more of the director compensation be in the form of equity and the ownership requirements increased to a higher multiple of annual compensation (e.g., five times annual compensation).
    -For auditors  There appear to be no controversies with the financial statements of the company.
    -Against “Say-on-pay” Advisory Vote  The company discloses no shareholder engagement beyond the required vote. The peer group of companies is listed, though the criteria for inclusion is superficial. Without input from shareholders and vagueness on the peer group, the board is not being accountable to shareholders for assuring management is compensated consistent with shareholder interests. 
  2. For shareholder proposals on diversity – The existing company disclosures are below many other companies. The company response to the proposal was defensive without a clear demonstration of strong actions to improve diversity. The shareholder proposal was relatively modest and made reasonable requests. It was easy for Magni to vote for this proposal.