Proxy Blog

FMC Corporation

April 10, 2019

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

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal to eliminate supermajority vote requirements to remove directors 

Magni voted as follows: 

  1. For all 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. 
    -Auditors – There appear to be no controversies with the financial statements of the company.
    -“Say-on-pay” – The proxy materials discussed a shareholder engagement effort with compensation being one of the topicsThe peer group for compensation benchmarking was identified, though the criteria for inclusion in the peer group could have been more objective. While flawed, enough of the basic process for good governance is in place to justify a vote for the proposal. 
  2. For the board proposal to eliminate supermajority vote requirements to remove directors. Requirements for supermajorities within governance guidelines tend to exist to protect the status of a powerful minority and hence are not consistent with strong shareholder relationships. Occasionally, such requirements are helpful in fending off hostile takeover attempts or can be a useful tactic in optimizing valuations when selling the company. Since the board is proposing the change and it is consistent with good shareholder relationships, it is easy to vote for the proposal.