Proxy Blog

Ford

April 13, 2018

The annual proxy for this auto manufacturer had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -One vote per share for all shares
    -Disclosure of lobbying and political contributions
    -Additional CAFÉ reporting 

Magni voted as follows: 

  1. Magni voted for and against the proforma proposals.
    -For all but one director – 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. Against Edsell Ford as only one Ford family member should be on the board.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against “Say-on-pay” Advisory Vote The proxy materials did not discuss the results of prior votes or identify shareholder engagement activities regarding compensation. Good governance involves strong shareholder relationships. Listening to shareholder input is part of building good relationships.

  2. Magni voted for and against shareholder proposals.
    -For one vote per share for all shares – Special voting rights that enable some shareholders to have greater than pro rata control is not consistent with strong shareholder relationships and, hence, good governance. Eliminating these special voting rights will strengthen the governance at the company.
    -For lobbying and political disclosure – Transparency is key to good governance. In the proxy materials the company defended being opaque. 
    -Against additional CAFÉ disclosure – Corporate Average Fuel Economy (CAFÉ) is a government requirement. Ford needs to adhere to government requirements. Additional reporting is not required. If the shareholder believes CAFÉ is inadequate, the shareholder should pursue changes by government.