The annual proxy for this industrial conglomerate had the following proposals:
- Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote
- Board proposal on eliminating supermajorities
Magni voted as follows:
- For and against the proforma proposals.
-For and against directors – Two of the directors are founders of Danaher. The split of Fortive from Danaher occurred almost three years ago. One Danaher founder is sufficient on the board. Steven Rales appears to have the stronger set of experiences. Magni voted for Rales and the two independent candidates, while voting against Mitchell Rales.
-For auditors – Last year Magni voted against the auditors as a protest against governance weaknesses. One of last year’s major weaknesses was the independence and accountability of the board. This year the board is proposing a change to improve accountability to shareholders by eliminating supermajority voting requirements. This improvement is demonstration that the company is improving governance. This year, Magni will not make a protest vote. Since there appear to be no controversies with the financial statements of the company, Magni votes for the auditors.
-Against “say-on-pay” – A new shareholder engagement program is explained in the proxy materials, and the program includes discussions of executive compensation. The peer group is listed but the criteria is high level. High-level criteria are subject to gerrymandering, and that is particularly true with this company as there is no information about how the company compares to the peer group in relevant metrics.
- For board proposal to eliminate supermajority voting requirements. Strong shareholder relationships mean avoiding governance structures that reduce or eliminate the impact of shareholder votes. Governance structures with supermajority voting requirements are inconsistent with strong shareholder relationships.