Proxy Blog

Gap Inc. 

May 8, 2019

The annual proxy for this clothing and accessory retailer had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal on long-term incentive plan 

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 a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay” – Shareholder engagement was not addressed in the proxy materials. The peer group was listed, though the disclosure of the criteria was vague and the company made a reference to manipulating the peer group data. Perhaps the manipulations are appropriate, however without disclosing themsuch activity is very inconsistent with good governance. 
  2. For board proposal. Long-term incentive plans are a good tool for aligning management of a company with shareholder interests. The amendments to the existing plan are relatively minor and the changes are consistent with good governance.