Proxy Blog

Garmin Ltd. 

May 15, 2019

The annual proxy for this technology company had the following proposals: 

  1. Proforma proposals on directors, appointment of auditors, and advisory vote on compensation 
  2. Proforma European-style proposals on approval of accounts, annual confirmation of authorities, and compensation plans 
  3. Board proposals on equity 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, though the equity does not have restrictions to align director incentives with long-term value creation. The company has no ownership guidelines.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay”  The company does not have a shareholder engagement program that goes beyond the annual advisory vote. The peer group is listed, however there is no disclosure of the criteria or process used to develop the peer group. 
  2. For and against European proforma proposalsUnder US laws and regulations, these matters are handled by the board, thus the topics do not warrant votes by shareholders of US companies. Magni usually votes in support of these topics, unless some controversy or issue has arisen that requires additional investigation or justifies a vote against. With the exception of compensation, nmaterial controversies or issues were identified. The weaknesses in the compensation system (e.g., no ownership requirement for directors, no shareholder engagement beyond legal requirements, opaque peer groupare inconsistent with good governance and need to be fixed. Magni voted against the four director nominees for the Compensation Committee. 
  3. For board proposals. One proposal increased the authorized shares for the equity incentive plan and the other increased the shares for use in restricted share grants. Equity incentive plans are good tools 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.