The annual proxy for this fluid systems company had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
- Shareholder proposal on employee representation on the board
Magni voted as follows:
- 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” – There was no disclosure of any shareholder engagement efforts. The peer group was disclosed, along with vague criteria for determining the participants. There was no benchmarking to show that the company compared to the peer group on the major criteria.
- Against the shareholder proposal on employee representation – Generally, a company should have the latitude to suggest director candidates that best meet its interests. The shareholders then get the opportunity to approve (or reject) those candidates. The company receives a relatively high governance score. At this point, Magni does not see the need to require employee representation on the board.