Proxy Blog

Intel

May 3, 2018

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

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Written consent
    -Independent chairman
    -Political contributions requirements 

Magni voted as follows: 

  1. Magni voted for and against the 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. The compensation levels are set using a benchmarking process.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay” Advisory Vote and related compensation matters – The peer group used for benchmarking purposes was either not provided or well-hidden in the proxy materials. 
  2. Magni voted for and against shareholder proposals.
    -Against written consent – Shareholders making a written consent proposal generally believe the capability would improve responsiveness to shareholders. Magni believes written consent, if enacted by a company, could be used in ways that are counter to shareholder best interests and hence inconsistent with corporate governance best practices. Simply put, written consent potentially provides an opaque process for a limited number of shareholders with a slight majority to make changes. Magni will soon post a research article defining the firm’s position on written consent.
    -For independent chairman – An independent board is an important part of good governance. An independent chairman is an element of an independent board, though there are situations where an independent chairman does not make sense (e.g., Elon Musk and Tesla). Intel does not have one of those situations.
    -Against political contribution requirements – Intel already provides significant lobbying disclosure. The shareholder submitting the proposal bases the supporting statement on the Citizens United case. As Intel documents in the company response, Intel does not make any political contributions covered by the Citizens United case.