Proxy Blog

Intuitive Surgical, Inc.

April 8, 2019

The annual proxy for this surgical robot corporation had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal to amend the Incentive Award Plan 
  3. Shareholder proposal on simple majority voting 

Magni voted as follows: 

  1. For and against all 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” – The proxy materials did not discuss shareholder engagement efforts. Such activities are an important part of managing the relationship with shareholders and provide important feedback on the appropriateness of compensation, as well as many other issues. 
  2. For the board proposal on the equity plan as the plan is aligned with shareholder interests, the amendments are minor in nature, and having key people within the company focused on value creation is a good governance practice. 
  3. For the shareholder proposal on simply majority voting. Requirements for supermajorities within governance guidelines tend to exist to protect the status of a powerful minority and hence are not consistent with strong shareholder relationships. Occasionally, such requirements are helpful in fending off hostile takeover attempts or can be a useful tactic in optimizing valuations when selling the company. The company identified that only three topics require supermajorities. Compared to other companies where shareholders have unequal voting rights, this situation is more benign and less of a problem. That said, a simple majority is good for holding the board accountable to the shareholders.