Proxy Blog

L Brands, Inc. 

May 6, 2019

The annual proxy for this fashion retailer had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder vote regarding eliminating supermajority voting requirements 

Magni voted as follows: 

  1. 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.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against “Say-on-pay”  The company significantly strengthened shareholder engagement and that is good. However, the peer group is custom and the criteria for inclusion is vague, so there is an opportunity for gerrymandering. 
  2. Magni voted for shareholder proposal to eliminate supermajority voting requirements. Strong shareholder relationships mean avoiding governance structures that reduce or eliminate the impact of shareholder votes. Governance structures with supermajority voting requirements are inconsistent with strong shareholder relationships.