Proxy Blog

L3Harris Technologies, Inc.

April 1, 2020

The annual proxy for this defense contractor and information technology services provider had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, executive compensation 
  2. Board proposals on eliminating supermajority voting, anti-greenmail, and cumulative voting 
  3. Shareholder proposal on written consent 

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 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” advisory vote – shareholder engagement program was mentioned, though there were no specifics. The peer group was listed with superficial criteria and no benchmarking of the company against the peer group. 
  2. For board proposals. All three proposals relate to changes made to bylaws in the 1980s when corporate raiding was common. While useful in some circumstances, such provisions have been used by some boards in other companies to ignore shareholder interests. Removing the provisions places additional responsibility on the board to act in the interests of all shareholders when one or more shareholders are disruptive. Magni believes it is better to have stronger relationships between the board and all shareholders, than to have restrictions on the company for hypothetical risks. 
  3. Against shareholder proposal. Per the Magni position paper, Magni routinely votes against written consent proposals.