The annual proxy for this chemical company had the following proposals:
- Proforma proposals on directors, appointment of auditors, and advisory vote on compensation
- Proforma European-style proposals on auditor remuneration, share transaction prices
- Board proposal on frequency of votes on executive compensation
Magni voted as follows
- For and against proforma proposals:
-Against directors – The board has a majority of independent directors and some have CEO/CFO experience with other companies, though the compensation of directors was either confusing or wrong. Amounts on one page describing the program do not come close to matching the amounts actually paid on the subsequent page. Transparency and high-quality communications are key aspects of good governance. None of the directors deserves reelection.
-For auditors – There appear to be no controversies with the financial statements of the company.
-Against “say-on-pay” – The company does not have a shareholder engagement program that goes beyond the annual advisory vote. The peer group is listed, however there is no disclosure of the criteria or process used to develop the peer group.
- For European proforma proposals. Under US laws and regulations, these matters are handled by the board, thus the topics do not warrant votes by shareholders of US companies. Magni usually votes in support of these topics, unless some controversy or issue has arisen that requires additional investigation or justifies a vote against.
- For board proposal. The board proposal is to have annual votes on executive compensation. Given the significant weaknesses on compensation matters, annual voting is appropriate.