Proxy Blog

Livent Corporation 

April 17, 2019

The annual proxy for this manufacturer of Lithium-based products had the following proposals: 

  • Proforma votes on directors and appointment of auditors. There was no “say-on-pay” advisory vote 

Magni voted as follows: 

  • For proforma proposals.
    -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.
    -Auditors – There appear to be no controversies with the financial statements of the company. 

This company is relatively new as it is a spinoff from a larger company. Magni voted for the proforma proposals despite the lack of a “say-on-pay” vote. The proxy materials regarding compensation did not address shareholder engagement or peer groups. The practice of having board classes with only a portion of the directors standing for reelection is also troubling. The company needs substantial improvements in governance practices over the course of the coming year for Magni to vote for board recommendations in 2020.