Proxy Blog

McDermott International, Inc. 

April 15, 2019

The annual proxy for this engineering services company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal to amend the Long-Term Incentive Plan 

Magni voted as follows: 

  1. For all 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. 
    -Auditors – There appear to be no controversies with the financial statements of the company.
    -“Say-on-pay” – The proxy materials contain clear information on shareholder engagement efforts, and those efforts include discussions on compensationThere were two peer groups with logical, but brief information about how the groups were established. The information was sufficiently complete to vote for the proposal, though the company should do more to prove the process for establishing peer groups is objective. 
  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.