The annual proxy for this fast food company had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
- Board proposal to lower the authorized range of directors
- Shareholder proposals on written consent
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.
–Auditors. There appear to be no controversies with the financial statements of the company.
–“Say-on-pay” Advisory Vote. The proxy materials documented shareholder engagement activities, and compensation was part of the discussion. The peer group was listed along with the criteria for the group. Though the criteria were high level, it showed the position of the company within the peer group across the primary financial metrics. The company uses a peer group where it is overall somewhat bigger than a majority of the group. Such information provides reassurance that the compensation comparisons are relevant and more likely to be objective.
- For the board proposal. The current bylaws allow up to 24 members on the board. Such a large board is unwieldy and likely to be bureaucratic.
- Against shareholder proposal. Per the Magni position paper, Magni routinely votes against written consent proposals.