Proxy Blog


May 8, 2018

The annual proxy for this fast food company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Written consent
    -Plastic straws
    -Political contributions 

Magni voted as follows: 

  1. Magni voted for the 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.
    -“Say-on-pay” Advisory Vote. The proxy materials demonstrated that the board has more than considered shareholder feedback on executive compensation. In addition, the proxy materials disclosed the benchmarking done on executive compensation, including listing the peer group used in the benchmarking.

  2. Magni voted against the shareholder proposals.
    -Written consent – Shareholders making a written consent proposal generally believe the capability would improve responsiveness to shareholders. Magni believes written consent, if enacted by a company, could be used in ways that are counter to shareholder best interests and hence inconsistent with corporate governance best practices. Simply put, written consent potentially provides an opaque process for a limited number of shareholders with a slight majority to make changes. Magni will soon post a research article defining the firm’s position on written consent.
    -Plastic straws – The company has met with the shareholder making the proposal in an attempt to show that no reasonable alternatives exist. The shareholder doesn’t provide alternatives. The company has committed to continued research on non-plastic alternatives.
    -Political contributions – In the supporting statement for the proposal, the shareholder makes clear that the proposal is really about keeping McDonald’s food out of schools. It is important for children to eat nutritious food. Instead of penalizing the shareholders of one fast food company by forcing the company to withdraw from schools, the shareholder should support different school standards to assure food from every source is nutritious.