Proxy Blog

Newell

May 8, 2018

The annual proxy for this marketer of consumer and commercial products had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposal on written consent 

Newell has a contested proxy. Starboard is offering a competing slate of candidates. Given the relatively high Magni Corporate Governance score for Newell, Magni is voting the proxy supplied by the board. 

Magni voted as follows: 

  1. Magni voted 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. 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 proposal on 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.