The annual proxy for this defense contractor had the following proposals:
- Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote
- Shareholder proposals on threshold for written consent and reporting on human rights impacts from use of company products
Magni voted as follows:
- For and against proforma proposals.
–For 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.
-For auditors – There appear to be no controversies with the financial statements of the company.
-Against “say-on-pay” – The proxy lists two peer groups. It is always important for the proxy to disclose benchmarking data for the company against the peer group. It is even more important when multiple peer groups are used for determination of compensation.
- Against the shareholder proposals.
–Threshold for written consent – Per the Magni position paper, Magni routinely votes against these proposals. This company already allows written consent. The shareholder making the proposal wants to lower the threshold from 25% to 3%. Lowering the threshold is a bad idea.
-Reporting on human rights impacts from use of company products – Magni voted against this proposal last year and did so again this year. In summary, the shareholder wants to hold the company accountable for policy decisions of the U.S. government where the shareholder doesn’t support the U.S. government policy. The shareholder instead should pursue a change in U.S. policy.