Proxy Blog

PG&E

May 3, 2018

The annual proxy for this utility had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Proxy access
    -Approval for charitable giving program 

Magni voted as follows: 

  1. Magni voted for and against the 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. The compensation levels are set using a benchmarking process.
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay” Advisory Vote and related compensation matters – The peer group used for benchmarking purposes was either not provided or well-hidden in the proxy materials.

  2. Magni voted for and against shareholder proposals.
    -For proxy access – Shareholder engagement is an important part of good governance. Proposals on annual proxies are a way for shareholders to make sure the board understands shareholder expectations. Easy access encourages shareholder engagement. The cost of adding shareholder proposals is low. At the same time, the resulting vote count helps the board and management understand the breadth and depth of interest in the topic.
    -Against approval for charitable giving program – The proposal would require shareholder approval of the charitable giving program. Charitable giving is part of maintaining a strong relationship with local communities. It is part of Magni’s best practices. Further, the program should be determined by management. The board should hold management accountable for decisions. If the board is not doing its job, the shareholders should change the board.