Proxy Blog

Red Hat

July 8, 2019

The annual proxy for this software company had the following proposals: 

  • Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote 

Magni voted 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”  The proxy materials disclosed a stockholder engagement program, though the specific activities were not disclosedThe peer group was listed, along with the high-level criteria and a comparison of the company to the peer group on relevant metrics. The comparison showed the company as, on average, bigger than the peers. Magni voted in favor of this proposal, though greater transparency about actual engagement activities will be needed to get Magni’s vote in future years.