Proxy Blog

Schwab

April 11, 2018

The annual proxy for this bank and brokerage firm had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Lower criteria for proxy access
    -Political and diversity disclosure 

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 for the shareholder proposals.
    -Lower criteria for proxy access – Shareholder engagement is an important part of good governance. Access to proxies for proposals is a way for shareholders to make sure the board understands shareholder expectations. A low threshold encourages shareholder engagement. 
    -Political and diversity disclosure – The proposal requested disclosure of EEO-1 data and political contributions. In both cases the company does not provide any material disclosure regarding diversity or lobbying. The company response in the proxy materials did not provide a compelling reason to vote against the proposal. Transparency is a foundation of good governance.