Proxy Blog

Snap-On Incorporated 

March 22, 2019

The annual proxy for this manufacturer of high-end tools and equipment had the following proposals: 

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

Magni 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. 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 – The proxy materials did not discuss shareholder engagement. The peer group was disclosed, but the process for selecting the peer group was discussed in very conceptual terms. It is not clear if the peer group was set objectively or if the peer group skewed the analysis of compensation. Both shareholder engagement and peer group benchmarking are important components of corporate governance. This company’s incomplete approach justifies a vote against the proposal.