Proxy Blog

Starbucks Corporation 

February 10, 2020

The annual proxy for this coffee company and coffeehouse chain had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposal on EEO Policy Risk Report 

Magni voted as follows: 

  1. 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, along with ownership guidelines to align interests with shareholders
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against “say-on-pay”  The proxy materials did not disclose a shareholder engagement program or any related activities. The peer group was listed, though without any meaningful criteria. There was no comparison of the company to the peer group. Collectively the absence of shareholder engagement and incomplete disclosures on the peer group keep a very important process opaque. Opaqueness is inconsistent with good governance. 
  2. Against shareholder proposal on EEO Policy Risk Report. The proposal is a repackaging of last year’s proposal about “True Diversity”. It seeks to force political diversity to be part of diversityHowever, the role of a board is to oversee the company for the benefit of shareholders. The board can make the decision as to whether the company is apolitical or political, and if political, what (if any) leaning it may have. Starbucks has been very successful, so whatever political approach Starbucks has used, the approach does not appear to have hurt the company, hence Magni defers to the board.