Proxy Blog

Texas Instruments Incorporated 

April 8, 2019

The annual proxy for this semiconductor company 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, though there appears to be no long-term holding or ownership requirementsMagni voted for the directors, though a director compensation plan more aligned with shareholder interests would be an important improvement. 
  • For auditors  There appear to be no controversies with the financial statements of the company. 
  • Against “Say-on-pay” Advisory Vote – The company commits to a strong shareholder engagement program yet does not disclosure engagement activities. The company discloses the peer group yet there is minimal explanation for how the peer group was established. Such actions are not consistent with the board representing the shareholders. If the company has good answers (e.g., actual shareholder engagement consistent with the commitment, an objective process for determining a peer group), then the material in the proxy should be strengthened.