Proxy Blog

The Allstate Corporation 

May 8, 2019

The annual proxy for this insurance provider had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal on equity incentive plan 
  3. Shareholder proposal on political disclosure 

Magni voted as follows: 

  1. For all 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 document the shareholder engagement programs and clarify that compensation is part of the discussionThe peer group is listed along with vague criteria used to establish the peer group. Normally Magni would vote against such “soft” criteria. In this case, the disclosure of the company’s rank within the peer group on a range of important financial metrics and the confirmation that the peer group is unchanged is sufficient, this year, to enable Magni to vote for the proposal. 
  2. For the board proposal. Long-term incentive plans are a good tool for aligning management of a company with shareholder interests. The amendments to the existing plan are relatively minor and the changes are consistent with good governance. 
  3. Against shareholder proposal. Last year there was a similar proposal on political disclosure. It was generic and did not identify material shortcomings with the behavior of the company. This year’s proposal is primarily an explanation of the shortcomings of the Citizens United case. The proposal would limit participation in industry and trade organizations. These organizations can be important to shareholder interests.