Proxy Blog

The Home Depot, Inc. 

May 8, 2020

The annual proxy for this home improvement company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on written consent, EEO-1 disclosure, executive ownership guidelines, and contributions analysis 

Magni voted as follows: 

  1. For and against proforma proposals.
    For directors – The disclosures in the proxy meet the criteria in Magni’s policy on election of directors
    -For auditors – There appear to be no controversies with the financial statements of the company.
    -Against say-on-pay”  The proxy did not disclose a benchmarking of the company against the peer group. 
  2. Against shareholder proposals.
    Written consent – Per the Magni position paper, Magni routinely votes against these proposals.
    -EEO-1 disclosure – Magni has previously voted for and against these types of proposals. The topic of diversity is important. If the shareholder request is generic (i.e., not specific to the company, but rather a proposal to be used with many companies), then the company has latitude to explain its approach to diversity. If the company has a good approach to diversity and provides good diversity statistics, then Magni will usually vote against the proposal. The company has an acceptable, though not desirable track record on diversity. Since it identified specific actions it has taken to improve its diversity program, Magni will vote against this year’s proposal.
    -Executive ownership guidelines – This proposal seeks to require executives to retain more of the shares received in compensation. The company already has ownership guidelines. The proposal fails to document any deficiency in the current program, except that the shareholder wants more shares retained by executives. Magni has already identified higher-priority deficiencies in the company’s executive compensation system.
    -Contributions analysis – The shareholder doesn’t agree with some contributions made by the company. The proposal would force the company to explain the consistency of the contributions with various public statements by the company. The company adequately discloses contributions. That said, there are some inconsistencies. Magni will vote against the proposal this year, though it likely would change its vote in subsequent years if there is no improvement.