Proxy Blog

The TJX Companies, Inc.

May 13, 2019

The annual proxy for this off-price discount retailer had the following proposals: 

  1. Proforma proposals on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on compensation disparities, prison labor, and human rights risks 

Magni voted as follows: 

  1. For 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 documented the shareholder engagement efforts, which included the topic of executive compensation. The peer group was listed. Though the criteria were high level, the criteria were logical, and the company is below the 50th percentile among the peer group, hence the compensation benchmarks are less likely to be inflated. 
  2. Against shareholder proposals.
    -Compensation disparities  A nearly identical proposal was submitted last year. The proposal relies on generic data that has been shown to be misleading. The company already provides significant reporting and has filed a report with the government showing same pay for the same work across the genders.
    -Prison labor – A nearly identical proposal was submitted last year. Most of the language is generic. The only material criticism of the company is the claim in the proposal that more supplier audits should be done. The company already has supplier code of conduct and related materials that ban prison labor. While Magni voted against this proposal, future company responses to this proposal should include a better answer on supplier audits.
    -Human rights risks – Similar to the other two shareholder proposals, this proposal has a lot of generic material. The main criticism of the company is the low score the company receives on some assessment in this area. The supporting materials do not explain why the company gets a low score. The company response demonstrates that it has a supplier code of conduct and training programs for suppliers regarding these issues. Magni would vote differently if a shareholder proposal demonstrated specific shortcomings with the company’s policies and/or behavior.