Proxy Blog

Tractor Supply Company

April 5, 2020

The annual proxy for this retailer had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Board proposal to eliminate supermajority 

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 where the equity has restrictions to align director incentives with long-term value creation. 
    -For auditors – There appear to be no controversies with the financial 
    -Against “Say-on-pay” Advisory Vote – The proxy materials did not discuss shareholder engagement. The peer group was disclosed, but the process for selecting the peer group was discussed in very conceptual terms. It is not clear if the peer group was set objectively or if the peer group skewed the analysis of compensation. Both shareholder engagement and peer group benchmarking are important components of good corporate governance. This company’s incomplete approach justifies a vote against the proposal. 
  2. For board proposal on eliminating supermajority voting – Such bylaws are a legacy of the 1980s. A company without supermajority requirements is more responsive to shareholders.