Proxy Blog

Union Pacific Corporation 

April 30, 2020

The annual proxy for this railroad company had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on independent chairman and climate assessment report 

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, though there are no disclosure ownership guidelines to align director incentives with long-term value creation. 
    For auditors – There appear to be no controversies with the financial statements of the company.
    Against say-on-pay”  The proxy materials discussed shareholder engagement, though the evidence of actual engagement activities was focused on participation in conferences. Shareholder engagement needs to include existing shareholders. Conferences focus on finding new shareholders. The peer group is listed, but the process for determining the group is vague. The company needs actual shareholder engagement and more transparency in the peer group process. For and against shareholder proposals.  
  2. For independent chairman – Magni wrote a position paper regarding shareholder proposals for independent chairman. 
  3. Against climate assessment report – Climate change is an important topic. The company already provides significant disclosure and receives good ratings from relevant organizations, such as CDP. Further, SMTi rated the company goals for reducing greenhouse gases as in line with the Paris Agreement. This proposal goes too far by asking the company to develop a carbon neutral plan.