ISS Says Yes on #7

tpltblogger9 Comments

The ability to elect directors is the most important use of the shareholder franchise and all directors should be accountable on an annual basis. A staggered board can entrench management and effectively preclude most takeover bids or proxy contests. Although the board describes the company as being in a period of transition, there is no indication as to how long it expects this period to last, nor is there a “sunset” on the classified board structure. Moreover, this proposal explicitly contemplates a transition period before the board is fully declassified, as the “resolved clause” states that implementation of the proposal would not affect the unexpired terms of directors elected prior to its implementation. If shareholders approve this proposal, as well as a binding management proposal to amend the certificate of incorporation at next year’s annual meeting, the earliest point at which the board could be fully declassified would be the 2024 annual meeting, more than three years after the company’s reorganization was effected in January 2021. Therefore, support for this proposal to declassify the board is warranted.

Big win for shareholders here. This vote will be very close.

Should the board reconsider their recommended vote?

9 thoughts on “ISS Says Yes on #7”

  1. I agree. I worked in proxy solicitation many moons ago and if I remember correctly, majority of institutional investors adhere to ISS recommendations when it comes to voting. I believe Blackrock is an exception as they have their own guidelines ( I may be wrong).

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  2. “Moreover, this proposal explicitly contemplates a transition period before the board is fully declassified, as the “resolved clause” states that implementation of the proposal would not affect the unexpired terms of directors elected prior to its implementation.”

    They were NOT elected! That means the trustees get to stay till 2024.

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  3. Has anyone received digital proxy materials yet? I used Fidelity and my account says “No proxy campaigns open”…just want to make sure I don’t miss my chance to vote.

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  6. @Bdawg and @Pepere42

    I would imagine that everyone will have proper access, regardless of broker, by the end of the week. Seems like each brokerage company just processes these at different speeds.

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  8. This is good to hear but I can’t get over the fact that ISS and whatever other proxy advisory firms will almost guarantee proposals four and five get approved. I wish wall street actually paid attention to some of the things Buffett has written and spoken about. His comments over the years regarding “independent” directors and absurd compensation plans are 100% correct. Being showered with absurd fees and free shares does NOT align anyone’s interests. The fact that these people think it’s acceptable to not even make a token purchase with their own money when joining a board as outsiders with no ownership/connection history is quite shameful. Career corporate directors are just as bad as career politicians if you ask me.

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