2023-24 PROXY AWARDS, including best performing director, best proxy match, and board you want a beer with

PROXY COUNTDOWN SCRIPT

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This is Proxy Countdown. Welcome to the big show for the week of July 29, 2024  alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown:

1. Boeing makes a decision

2. The Tisch family plays nepo-musical chairs at Loews

3. Howard Schultz is polishing his boomerang at Starbucks

4. An existential crisis at Autodesk

5. And on the Big Vote, our first annual Awards Show Spectacular

TRADE WIRE

Just the highlights

1. Boeing taps aerospace veteran  Robert K. (Kelly) Ortberg to replace Dave Calhoun as CEO

1. He was most recently the Special Advisor to the office of Chair & CEO at United Tech and previously CEO at Collins Aerospace and Rockwell Collins. Showing he’s serious: Ortberg resigned from the board of RTX Corporation

2. Safra Catz stepped down at The Walt Disney Company.

3. Shareholders voted to remove Deepak Raghavan at Manhattan Associates’ 2024 AGM in May: On July 18, 2024, the Board accepted Mr. Raghavan’s resignation. 

4. Barry Diller, Alexis Herman and Marc Bolland all resigned from the board of The Coca-Cola Company.

5. On July 24, 2024, ServiceNow and COO Chirantan “CJ” Desai, came to a mutual agreement that Mr. Desai would resign from all positions with the Company, effective immediately.

1. After an internal investigation prompted by a complaint, the board determined that Desai‘s hiring of the Chief Information Officer of the U.S. Army as the Company’s Head of Global Public Sector in March 2023 violated Company policy.

2. Because Mr. Desai maintains that he did not intentionally violate Company policy, he will receive a severance package including all unpaid salary and bonus and vested equity along with an additional 6 months of salary, annual bonus, and health care premiums. However, Mr. Desai will forfeit all unvested equity awards that had been previously granted to him.

6. And finally, at Loews, the Tisch family generational nepo-handover has begun. James S. Tisch will step down as CEO but stay on as board chair.

1. His brothers Andrew H. Tisch and Jonathan M. Tisch informed the Corporation that they will retire as Co-Chairs but will remain lurking as a director emeritus.

2. Jonathan will also retire as President but remain Executive Chair at subsidiary Loews Hotels.

3. The new CEO will be the James’ son, Benjamin J. Tisch

4. Also, Andrew’s son Alexander will join the board with the new CEO, his first cousin

PROXY CAGE MATCHES

1. Starbucks' ex-CEO Howard Schultz opposes potential settlement with activist investor Elliott Management, after it was reported that Elliott has built a significant stake in Starbucks

2. Activist Investor Nelson Peltz is back at it, this time targeting Solventum. This might be the perfect target for Peltz, who is infamously anti-woke (Re: skeptical about women and people of color), as the Solventum board is 11 members, including 6 women and 2 black men.

1. “Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that? … Why can’t I have Marvels that are both? Why do I need an all-Black cast?”

3. And finally there’s this headline: Too Little, Too Late: Activist Investor Elliott Remains Unimpressed With Southwest’s Plan to Eliminate Open Seating

VOTE RESULTS TABLE 

Large (leagues 3&4)

1. Nothing remarkable at: VF, Advanced Drainage Systems, Booz Allen, Constellation Brands, and Brown-Forman

2. At existential battle at Autodesk, where shareholders passed both ends of the special meeting coin:

1. Management’s proposal which would allow stockholders holding 25% or more of the voting power to call special meetings (PASSED)

2. And a competing shareholder’s proposal to enable stockholders holding 15% or more of the Company’s common stock to call special meetings. (PASSED)

3. Will we just settle on 20%?

AWARDS

Damion:

Top Stories

1. Best new director to trigger the anti-woke: Silvia Davila at FedEx Corporation: according to FedEX’s press release, “Silvia brings vast experience promoting diversity and inclusion and leveraging innovation for ESG agendas”

2. Most famous step down: Sheryl Sandberg at Meta

3. Best new dude! director: The Rock at TKO

4. Best new throwback director hire as result of zero company oversight: Meta appoints John Arnold, a former day trader at Enron who heavily profited as the company was collapsing, and then immediately assigns him to its Audit & Risk Oversight Committee.

5. Best director dance:

1. At Superior Energy Services:

2. First, Julie Robertson resigned

3. Three days later shareholders elected Ian Foster to fill the vacancy created by the resignation of Julie Robertson.

4. Then Timothy Winfrey resigned and shareholders elected Julie Robertson 3 days later to fill the vacancy created by the resignation of Timothy Winfrey.

6. Biggest shock in fair pay practices: Microchip Technology reduced salaries for its CEO, NEOs, and board members by 20% to match other expense reduction actions at the company.

7. Best non-retirement retirement: After less than two years of board service, Jacinto J. Hernandez is stepping down from the board at Altria Group. In connection with his “retirement,” Hernandez will provide strategic advisory services to Altria for a period of five years at an annual consulting fee of $300,000.

8. Best perk for being for a glass cliff ceo being pushed out by an impatient boomerang founder: founder Kevin Plank is back at Under Armour: Stephanie C. Linnartz, who lasted 13 months, will leave with $2.6M cash; a 2024 bonus; full vesting of her remaining sign-on equity worth $7.3M; continued COBRA benefits for 2 years; and the remaining rent on her apartment lease in Baltimore.

9. Best stupid and pointless resignation: Boeing’s “David L. Calhoun “decided” to step down as [CEO] at the end of 2024.”

10. Best pointless fake company moment: Tyson Foods waives retirement age for director Barbara A. Tyson

11. Best double Steven step down because the Stevens are a trust and trusts need busting: Warner Bros. Discovery is losing two directors named Steven: Steven Miron and Steven Newhouse. The Stevens stepped down after the company learned about a Justice Department  investigation into whether their presence on the board violated antitrust law.

12. Best shareholder oversight is a joke moment: Kenneth S. Wilson stepped down as CEO and Director of Jabil following the completion of an internal investigation related to corporate policies. 

1. A Jabil spokesperson said: "In order to respect the privacy and confidentiality of the individuals involved, we will not be speaking about the details of the investigation or the results."

2. Kenny is required to assist Jabil in the event of certain legal proceedings and for violating those policies where he’ll need to be available for “legal proceedings”, Jabil thought it would be nice if he got… $2M cash in quarterly installments of $250,000 and his unvested 2024 equity 

13. Best new CFO named Butch: Jonathan (“Butch”) Oorlog, Jr.: the new CFO at Raymond James Financial

14. Best pointless non-demotion demotion as the result of an internal Audit Committee Investigation: Deborah Clifford transitioned from her previous position as Chief Financial Officer to her new role as Chief Strategy Officer 

15. And finally my favorite top story in 2024 so far happened at Veeva Systems

1. First, on the recommendation of a special subcommittee of the Compensation Committee,, CEO and founder Peter Gassner was granted 2,650,000 premium-priced performance-based stock options outside of the scope of the company’s compensation plan

2. Second, a majority of shareholders voted NO on director Paul Sekrhi but the board’s decision: “to not accept Mr. Sekhri’s resignation was based, in part, on Mr. Sekhri’s extensive … board experience.”

3. Why were shareholders pissed? Because of his “extensive board experience”! In addition to serving at Veeva Systems he also currently serves at:

1. vTv Therapeutics Inc. (2022–present) (Public)

2. Longboard Pharmaceuticals, Inc. (2020–present) (Public)

3. Compugen Ltd. (2017–present) (Public)

4. AdhereTech, Inc. (2024–present)

5. Spring Discovery, Inc. (2021–present)

6. eGenesis, Inc. (2019–present)

Proxy Cage Match-iest:

1. Greatest proxy cage rumble: Disney: Iger vs. Trian (Peltz) vs. Blackwells (who were pro-Iger)

2. Best evil proxy cage rumble: ExxonMobil sued investors Arjuna Capital and the shareholder advocacy group Follow This to kill a proposed shareholder resolution that calls on Exxon to set more aggressive emissions-cutting targets

3. Best boring quote from a proxy cage match filing: “All references to “Proposals 5, 6 and 8” at pages 6, 26, 33 and 35 of the Trian Group’s Proxy Statement are amended and restated as follows: “Proposals 5, 6, 7, 8 and 10”

4. Best full-on we hate you all proxy cage takeover: Ancora Holdings said it had proposed replacing  Norfolk Southern’s top management, including its CEO and COO, and nominated eight directors to the railroad operator's board

5. Best revelation from a proxy cage match: The Strange Case of Dr. Jones and Mr. Jones:

1. Norfolk Southern’s new Safety Committee chair Chris Jones DID NOT have a checkmark next to his name for the “Environmental & Safety” skill in 2023 but has a check next to his name for “Safety” in 2024

2. While Jones’ bio includes no mention of the word “safety” in 2023 and referred to him as “Mr. Jones,” his bio in 2024 suddenly refers to him as “Dr. Jones” seven times and mentions the word “safety” fifteen times, Including 8 times in the first 3 sentences.

6. Best stupid proxy cage match analysis: Reuters reported that ISS backed Nelson Peltz because Nelson “could be additive to the succession process.”

7. Best misogynistic AND racist quote from a proxy cage match: Peltz: “Why do I have to have a Marvel that’s all women? Not that I have anything against women, but why do I have to do that? … Why can’t I have Marvels that are both? Why do I need an all-Black cast?”

8. Best accidental pathway to binding votes at shareholder meetings: In Exxon’s whiney letter to Glass Lewis it said:  “For shareholder democracy to be real, a ‘no’ needs to mean ‘no.’”

Vote-iest

1. Best 2-shares owning boss move: At Polished.com, a proxy contest by a single investor with 2 shares–Jerald Hammann–failed as Jerald’s bid to be added to the board was rejected by shareholders. Hats off to Mr. 2 Shares, however, as he did receive the support of 20% of the vote.

2. Best Say on Pay failure: JetBlue 76%

3. Best smart shareholders: At Jefferies Financial Group, 29% of the vote rejected Say on Pay… and at the same time… the entire Compensation Committee also received more than 20% votes against their election, led by Committee Chair Robert Beyer (26%)

4. Best board that doesn’t care what you think: A majority of shareholders at Liberty Energy said NO to director Ken Babcock: the board, however, “determined that Mr. Babcock’s continued service on the Board is in the best interests of the Company and its stockholders.”

5. Best shareholder proposals of the season: the simple majority vote: lots of wins

6. Stupidest shareholder vote: 77% say yes to Dave Calhoun at Boeing

7. Most surprising shareholder proposal win: At Wingstop, a proposal by The Accountability Board requesting a Greenhouse Gas Emissions Report received the support of 52% of the vote

8. Best example of why analyzing the shareholder democracy is so damn confusing: Despite all the successes with simple majority voting so far in 2024: Only 7% said YES at Thermo Fisher

9. And finally, the Most surprising result of a shareholder vote against directors: resignation (at Kirkland’s 53% NO for Steven J. Collins and R. Wilson Orr, III)

Matt:

DIRECTOR AWARDS

Non Executive Director Award Show

• Best League 1+2 Five Year Director TSR Performance (average influence >10%, 3+ boards)

• Julie Dill

• Sterling Infrastructure (11% influence), Rayonier Advanced Materials (16% influence)

• Hall of Famer

• 3 boards in our database (since 2007)

• .920 TSR over 5 years despite .444 earnings

• DRAFT TARGET!

• Best League 3+4 Five Year Director TSR Performance (average influence >10%, 3+ boards)

• Beth Pritchard

• E.L.F. Beauty (13% influence)

• Hall of Famer

• 3 boards in our database

• .818 TSR, .759 earnings, .946 controversies (at a large cap!), .880 carbon - all round one of the top performers in the entire database of US directors

• Best Director Add by Performance (average influence >10%, 3+ boards, <1 year tenure)

• Susan Mahoney

• Axsome Therapeutics (11% influence), Zymeworks (13% influence)

• All Star

• 3 boards in our database

• .769 TSR, .676 earnings

• Added to Axsome October 2023

• DRAFT TARGET!

• Director that Has Somehow Survived of the Year (influence > 10%, 3+ boards, 7+ year tenure, worst TSR)

• Henry Maier

• Kansas City Southern + Canadian Pacific Kansas City, CH Robinson board member

• Ex CEO of FedEx

• Stellar .026 earnings batting average on boards and .151 TSR - aggregate tenure across all boards in our data of 11 years despite it!  KEEP THOSE VOTES FOR COMING!

• Up and Coming Director to Watch (League 1 or 2, 3+ boards, Hall of Famer or All Star)

• Nneka Rimmer

• Chemical engineer, MBA, pre law, boards of Wellness Pet, Wheel Pros (private), Energizer Holdings (8% influence)

• Ex BCG, McCormick (running global flavors & extracts - thank you for the vanilla)

• All Star, .695 overall average, .768 earnings

• Literally the same or better than approximately 70% of 3+4 directors - so… give her a shot

• Winningest Carbon Performer Added to a Board (added since 1/1/23)

• Stacy Smith (he/him)

• Hall of Famer, added to not one, but TWO boards - Intel and Wolfspeed

• Bats .995 on carbon intensity

BOARD AWARDS

• Most Diverse Board

• Trane Technologies

• 17% asian/black/hispanic/middle eastern women, 19% aggregate influence

• 49.9% female influence

• 58% of board has advanced degrees

• April Miller Boise - who I’ve met! - is DEIiest!  Ignore the fact that she’s smart as fuck, she has 8% influence

• Most Investor Friendly Board (independence)

• Ulta Beauty

• Skills mix

• Democratic board, 64% advanced degrees, 55% women, CEO on the board but NOT chair, high age deviation but average age at 60, 48% female influence

• 58% directors are starters or better performance-wise

• Insider influence overall is 23%

• Board I’m Most Likely to Have a Beer With of the Year

• Knowledge: design, fine art, history

• Lee Enterprises!

• Board includes:

• Journalists

• Poet

• Educator

• Psych major

• Book publisher

• Guy who knows Shari Redstone

• Hoping the “research consultant” and SPAC guy with the accounting degree and Goldman/Deloitte pedigree have to take their kids to water polo the day we go out… 

• Board I’m Most Likely to Feel Dumb Next To of the Year

• Bloom Energy

• 86% advanced degrees on the board

• 16% board influence has Biology knowledge, 15% has engineering, and 13% has physics

• The two STUPIDEST people on the board are the VC guy and the guy from McKinsey

• Most intimidating - Barbara Burger, PhD - she got her doctorate in chemistry at CIT after getting an MBA in finance from Berkeley.

• Board That Still Can’t Find a Woman or Person of Color of the Year

• Skillz Inc.

• 100% white and male!

• Gaming app company 

• CEO with 80% voting power who made himself chair of nominating committee!

• Definitely hiring entirely based on SKILLZ

DAMION:

That’s the Proxy Countdown for the week of July 29, 2024. Join us next time when we jump back into the Alternative Democracy pool... forever on the lookout for shareholder sharks, floating bandaids, and wayward directors.

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