Copy/paste anti-ESG proposals at Apple and Deere, plus guest Mike Levin on activism in 2025

PROXY COUNTDOWN SCRIPT

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This is Proxy Countdown. Welcome to the big show for the week of February 17, 2025 alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown:

1. Idexx Laboratories is getting rid of its smartest director.

2. Kinsale Capital Group is getting rid of its lowest performing director.

3. Mike Levin discusses “Proxy Activism in 2025” from Free Float’s very own Shareholder Primacy podcast

4. Another vote against a director who skipped a meeting

5. And on the Big Votes, shareholders are getting political at Apple and Deere.

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Trade Wire - BUY/SELL

Top Stories:

1. Dr. Asha Collins, a high performing black director at Idexx Laboratories has stepped down from the board. She had the second highest batting average at .700 and had only served since 2020. Idexx did not state why Dr. Collins, who has a PhD in Cancer Biology and Microbiology, retired other than the normal boilerplate that her “decision to resign was not the result of any disagreement with the Company on any matters relating to the Company’s operations, policies or practices.” 

2. Director Brian Ruder has stepped down from the board of Informatica. Despite the fact there are only two female directors with a total of 9% influence, Informatica immediately appointed another man to the board: Alex Vander Linde, who will serve as a Class III director, meaning shareholders won’t be allowed to have a say on his appointment until the annual meeting of stockholders to be held in 2027

3. Good news at Kinsale Capital Group, where the director with the worst overall performance is stepping down. James Ritchie was hitting .453 overall on a board where all other directors were hitting at least .700. His TSR performance was especially bad, at .266. Overall, the board hits .785 in TSR

4. Palo Alto Networks has appointed 2 new directors: Helle Thorning-Schmidt and Ralph Hamers. They will each receive a golden hello equity grant worth $1M. In addition, Palo Alto directors receive about $400,000 in annual pay. Compensation amounts such as these immediately call into question whether the new directors will be able to provide effective and independent oversight of management.

5. And lastly, at Whirlpool, director John Morikis is replacing board member Larry Spencer. Whirlpool is a big board: 13 total board members but only three women. Instead of making the effort to find a fourth female director in an industry whose primary buyers are other women, Whirlpool opted for the CEO of a company that sells paint. To make matters worse, Whirlpool already has a dude on their board, Rick Kramer, who served on the board of that same paint company (Sherwin-Williams).

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PROXY CAGE MATCH

1. Activism Report

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VOTE RESULTS TABLE 

Here are the highlights from large cap annual meetings over the past week:

1. PTC: blah

2. J&J Snack Foods: blah

3. Simulations Plus

1. 41% NO Dr. Walter S. Woltosz

1. Former CEO, 79, director since 1996, including 28 years as Chair

2. Plus he has an “honorary Doctor of Science” from Auburn and still refers to himself as a Dr.

3. Controls 17% of vote, which means shareholders truly hate this dude

4. Hillenbrand: blah

5. Central Garden & Pet: all about 12% NO except for newly appointed director Randal Lewis (99.9% YES) and Christopher Metz (28% NO) 

1. Metz attended 70% of meetings. I’m not saying we shouldn’t vote out Metz, but can we all agree on another data point which might suggest an under-performing director?

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THE BIG VOTE PICKS

MATT

 Deere

• Meritocracy:

• NO to Mike Johanns

• Former US Senator and US Sec of Ag - general rule?  Vote against politicians.  I get the naked desire to influence current administrations and the value of connections, but if you’re business can’t survive without backdoor politics, investors should be wary.  It’s not an advantage, it means the team sucks

• No core knowledge of manufacturing, no corporate leadership, poor board performer

• NO to Alan Heuberger

• Look, the data says Heuberger, from Cascade, the Gates Foundation asset manager and Free Float client, doesn’t merit the role - his background is Econ and Math, he invests in farmland and production businesses, I get it, but on paper, he didn’t hit on our merit metric.  Sorry Alan, we love you as a client, but I would trade you to a land REIT or pure ag and pull you from Deere’s DEI-killing board

• ABSTAIN from Sherry Smith

• She doesn’t hit the merit metrics - CEO with a network, but weak board performance and no direct knowledge of the industry… BUT, she is the accountant, and everyone needs that accountant. That said, Neil Hunn also got a degree in accounting?  Two accountants, but Smith has 13 years of tenure and Hunn has less than 2

• DEI

• NO on Dmitri Stockton

• DOUBLE DEI rollback to his jacket at Target and Deere, and was a director at Stanley Black and Decker until 2021 (they also rolled back DEI programs, which Stockton would have been on the board to set up)

• Also NO on… the rest of the board?

• White male influence = 61%; white male body count = 50%

• Two people of color, one of whom is Stockton who’s actively rolling back all DEI programs everywhere he goes while Sheila Talton is on the board of the Chicago Urban League, whose mission is to “achieve equity for Black families and communities through social and economic empowerment” - was she the one dissenter?

Apple

• Casual indifference to their own policies

• Apple age cap of 75 years old

• Cap was waived in 2024 for Ron Sugar

• Cap waived again in 2025 for Ron Sugar

• One reason for the waive is “significant recent refreshment in board composition”, they want to keep his institutional knowledge

• Here is the “significant recent refreshment”:

• Wanda Austin added in 2024 at age 70 (capped to 5 year tenure by age cap)

• Austin is connected to 25% of the current board

• Alex Gorsky added in… 2021, connected to HALF the board through other board roles

• Monica Lozana added in… 2021, connected to 38% of the board

• THIS IS BELOW THE ANNUAL AVERAGE BOARD REFRESHMENT RATE - in the last year, the average US board had a 6% refresh rate… in the last 15 years Apple had a 4.7% refresh rate, and in the last 3 years they had… a 4.7% refresh rate

• Meritocracy

• Art Levinson, Alex Gorsky, and Monica Lozano have no real business on this board except that Art’s been there as the only long time Steve Jobs holdover, and Alex and Monica know all the other board members

• Not only do they not hit meritocracy numbers, but Gorsky is busy choosing Jamie Dimon’s replacement on their board, and Lozano is busy rolling back DEI programs at Target

• Somehow, Lozano, who had a career in Hispanic media, is checked as a “environment skill” - with no mention of environment in her bio, and not listed as a skill on Bank of America, one of the other boards she’s on?

NO to Bowyer @ Deere proposal 8

• Filed exempt solicitation looking for report on charitable giving and why it discriminates against against religious giving

• Claims that their policy excludes matching employee gifts to Bible schools or missionary work, but it’s a double standard because the non profit they partner with in Africa occasionally does partner with African churches to distribute farming education

• Goes on to claim Deere is “anti-religious” because there is no employee resource group for religious employees

• Because Deere doesn’t “support” the freedom of philanthropy for religious employees, they can’t be truly diverse

• In their original proposal filing, Bowyer comically mentioned zero - ZERO - of these arguments, and instead focused on how Southern Poverty Law includes religious groups in its Hate Map (Deere doesn’t give to them), how the Human Rights Campaign called for social media to censor hate speech that poses a “threat” to religious freedom (Deere donate to them), rolled back their DEI  (has nothing to do with charitable giving), and demands a report of risks of religious discrimination

DAMION

1. February 25

1. i3 Verticals $1B

1. Greg Daily: CEO, Chair, 23% of voting power: get this guy off the board immediately; he simply has too much power. He also managed to find one woman for a board of 9 and zero women out of 7 named executive officers. I know we;re in MAGA 2.0 but even for MAGA this is shameful.

2. Apple $3.7T

1. Election of Directors: Wanda Austin, Tim Cook, Alex Gorsky, Andrea Jung, Art Levinson, Monica Lozano, Ron Sugar, and Sue Wagner

1. Gender Influence Gap -22%

1. Get rid of Arthur D. Levinson (20%) and Ron Sugar (11%); 25 and 15 years tenure, respectively

2. Say on Pay

1. $74,609,802: 650 to 1 NO

3. SHPs

1. SHP 1 – Report on Ethical AI Data Acquisition and Usage

1. National Legal and Policy Center

2. “Apple has promised not to train its AI models on private information, but the Company is partnered with others that do not share its commitment. For example, Apple recently announced a partnership with OpenAI”

2. SHP 2 – Report on Costs and Benefits of Child Sex Abuse Material-Identifying Software & User Privacy

1. American Family Association, represented by Bowyer Research

2. In early 2024, Apple was named to the National Center on Sexual Exploitation’s ‘Dirty Dozen’ list for the second year in a row, a record of the biggest companies engaged in facilitation and enabling sexual abuse and exploitation through their platforms

1. Apple

2. Cash App

3. CDA Section 230

4. Cloudflare

5. Discord

6. LinkedIn

7. Meta

8. Microsoft's Github

9. Reddit

10. Roblox

11. Spotify

12. Telegram

13. Snapchat

3. SHP 3 – Request to Cease DEI Efforts

1. National Center for Public Policy Research

2. “Apple has a well-established compliance program and the proposal inappropriately attempts to restrict Apple’s ability to manage its own ordinary business operations, people and teams, and business strategies.”

4. SHP 4 – Report on Charitable Giving

1. Wayne Franzten, represented by Inspire Investing, LLC (Leaders in Biblically Responsible Investing)

2. Targets Southern Poverty Law Center 

2. February 26

1. Deere & Company $135B

1. SHPs

1. National Legal and Policy Center: Report on Racial and Gender Hiring Statistics

1. In the year after the death of George Floyd, the S&P 100 added 300,000 jobs. Only 6 percent of them went to white applicants, a statistic that provides prima facie proof of illegal discrimination on the basis of race by these companies, considering whites constitute 76 percent of the American population.

1. These were low-paying jobs of course: “The share of executive, managerial and professional roles held by people of color increased by about 2 percentage points compared with 2020. That still leaves most companies in our dataset lopsided, with White people holding a disproportionate share of high-paying jobs at S&P 100 companies.”

2. They deliberately read the census incorrectly: “White alone, not Hispanic or Latino” is actually 58%

3. And if this is purely a numbers game then clearly they should be focused on managerial numbers

2. As You Sow: Report on Effectiveness of Efforts to Create a Meritocratic Workplace

1. They basically want data proving there was a reason to abruptly abandon its DEI efforts.

3. National Center for Public Policy Research: Corporate Financial Sustainability Report

1. Based on the teachings of “citizen-journalist” Robbie Starbuck this proponent feels like Deere is still too woke.

2. What exactly is a “citizen-journalist”? Could I be a citizen-civil engineer? Or better yet, I want to be a citizen pediatric surgeon.

3. Two Starbuck citations are worth noting:

1. “Customers want to hear [Deere] will no longer participate in [the] Corporate Equality Index score from the Human Rights Campaign.” Really? Deere 400R Dry Spinner Spreader buyers are asking about the Corporate Equality index? Even RuPaul’s woke Gen Z trans assistant is not asking about the Human Rights Campaign’s Corporate Equality index.

2. Starbuck also noted that: “John Deere is now at a 1 year low in stock price” and that the “only company to thrive after [his] reporting is Tractor Supply who did a FULL rejection of woke policies….”

1. Starbuck might be a so-called “citizen-journlaist” but the people at National Center for Public Policy Research are definitely “citizen-liars” because Starbuck was citing Deere’s stock price on August 8, 2024 when it was $347.31 and not literally every single day since that date as Deere’s stock price just went over $500.

4. John Chevedden: Civil Rights Audit.

1. Pretty similar to As You Sow’s

5. Bowyer Research, Inc., on behalf of the American Family Association: Report on Charitable Giving

1. One of Bowyer’s targets is the Southern Poverty Law Center, an organization known for its legal cases against white supremacist groups like the KKK.

DAMION:

That’s the Proxy Countdown for the week of February 17, 2025. Join us next week when we jump back into the Alternative Democracy pool... forever on the lookout for shareholder sharks and wayward directors drinking rancid water.

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