The Big Vote at Darden, plus Starboard shakes Southwest, Norfolk Southern’s CEO problem, and a board draft

PROXY COUNTDOWN SCRIPT

<THEME MUSIC>

This is Proxy Countdown. Welcome to the big show for the week of September 9, 2024  alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown:

1. Ancora Holdings finally gets its man at Norfolk Southern

2. The Southwest Airlines board is now up for grabs

3. Darren Woods is now Exxon’s Chief Threatening Officer

4. The only shareholder who agrees with Logitech founder Daniel Bore is Logitech founder Daniel Bore

5. And on the Big Vote, we draft a whole new board for Darden Restaurants

<TRADE WIRE BUMPER>

Trade Wire - BUY/SELL

Top Stories:

1. The Board of Directors of Norfolk Southern terminated CEO Alan Shaw in connection with an ongoing investigation that determined Shaw violated Company policies by engaging in a consensual relationship with the Company’s Chief Legal Officer, Nabanita C. Nag

1. This is their language, by the way, it just says they “terminated Alan Shaw.”

2. And you know they are pissed because he was terminated for “Cause” which means no severance and he can kiss his outstanding equity awards byebye.

3. The Company also announced that Mark George, the current CFO will be the new CEO and will join the Board. I didn't see the interim title anywhere so this sounds serious. For now. 

4. Jason Zampi becomes the acting CFO and Chief Legal Officer Nabanita C. Nag is also gone.

5. So I guess in the end, Ancora Holdings gets its… victory?

2. Expedia Group Vice Chair Peter Kern stepped down, and in a director mic drop moment “the Board eliminated the Board seat previously held by Mr. Kern.” You know you’re good when they take your chair away.

3. Bentley Systems added CEO Nicholas Cumins to the board. My dream of keeping CEOs off all American boards continues to die slowly.

4. Workday has appointed Rhonda Morris as a Class II director to join the board in early 2025. Since the board is classified, she won’t stand for her FIRST election until roughly June of 2026. In the meantime, she will get $750,000 in equity, one-fourth of which will vest even before shareholders have a chance to give their opinion. Why are directors allowed to serve before their first meeting vote?

5. Two companies are joining the modern world and have appointed their THIRD female director: Mary Puma at Entegris and Lisa Campbell at Dynatrace. 

1. Lisa Campbell has also been appointed to the Cybersecurity Committee of the Board despite her long career as a Marketing Executive

6. And finally, here is the entire filing from Sempra: “On September 5, 2024, Bethany J. Mayer resigned as a director of Sempra effective the same day.” Yup, that’s all you need to know, shareholders. 

1. She’s the highest performing director at .665 overall and has only served since 2019

<PROXY CAGE MATCH BUMPER>

PROXY CAGE MATCH

1. After activist investor pressure from Elliott Investment Management, Southwest Airlines agrees to board overhaul.

1. Southwest Airlines executive chair, and former CEO, Gary Kelly (2004/69/21%) has given up and will step down from his role at the company’s 2025 annual meeting.

2. Meanwhile, SIX directors have resigned and will leave the board in November:

1. David W. Biegler (2006/77/3%), J. Veronica Biggins (2011/77/6%), Roy Blunt 2023/77/2%), William H. Cunningham (2000/80/14%), Thomas W. Gilligan (2015/69/7%), and Jill A. Soltau (57/2023/9%)

2. Four new directors will be appointed at that time.

3. Overall: the board is losing 62% total influence, four directors who are about 80 years old, and three directors who have been on board pre-Obama.

2. Activist investor Cevian ups stake in Swiss insurance company Baloise to 9.4%. As a result, Baloise Chair Thomas von Planta said the company is considering changes in its board of directors. "We want to strengthen the insurance expertise on the board." What an incredible concept for an insurance company! He’s not wrong. According to our data, nearly two-thirds of the board’s influence is represented by the following skillsets: Economics and Accounting, Building and Construction, and Mathematics

3. News Corp. investor Starboard Value said it plans to challenge the company’s dual-class share structure that gives control to Rupert Murdoch, and would then transfer it to four of his adult children.

1. The problem is that James, Elisabeth, Prudence and Lachlan Murdoch, the sole chair of News Corp. as well as CEO of Fox, may not agree on how to run the family business, creating uncertainty that “represents a risk to shareholders.”

2. The dual class voting shares allow the family to control News Corp. with a relatively small economic stake.

3. “While we can understand how some could see a benefit to a visionary founder retaining outsized control for a limited duration of time, that potential understanding vanishes as super-voting power and the associated protections transition to others. The four Murdoch siblings with voting rights within the Trust are reported to have widely differing worldviews, which, collectively, could be paralyzing to the strategic direction of the Company; more importantly, we are not sure why their perspectives should carry greater weight than the views of other shareholders.”

4. And lastly, Exxon CEO Darren Woods is now openly threatening activist shareholders thinking to emulate Follow This and Arjuna Capital, who filed a climate-related resolution at the company's annual meeting this year.

1. Exxon sued the investors early this year and Woods is now pre-scolding his shareholders: “We hope we don’t have to use that action in the future. But if we find people continue to abuse the process, we’re going to hold them to the rules."

<VOTE RESULTS BUMPER>

VOTE RESULTS TABLE 

1. The winner of the week is AST SpaceMobile director Christopher Sambar, who is loved by 99.96% shareholders.

2. At Nathan's Famous, 30% of shareholders were against directors Howard Lorber, A.F. Petrocelli

1. Howard Lorber has been Executive Chair since 2007 (with higher total compensation than CEO Eric Gatoff, twice as much in 2023); a director since 1987, and is the company’s largest shareholder with 24% of the voting power.

1. This means that only 50.5% of shareholders supported his reelection to the board. Considering Mr. Lorber’s numerous ties to other directors, this means essentially that a majority of non-board shareholders want him out.

2. A.F. Petrocellis is 80 and has served on the board since Bill Clinton’s first administration.

3. At Gryphon Digital Mining, Jessica Billingsley received nearly a million more votes against her reelection (52% against) but was nonetheless “elected as a Class III director to the Board for a three-year term” because of the company’s plurality voting standard which means effectively that in an uncontested election directors need only one single vote to be reelected.

4. And at Logitech, Daniel Borel, one of three people who founded Logitech in 1981 and who still owns a 1.2% stake, failed in his attempt to oust Chairperson Wendy Becker.

1. 86% of shareholders voted for the re-election of Becker at the company's AGM, against the wishes of Borel who wanted board member Guy Gecht to replace her.

2. Gecht, who said before the meeting that he would not accept the position of chairperson if elected, received support from 14% of shareholders.

<THE BIG VOTE BUMPER>

THE BIG VOTE

Darden Restaurants

AGM Date: September 18, 2024

Documents

2024 Proxy

2023 Proxy

2023 Voting results

2022 Voting results

General Observations

1. Ownership

1. Institutional

1. Capital International Investors 8% & Capital World Investors 14% (22%)

2. Vanguard 12%

3. BlackRock 7%

2. Individual

1. n/a

2. Performance outliers:

1. Overall: .508

1. n/a

2. EBITDA .461

1. Margaret Shan Atkins .232

3. TSR .482

1. n/a

4. Carbon .434

1. Nana Mensah/James Fogarty .121

2.  Juliana Chugg .721

5. Controversies .649

1. n/a

1. Board stuff

1. Committees

1. Audit (a)

2. Nominating and Governance (n)

3. Compensation (c)

4. Finance (f)

2. Skills

1. (Non-Executive DIrectors)

1. Economics and Accounting (24%)

2. Food Production (10%)

3. Administrative (6%)

4. Mechanical (4%)

2. (Executive DIrectors)

3. Diversity Gaps

1. Female Power Gap %/% (+1%)

1. Industry average female influence = %

4. Insider influence: %

1. Industry average %

5. Other

1. Tractor Supply anti-DEI connection: CEO and Chair

Matt:

So the market version of Darden looks like analysts like it despite a history of downward earnings revisions - 61% strong buy or buy, 45% strong - 16 downward EPS revisions, 3 up

It’s a dividend payer, low short float, 19bn cap

Business model is carb and beef delivery system - 93% vertically owned restaurants

• Olive Garden is 44% of restaurants, LongHorn is 27%, Cheddar Scratch is 8%, and Ruth’s Chris is 7% = 86%, the rest is a mix of the same

• Markups are highest at Olive Gardens given cheaper food inputs (mostly pasta and cheese) - but average bill is among the lowest, and low alcohol sales

• Expenses are almost 50/50 food/labor, which means risk is basically food safety and labor issues

• 191,105 team, with 94% hourly

• 58% hourly are female, 56% non white

• Turnover is bananas - of the 180,207 hourly, 137,038 were hired this year - and they disclose that the 80% turnover rate is “one of the lowest rates in the restaurant industry”

• $12/hr (includes tips) minimum, $23/hr was average

• This is nuts - they offer a program called Darden Dimes where hourly employees pay 10c from each paycheck to a fund that is used to help OTHER employees in financial distress because the company doesn’t help them

• Distributed 1.7m of 2.0m fund in 2024 - CEO made 12m

Proposal 1: Election of 12 Directors

Annual Elections for ALL directors? YES

NOMINEES

1. M(aragaret). Shân Atkins 67 f 2014 An 14%

1. Retired Co-Founder and Managing Director, Chetrum Capital LLC

2. Current Public Directorships:

1. SpartanNash Company, a national grocery wholesaler/retailer and distributor of food products to the worldwide U.S. military commissary system, since 2003

3. Prior Public Board Service Within the Past Five Years:   

1. Aurora Cannabis, Inc., one of the world’s largest and leading cannabis companies, from 2019 to 2023

2. SunOpta, Inc., a North American manufacturer of natural and organic food products, from 2014 to 2019

3. LSC Communications, Inc., a leading provider of long and short-run printing services to the book, catalog and magazine publishing industries, from 2016 to 2021

4. Votes Against Last AGM: 2%

1. Ricardo Cardenas 56 m 2022 28%

1. CEO Darden (2022-)

2. Current Public Directorships:

1. Tractor Supply Company, an operator of retail farm and ranch stores, since 2019

3. Prior Public Board Service Within the Past Five Years: None

4. Votes Against Last AGM: 1%

1. Juliana L. Chugg 56 f 2022 aN 3%

1. Retired Chief Brand Officer, Mattel, Inc.

2. Current Public Directorships:

1. VF Corporation, one of the world’s largest apparel, footwear and accessories companies, since 2009

2. MasterBrand Inc., the largest residential cabinet manufacturer in North America, since 2022

3.  Prior Public Board Service Within the Past Five Years:

1. Kontoor Brands, Inc., a global lifestyle apparel company, from 2019 through 2021

2. Caesars Entertainment Corporation, a global leader in gaming and hospitality, from 2018 through 2020

4. Votes Against Last AGM: 2%

1. James P. Fogarty 56 m 2014 fn 6%

1. CEO, FULLBEAUTY Brands, Inc.

2. Current Public Directorships: None

3. Prior Public Board Service Within the Past Five Years:

1. Assertio Therapeutics, Inc. (formerly known as Depomed Inc.), a specialty pharmaceutical company, Chairman of the Board from 2016 to 2020 through its merger with Zyla Life Sciences

4. Votes Against Last AGM: 2%

1. Cynthia T. Jamison 64 f 2014 17%

1. Darden Chair; Retired turnaround CFO

2. Current Public Directorships:

1. The ODP Corporation, parent of Office Depot, Inc., a global supplier of office products and services, since 2013

2. Big Lots, Inc. (Non-Executive Chairman), a discount retailer, since 2015

3. Prior Public Board Service Within the Past Five Years:

1. Tractor Supply Company, an operator of retail farm and ranch stores, from 2002 to 2023

4. Votes Against Last AGM: 2%

1. Nana Mensah 72 m 2016 cF 6%

1. Chair/CEO, ‘XPORTS, Inc.

2. Current Public Directorships: None

3. Prior Public Board Service Within the Past Five Years: None

4. Votes Against Last AGM: 1%

1. William S. Simon 64 m 2014 ac 11%

1. Senior Advisor to KKR & Co.

2. Current Public Directorships:

1. HanesBrands Inc. (Non-Executive Chairman), a global manufacturer of apparel, since 2021

3. Prior Public Board Service Within the Past Five Years:

1. Anixter International, Inc., a global distributor of communication and security products, electrical wire and cable, from 2019 to 2020

2. Chico’s FAS, Inc., an apparel retailer, from 2016 to 2021

3. GameStop Corp., a global video game retailer, from 2020 to 2021

4. Academy Sports and Outdoors, Inc., a premier sports, outdoor and lifestyle retailer, from 2020 to 2021

5. Equity Distribution Acquisition Corp., a special purpose acquisition company, from 2020 to 2022

6. Pitney Bowes Inc., a shipping, mailing, and ecommerce logistics company, from February 2024 to April 2024

4. Votes Against Last AGM: 4%

1. Charles M. Sonsteby 70 m 2014 afn 9%

1. Retired Vice Chairman, The Michaels Companies, Inc.

2. Current Public Directorships:

1. Valvoline, Inc., a producer and distributor of industrial and automotive lubricants and automotive chemicals, since 2016

3.  Prior Public Board Service Within the Past Five Years: None

4. Votes Against Last AGM: 5%

1. Timothy J. Wilmott 66 m 2018 Cf 6%

1. Retired CEO, Penn National Gaming, Inc.

2. Current Public Directorships: None

3. Prior Public Board Service Within the Past Five Years:

1. Penn National Gaming, Inc., from 2014 to 2019

4. Votes Against Last AGM: 1%

Matt:

First of all, why doesn’t Darden do “favorite menu item” for board members in proxy?  Did Starbucks teach you nothing?

But if we’re talking board experience, the first thing that struck me is basically everyone - and I mean everyone - on this board has experience with bankruptcy or is bankrupt adjacent.  It’s a strip mall board.

• Mensah was CEO of Long John Silver’s when it declared bankruptcy

• Chair Jamison is a “turnaround CFO” - on board of Big Lots since 2015, just declared bankruptcy

• Jamison on board of ODP (Office Depot) which is trying to stop existing, has high financial distress rating according to MSCI AGR

• Fogarty was President of Lehman Brothers AFTER bankruptcy declared in 2008

• Fogarty was CEO of Orchard Brands after they declared bankruptcy in 2011

• Fogarty was Chair of the Depomed board when Starboard went after them, they caved and replaced the CEO, rebranded to Assertio, almost went bankrupt and forced to sell themselves

• Simon on GameStop, meme stock craze saved them from bankruptcy

• Simon put on the board of Pitney Bowes for a whopping 2 months as part of activist agreement

• Simon on board of a failed SPAC that liquidated

• Atkins was at Sears until 1999, and was there for the largest ever loss by a retailer in 1992 (3.9bn)

• Cardenas career started at Red Lobster which just filed

• Chugg was exec at Mattel in its decline, was pushed out in the re-org as the company was failing

• VF Corp spinoff is Kontoor, so she also looks like she has more board experience than she does

• Chugg on the board of Caesar’s Entertainment post bankruptcy wrap up

Despite this, investors - well, three investors - have literally rubber stamped the board the last three years

• Capital Group (21% of stock), Vanguard (11%), and Blackrock (8%) - all FOR votes

• Adjusted for those three, there is investor dissent - Sontesby had 88% adjusted FOR votes

So the baseline question for me is, “is this normal for a restaurant company?”

I found the closest possible comp I could and yes, it looks totally normal:

• Bloomin Brands - Outback Steakhouse, italian joint, etc - basically same strip mall food profile

• Board is basically exactly the same - including Bloomin has an ex Darden exec, and about a dozen company overlaps in the board members’ histories (Chicos, Michaels, Walmart, and Starboard has a board seat and just left a board seat at Darden

• Similar failure/failure-adjacent profile - Best Buy, Six Flags (instead of Caesar’s), Staples (instead of Office Depot), Urban Outfitters (instead of Orchard)

Answer appears to be EITHER high beta industries with razor thin line to failure attract ex-failers OR the nature of the business NECESSITATES the failure adjacent as “experts”

Either way, the board, overall, is nothing like what you’d expect from a SP500 company - Darden may be an opp for a massive multi year revamp in how industry manages itself

So here’s what I did - I drafted a whole new board.  I used only Free Float data, no demographic data on the people like age, gender, race.  I leverage the knowledge data and performance metrics the hardest, focused only on existing board members, and laid out a team position profile.

What would ideal look like:

• 1x Food consumption - food + retail, marketing

• 1x Food production - ag, ag services

• 1x Logistics - transportation

• 1x Real estate - largest asset of vertical restaurants/retail

• 1x Labor expert

• 1x Accounting

• 2x Tech

• 1x Super networked

If this were to ever work in the real world, it would need to be treated like athletes - signing bonuses to leave existing boards, title and rank incentives like committee leadership, equity buyouts - the works.  It would even be possible to trade with other company boards - the Darden board has 26 connections to each other through other boards in the last decade through about a dozen companies, which means there is a trade pool out there where the board members are known.  I didn’t leverage that trade pool, but it’s an option.  

My recommendation overall is the board is woefully and historically bad - and that any industry that expects growth over the next 10 years can’t live entirely to avoid bankruptcy, particularly on the backs of employees.  So my ideal positions are my recommendation - you keep Cardenas, Atkins, Sontesby, and Simon for sure this year.  Wilmott is vote AGAINST, there is no need for the skillset, Jamison is vote AGAINST - either you need a turnaround artist and the company is in trouble or you don’t, but her turnaround skills are questionable given she’s been on Big Lots for a decade and they are declaring bankruptcy now.  Fogarty is AGAINST, and Mensah is an abstain to me.

But for the theoretical draft, but I want to stress how possible it is - and here is who I drafted.

First draft:

1. Position: FOOD PRODUCTION

1. Method: Food production + mechanical + NOT economics/finance, large cap, >.500 earnings + tsr, US based

2. Selection: Elisabeth Keller, Murphy Oil board

1. Bio: Ms. Keller served as the President of Inglewood Plantation, LLC and was responsible for the development of strategic vision and oversight of operations for the largest organic farm in Louisiana. She brings to the Board extensive knowledge in health and environmental issues, both domestically and internationally

2. Reasoning: Covers healthy food, production challenges, sustainability trends, on major board so has board experience, local focus

2.  Position: FOOD CONSUMPTION, MARKETING

1. Method: Food production + mechanical + NOT economics/finance, large cap, >.500 earnings + tsr, NON US-based

2. Selection: Debra Crew, Diageo board

1. Bio: Crew began her business career at Kraft Foods in 1997, where she filled a number of management positions. After seven years at Kraft, she moved to Dreyer's, a subsidiary of Nestlé, where she worked from 2004 to 2008, rising to Senior Vice President of Marketing, Frozen Snacks. From 2008 to 2010 she was the General Manager and chief marketing officer of Petcare US, at Mars, Incorporated.[5] Crew joined PepsiCo in April 2010 as president, Western European Region,[5] headquartered in Geneva.[7] In August 2012 she was named to the newly created position of President of Pepsico Americas Beverages, which incorporated responsibility for the North American operations of the Gatorade and Tropicana brands, the Latin America Beverages operation, the North America warehouse sales operation, and the Beverage Growth Ventures Group.[7] In August 2014 she was named president and General Manager of PepsiCo North America Nutrition.[5]  In October 2014 Crew departed PepsiCo to become president and Chief Commercial Officer of the R.J. Reynolds Tobacco Company.[6] She had been a director of the company since December 2013.[5] The switch from the food to cigarette industry surprised observers,[8] as well as the timing, since she had headed PepsiCo's North America Nutrition for only two months.[2] In September 2015 her title changed to president and COO.[9] As COO she oversaw $8.6 billion of the company's estimated $10.7 billion in post-merger sales.[8] On January 1, 2017 Crew became the CEO of Reynolds American, taking over from former CEO Susan Cameron.[10] She is one of the few women CEOs of a major American tobacco company.[11] In April 2019, Crew was appointed a non-executive director to Diageo's board. In July 2020, she replaced Deirdre Mahlan as president of Diageo North America.[3] On July 1, 2023 Crew was appointed CEO of Diageo,[12][13] it is the first time in the company's history to appoint a female CEO.

2. Reasoning: Deep knowledge of vices, particularly food or consumptive vices, US-based work for UK-based company (international exposure), covers marketing and food

3. Position: REAL ESTATE MANAGER or related

1. Method: Engineering + building experience, US company based, >.500 earnings + tsr batting average, large cap

2. Selection: Kirk Hachigian, PACCAR board

1. Bio: KIRK S. HACHIGIAN, age 64, served as executive chairman of JELD-WEN Holding, Inc., a global manufacturer of windows and doors, from 2016 to 2019; and as JELD-WEN’s chairman and chief executive officer from 2014 to 2016. He served as chairman and chief executive officer of Cooper Industries PLC, a global manufacturer of electrical products, from 2005 to 2012. Prior to joining Cooper, Mr. Hachigian was an executive with General Electric Company for eight years, including assignments in Mexico and Asia. He has served as the chairman of Allegion PLC since 2023 and as a director since 2013, including as chair of the corporate governance and nominating committee and previously as lead director. He has served as a director of NextEra Energy Inc. since 2013 and is chair of compensation committee. He has also served as a director of L3Harris Technologies, Inc. since 2023 and as a director of Cabinetworks Group from 2021-2022. He has served as a director of the Company since 2008. Mr. Hachigian has the attributes and qualifications listed in the Company guidelines for board membership including a B.S. degree in mechanical engineering from University of California at Berkeley and an M.B.A. from the University of Pennsylvania’s Wharton School of Business.

3. Reasoning: Engineer, manufacturing core parts of real estate upgrades, supply chain expert (Mexico, Asia), board experience

4. Position: TRANSPORTATION / LOGISTICS

1. Method: Transportation knowledge + ALL performance metrics >.500

2. Selection: George Willis, Vulcan Materials board

1. Bio: Willis held roles of increasing responsibility at UPS, a multinational package delivery and supply chain management company, from 1984 until his retirement in 2020. In his most recent role as President of US Operations, he was responsible for all package delivery services, as well as UPS Airlines, for the world’s largest economy. Furthermore, he was responsible for providing strategic direction for all aspects of delivery and a workforce of 367,000 employees. Willis was also a member of the UPS Executive Leadership Team, which is responsible for long-term strategy and operating execution. From 2015-2018, he served as UPS President, West Region, where he oversaw all package delivery operations in the 25 central and western states in the US. Prior to this, he was UPS President for the UK, Ireland and Nordics Region from 2013-2015, serving as Managing Director for nine countries. Willis was Vice President of US Operations and Senior Vice President of UPS Store Franchise from 2012-2013. In this role he managed The UPS Store® franchise network, with nearly 4,700 locations throughout the US, Puerto Rico and Canada. He also had increased responsibility for strategy and operating execution in the US domestic business unit. Prior to that assignment he served as regional President in Southern California and North Carolina. In those assignments he was responsible for operations, business development and strategy. From 1984-1988 Willis served in the US Marine Corps Reserves, where he managed logistics and just-in-time network for warehousing. He was honorably discharged as a non-commissioned officer. In addition to the Huber Board of Directors, Willis sits on the Board of Directors of Atlas Air Worldwide, Vulcan Materials Company and is a member of the Executive Leadership Council. He is a former member of the Board of Trustees for the National Urban League. Willis attended Morehouse College, as well as the Columbia Executive Education Program and the Yale CEO College Program.

3. Reasoning: Military, international and US logistics, operations expert, pedigreed, board experience

5. Position: LABOR

1. Method: Personnel and human resources knowledge, Therapy knowledge, exposure to unions or low wage workers

2. Selection: Pamela Puryear, Spartannash Company

1. Bio: Pamela S. Puryear, Ph.D. is a business executive with 35 years of global experience in financial services, consulting, healthcare and retail. From 2009 to 2021, Dr. Puryear held several executive leadership roles, including Executive Vice President, Global Chief Human Resources Officer at Walgreens Boots Alliance; Senior Vice President, Chief Human Resources Officer at Zimmer Biomet; Senior Vice President, Chief Talent Officer at Pfizer Inc., and Vice President, Organizational Development and Chief Talent Officer at Hospira Inc. Prior to 2009, Dr. Puryear led an independent organizational development consulting practice for 12 years working globally and across industry sectors, including consumer products, financial services, healthcare, professional services and insurance. Dr. Puryear spent her first 10 years post-MBA in financial services in the real estate investment advisor industry. Dr. Puryear currently serves as an independent director at SpartanNash (NASDAQ), a Fortune 300 wholesale food distributor and retailer, Standard Motor Products Inc. (NYSE), an automotive aftermarket manufacturer and distributor, and Fetch (Private), a Warburg Pincus-backed pet insurance company. Dr. Puryear also served as an independent director of NextGen Healthcare Inc. (NASDAQ), a healthcare technology solutions provider.  Dr. Puryear serves on Audit, Compensation, Nominating and Governance, and Strategy committees, and currently chairs one private and two public company Compensation Committees. Dr. Puryear is a recognized business and human capital thought leader, currently serving as a member of the Advisory Board, Human Capital Center at The Conference Board, a research think tank that delivers business insights to 1,000 public and private organizations in 60 countries. Dr. Puryear was also inducted into the Executive Leadership Council (ELC), the preeminent member organization for Black Executives in 2019, and was named one of the 2021 “Elite 100,” recognizing black female executives changing the face of corporate America. Additionally, in 2023 Dr. Puryear was recognized as a member of the 2023 Most Influential Women Corporate Board Directors by Women Inc. Magazine. Dr. Puryear holds a Ph.D. degree in organizational psychology; an MBA degree from the Harvard Business School; and a BA degree in psychology with a concentration in organizational behavior from Yale University.

2. Reasoning: Currently on a food provider board, deep experience in humans, particularly at companies with unionization risk or unions, deep publicly traded company experience, doctorate

6. Position: FINANCE / ACCOUNTING

1. Method: On an audit committee on a large cap board, background in accounting, zero controversies in board history, zero accounting fails, retail exposure

2. Selection: James Lee, Celsius board, Pepsi Deputy CFO

1. Bio: Mr. Lee is currently Senior Vice President, Corporate Finance for PepsiCo, leading the company’s tax and treasury functions as well as the global SAP transformation program. He was previously Senior Vice President, Chief Strategy and Transformation Officer for PepsiCo Beverages North America (“PBNA”) where he was responsible for leading the PBNA’s long-term strategy, business development, digital and value chain transformation, and sustainability. Mr. Lee joined PepsiCo in 1998 and has held several finance leadership roles since that time, including Senior Vice President for PBNA, Senior Vice President and CFO of the Russia and CIS Region, Vice President and CFO of Southeast Europe, Senior Director and CFO of PepsiCo Australia and New Zealand, and Senior Director, Strategy and Planning of China Beverages. Prior to joining PepsiCo, Mr. Lee worked for the management consultancy, Marakon Associates. Mr. Lee holds a BSE in Operations Research from Princeton University and an MBA from Columbia University. We believe that Mr. Lee’s experience in the beverage industry makes him a valuable member of our Board.

3. Reasoning: Pedigreed, global CFO experience, retail experience, no red flags for accounting in track record

7. Position: TECH

1. Method: Computers and technology knowledge, Engineering knowledge, Mathematics knowledge, Communications and Media knowledge, TSR > .600, US or Canada mid-large cap

2. Selection: Tayloe Stansbury, Coupa board

1. Bio: Currently serving as the Chief Executive Officer of Kaleidescape, Inc., a provider of high-end movie players and servers, Stansbury has more than 35 years experience building scalable technology platforms and organizations across a number of leading companies. He previously served as interim CEO of Watermark Insights, LLC, a provider of software solutions for higher education. Before that, Stansbury also served in various roles at Intuit Inc. including Executive Vice President and Chief Technology Officer. From 2007 to 2009, Stansbury was the Chief Information Officer of VMware Inc., a leading provider of multi-cloud services for all apps, enabling digital innovation with enterprise control. Stansbury also held various roles at Ariba, Inc., including Executive Vice President of Products and Operations. During the past five years, Stansbury served on the board of directors of public companies TCV Acquisition Corp., Coupa Software Incorporated, and Shutterfly, Inc. He also currently serves on the board of directors of private companies Watermark Insights, LLC and Kaleidescape, Inc.

3. Reasoning: CTO background, multiple software types, retail adjacent with displays in vehicles, large cap company exposure

8. Position: TECH

1. Method: Computers and technology knowledge, Food production knowledge, EBITDA > .500, US or Canada large cap

2. Selection: Domitille Bigot, Eurazeo board, Mettler Toledo board

1. Bio: Domitille Doat-Le Bigot has been a director since February 2020. She serves on the Nominating & Corporate Governance Committee. She has a Master's in Business Administration from the ESSEC Business School and the Melbourne Business School. She has been Chief Digital Officer at Eurazeo, since April 2021. She is currently a member of the Board of Directors at Gaztransport & Technigaz (GTT), and of the Advisory Digital Board at Carlsberg Group and until 2020 was a member of its Board. Prior to her current position, Ms. Doat-Le Bigot served as Chief Digital Officer at Danone from 2016 to 2021, and from 2014 to 2016 she served as Deputy General Manager and Head of Technology and Data in Shanghai and Paris at Fred & Farid Group, an international independent digital agency. Prior to 2014 she served in creative management and digital production and design positions at Cisco and Ubisoft Entertainment. Ms. Doat-Le Bigot has extensive professional experience in digital, data, and cybersecurity strategies and transformation, working for a wide range of companies across four continents. We benefit from her subject matter expertise with data-driven, interactive strategies, and her broad international experience.

3. Reasoning: CTO, retail digital experience, food digital experience, cybersecurity, board experience

9. Position: SUPER NETWORKED

1. Method: Highly connected through restaurants/food boards, TSR >.500, EBITDA >.500, All Star

2. Selection: Gerhard Pleuhs, Krispy Kreme board, Panera board

1. Bio: Gerhard Pleuhs has served as a member of the Board of Directors since June 2022. Mr. Pleuhs was the Executive Vice President Corporate and Legal Affairs and General Counsel for MDLZ. In this role, he oversaw MDLZ’s communications, sustainability and public and government affairs teams as well as the legal, corporate secretarial, compliance and security functions. Mr. Pleuhs joined the legal department of Jacobs Kaffee Deutschland GmbH in 1985, prior to its acquisition in 1990 by Altria Group, Inc. (formerly Philip Morris Companies, Inc.). In 2012, Mr. Pleuhs became Kraft Foods Group, Inc.’s (Kraft Foods) Executive Vice President and General Counsel, a role in which he continued for Mondelez International until his retirement in 2021. Mr. Pleuhs holds a law degree from the Christian-Albrechts- University of Kiel, Germany.

3. Reasoning: On top of Krispy Kreme and Panera, prior Peet’s board, Keurig board, Dong Suh Foods board, Mondelez and Kraft exec, only All Star in the method, 20 connections through food board in last 10 years

Notice I put in ZERO demographic data and got:

3 white women, 1 black woman, 1 black guy, 1 asian guy, 3 white guy

Proposal 2: Say on Pay

1. 4% NO in 2023

2. CEO Pay Ratio: 527:1

1. $22,755 median

2. Excluded all non-US workers

3. CEO $12M total for 2024

4. Boring; same old shit

Matt:

Against

Proposal 3: Auditor

1. Nobody cares

2. KPMG 1996

Proposal 4: Omnibus Incentive Plan

1. Increase the number of shares authorized for issuance under the Plan by an additional 2,600,000  shares

Matt:

For

Proposal 5: SHP Requesting the Company Disclose its Broiler Chicken Key Welfare Indicators

1. The Humane Society of the United States

2. From 2019 10-K: “In partnership with our poultry suppliers, we will continue to seek improvements that result in healthy biological function, expression of natural behavior and humane processing,” touts Darden’s website.  It adds that the Company developed a program “to collect and assess Key Welfare Indicators (KWIs) for broiler chickens.”  It says the pilot will begin in FY 24 and “measure performance of outcomes-based KWIs from its suppliers.

3. Darden response: “Darden has collaborated with our Animal Welfare Council, our suppliers and consulting advisors to develop a program to collect and assess Key Welfare Indicators (KWIs) for broiler chickens at harvest facilities. The pilot program will begin in FY24 and measure performance of outcomes-based KWIs from our broiler suppliers. The metrics for the study are based on nationally recognized audit standards and international guidance on welfare indicators.”

Matt:

Against - beef, not chicken!

Proposal 6: SHP Requesting the Company Disclose the Percent of Pork Raised in Group Housing and Establish Targets for Achieving 100% Group Housed Pork

1. Green Century Capital Management as the investment advisory of The Green Century Funds

2. In 2023, Bloomin’ Brands announced a goal for reaching 90% group housed pork globally by 2029.  Wendy’s already uses 100% domestically and in Canada and McDonald’s will reach 100% domestically this year.  Restaurant Brands International is tracking toward 94% globally.  Panera, Shake Shack, The Cheesecake Factory, Jack in the Box, Chipotle, Noodles & Co. and many others already use, or are on track to, 100% group housed pork, too.

3. From 2016 – 2022, Darden publicized a commitment to source gestation crate-free by 2025, but without providing any progress updates.  In 2022, a shareholder proposal asked Darden to finally provide one.  In exchange for a withdrawal of that proposal, Darden published a statement admitting that it would not achieve its 2025 target, but promised to “provide an updated timeline by the end of FY2023” for converting to group housed pork.

1. Yet, FY2023 came and went without Darden publishing any such timeline—and Darden now lacks any measurable targets for ever switching to, or even increasing, group housed pork.

4. Darden: “In 2023, we disclosed that approximately 54% of all pork purchased by Darden was from suppliers with group housing for sows. In 2022, that figure was approximately 33%.  We expect to report our fiscal 2024 progress in our new Darden sustainability Impact Report that we will release on our www.darden.com website in August 2024.  We are committed to updating our progress annually.”

1. “And as evidenced by our reporting, we have been able to make progress without a time-bound commitment.  We do not believe at this time that supply chain conditions exist to allow us to forecast a timeline to be able to source all pork from suppliers using only pork raised in group housing systems.”

Matt:

Against - beef, not pork!

Proposal 7: SHP Requesting the Company comply with WHO Guidelines for Antimicrobials for Food-Producing Animals in the Supply Chain

1. The Shareholder Commons as representative of Mercy Investment Services, Inc.

Matt:

For

Proposal 8: SHP Requesting the Company Issue a Report on if and how it will Reduce Greenhouse Gas Emissions in Alignment with the Paris Agreement's 1.5 Degree Goal

1. SHP requesting that the Company issue greenhouse gas reduction targets by The Sisters of the Order of St. Dominic-Grand Rapids 23% YES in 2023

2. The Sisters of the Order of St. Dominic-Grand Rapids (the “Dominican Sisters”)

Matt:

For

DAMION:

That’s the Proxy Countdown for the week of September 9, 2024. Join us next week 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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