Tyson Foods merits votes against, T-Mobile’s new COO’s family gets perks, anti-DEI proposal fails

PROXY COUNTDOWN SCRIPT

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This is Proxy Countdown. Welcome to the big show for the week of January 27, 2025  alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown:

1. The First Woman of Color to Lead a Major U.S. Lender

2. The new COO of T-Mobile is getting pampered

3. A proxy fight is avoided at Pfizer

4. Anti-DEI shareholder proposals continue to fail miserable

5. And on the Big Votes, our top voting recommendations

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Trade Wire - BUY/SELL

Top Stories:

1. Srinivasan Gopalan is the new COO at T-Mobile.  He will receive $2M in cash, a giant pile of unspecified equity, and, in a true waste of shareholder funds, company-paid first-class round-trip airfare for Mr. Gopalan and his spouse and children for 24 months.

2. JPMorgan Chase has raised CEO Jamie Dimon’s compensation for 2024 to $39 million. The 8% pay boost puts Dimon on par with Goldman Sachs CEO David Solomon as the best-paid CEO among the largest U.S. banks. Goldman last week disclosed that it gave Solomon a 26% raise, in addition to a one-time $80 million retention bonus.

3. U.S. Bancorp’s Next CEO to Be First Woman of Color to Lead a Major U.S. Lender. Gunjan Kedia, who was named the bank’s president last May, will take the job in April, succeeding Andy Cecere, who will become executive chairman.

4. MicroStrategy will now grant new directors a golden hello package consisting of $2M in equity. Nothing spells independence like a $2 million handshake.

5. At Fiserv, the golden hello package for new CEO Michael Lyons consists of a replacement equity award valued at roughly $28M and a cash payment of $11,665,108.57. It’s so specific it almost hurts my heart.

6. And finally at Telephone and Data Systems, the controlling Carlson family is playing “now I get to be boss” musical chairs as brother Walter Carson becomes CEO while brother LeRoy Carlson becomes Vice Chair. Walter has been on the board since 1981 and chair since 2002. LeRoy had been CEO since 1986 and a director since 1968. LeRoy and Walter’s sisters, Letitia Carlson and Prudence Carlson also serve on the board but don’t appear to be eligible to make big decisions.

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PROXY CAGE MATCH

1. The only big news here is that nothing happened at Pfizer: activist investor Starboard Value decided not to nominate any directors to the Pfizer board, according to a report from Bloomberg.

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VOTE RESULTS TABLE 

1. Micron Technology: all directors received at least 94% support; Say on Pay on the other hand received 16% against

2. Intuit: all directors received between 92% and 99% support 

3. Jabil: 40% of voters rejected directors John Plant and Steven Raymund

1. Raymund chairs the Nomination Committee on a board with only two women while Plant is the CEO of S&P 500 Howmet Aerospace while also serving on two other boards.

2. Also, nearly 30% reject Pay; hopefully partly due to an embarrassingly high CEO pay ratio of 515:1.

4. Costco: all directors received at least 93% support while the anti-DEI proposal received less than 2% support.

5. Visa: average support for directors was just above 98.5%; an anti-DEI proposal received less than 1% support, while a simple request to remove directors if they fail two straight votes only received the support from 17% of shareholders.

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THE BIG VOTE PICKS

MATT

Director pool

1. 128 directors up for vote this week at the following:

1. DOLBY LABORATORIES, INC.

2. ACCENTURE PUBLIC LIMITED COMPANY

3. ESCO TECHNOLOGIES INC.

4. BEAZER HOMES USA, INC.

5. ENERPAC TOOL GROUP CORP.

6. ATMOS ENERGY CORPORATION

7. EMERSON ELECTRIC CO.

8. Edgewell Personal Care Company

9. FRANKLIN RESOURCES, INC.

10. MOOG INC.

11. ROCKWELL AUTOMATION, INC.

12. TYSON FOODS, INCORPORATED

2. 93 of them have at least three years tenure at at least two boards

3. 71 of them have deep TSR data histories in Free Float database

4. So you’re about to sit down to vote, but let’s take a purely meritocracy look at them and fire the bottom 10% of all of them - 7 people this week who are the worst performers

Performance

1. Pick directors with batting averages less than 400 in TSR at the company

2. Pick directors with batting averages less than 400 across all boards in the last 7 years

3. Sort by the highest influence directors - directors who underperform across multiple years and/or across multiple companies that retain significant influence

Vote out…

1. Kevin McNamara TYSON FOODS, INCORPORATED

1. .251 EBITDA, .335 TSR

2. Dual class family owned no rights

2. Patty Watson ROCKWELL AUTOMATION, INC.

1. .592 EBITDA, .331 TSR - could argue the Rockwell board is doing a horrible job selling the company, virtually all overperform on earnings and underperform on TSR

2. Knowledge: 28% of influence is economic, 16% is building/construction, but sales is only 5%

3. Pam Murphy ROCKWELL AUTOMATION, INC.

1. .697 EBITDA, .357 TSR

4. Gregory Johnson FRANKLIN RESOURCES, INC.

1. .327 EBITDA, .365 TSR

5. Barbara Tyson TYSON FOODS, INCORPORATED

1. .258 EBITDA, .391 TSR

2. Dual class family owned no rights - this is a case where investors have put up with long term controversies, underperformance, and horrible management succession planning that included putting a 30-something in the CFO role only to renege after they had multiple alcohol induced incidences

6. John Tyson TYSON FOODS, INCORPORATED

1. .258 EBITDA, .390 TSR

7. Rupert Johnson FRANKLIN RESOURCES, INC.

1. .327 EBITDA, .373 TSR

2. Nepo baby

This week is unique inasmuch as you have multiple nepo baby companies - for every Meta that gets you lots of TSR that you’ve been happy to give up all your rights, you get a Franklin and Tyson Foods that underperforms and your vote doesn’t matter there either.

Life lesson: divest or vote directors out at other boards.

DAMION

1. Emerson Electric

1. Let me simplify Say on Pay for you: if the CEO Pay Ratio is over 100:1 then just say NO. It's not a binding vote so let’s just send a message. If that’s too scary for you then can we at least agree on this simple threshold: if a CEO makes the average worker pay on the first day of the calendar year then it’s a definite NO vote. At Emerson, this ratio for Surendralal (Lal) Karsanbhai is 426:1. NO.

2. The Gender Gap here (-14%) is ridiculous. Here’s another easy trigger for you: vote NO on at least one male nomination committee member (preferably the chair) if the Gender Gap is at least -10%. In this case, the top 6 most powerful directors are all men (with an aggregate 81% influence!). We only have four choices unfortunately (since this is a classified board; an SHP on declassification next year is a must): lucky for us the Nominating Committee chair is one of our choices: the CEO of the Business Roundtable Joshua Bolten and his 12% influence. Good bye, Josh. Let’s also vote out the CEO (and his 14% influence) to support my belief that there are too many CEOs on boards. The Chair (former Ernst & Young CEO James Turley) is already powerful enough so let him run the show.

2. Rockwell Automation

1. .666 overall; -6% gender gap

2. Only 4 nominees (SHP declassification next year, please): James Keane is “lead independent director” despite 13 years tenure. Vote NO on any “lead independent director with at least 10 years tenure. Promote Pamela Murphy and her .759 average to LD. I already promoted her to Visa board chair so her profile is recently elevated. If she’s too busy then appoint Microsoft Chief Accounting Officer Alica Jolla: a powerful woman of color with only 2 years board tenure

3. CEO Blake Moret 306:1 Pay Ratio: NO according to my 100:1 policy.

3. Tyson Foods: Too many directors and too many Tysons.

1. Pick a Tyson to get rid of: I say John H. Tyson: he’s got too much power anyway as former CEO and current Chair and it was his embarrassing kid (and former CFO) John R. so bye bye John H.

2. Also, get rid of Kevin M. McNamara. He’s been there since 2007 and is rated poorly (.174). It’s enough already.

3. Also, this is an easy SHP to support: “Shareholders request that Tyson Foods disclose the voting results on matters subject to a shareholder vote according to the class of shares, namely differentiating between those shares carrying one voting right and those carrying multiple voting rights.”

4. Say on Pay (see Emerson Electric above): Donnie King 525:1 is a NO.

DAMION:

That’s the Proxy Countdown for the week of January 27, 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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