Anointed director at American Express, plus why caving to Robby Starbuck is bad for business at Harley Davidson

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PROXY COUNTDOWN

Free Float Media, Inc.

60 episodes

3 weeks ago

The silent female retreat The not-so-secret power of the lead independent director An aggressive activist atmosphere is heating up A college professor in a bow tie gets voted out And on the Big Vote, Matt talks Surveys Trade Wire - BUY/SELL Top Stories: proxy countdown_trade wire_2025 - Google Sheets Tracking Noteworthy 8-Ks since September 24th: DIrector comings and goings: Men added: 22 Men subtracted: 7 Women added: 6 Women subtracted: 5 Down to 2F: Fannie Mae: Karin Kimbrough resigned Down to 1F: F&M BANK: Daphyne S. Thomas retired Rocket Companies, Inc. (RKT): Jennifer Gilbert resigned; appointing Mr. Jay Bray to serve as a Class II director and Mr. Tagar Olson to serve as a Class I director Pitney Bowes: Milena Alberti-Perez resigned (Julie Schoenfeld resigned in July) Stupidities/Oddities: IDEXX LABORATORIES INC /DE (IDXX) elected Karen Peacock Ms. Peacock will stand for election by stockholders as a Class I Director at the Company’s 2027 IonQ, Inc. (IONQ, IONQ-WT) appointed John W. Raymond General Raymond was appointed as a Class I director whose term will expire at the Company’s 2028 Annual Meeting of Stockholders Rocket Companies, Inc. (RKT) appointing Mr. Jay Bray to serve as a Class II director until 2028 Mr. Tagar Olson to serve as a Class I director until 2027 F&M BANK CORP: Daphyne S. Thomas: Upon reaching the mandatory retirement age, Ms. Thomas became an honorary director and will continue to function as such until she tenders her resignation to the board or until the board requests that she tender her resignation. Under Section 2.11 of the Bylaws, an honorary director may attend board meetings but is not entitled to vote. NEOs Disney: Sonia L. Coleman, the Company’s Senior Executive Vice President and Chief Human Resources Officer, changed title was to Senior Executive Vice President and Chief People Officer increased Ms. Coleman’s annual base salary to $1,000,000; increased her target annual bonus opportunity to 175% of her base salary; and increased her target long-term equity incentive annual award value to 375% of her base salary CEOs COMCAST CORP: Michael J. Cavanagh will be appointed Co-CEO along with current CEO and Chair Brian Roberts, the son of Comcast founder Ralph Roberts VERIZON COMMUNICATIONS: lead director Daniel H. Schulman succeeding Hans E. Vestberg Money Norfolk Southern: One-time cash retention to all NEOs Mark R. George—$4,000,000; Jason A. Zampi—$2,250,000; John F. Orr—$3,000,000; Claude E. Elkins—$2,000,000; and Anil Bhatt—$2,000,000 Pepsi CFO Golden Hello: $9M Strategy Inc: increase to the annual cap for the security program maintained for Michael J. Saylor, Executive Chairman/former CEO/co-founder, under which the Company covers certain security-related costs. Previously, the annual cap for this program was $1,400,000; effective in calendar year 2025, the cap will be increased to $2,000,000 Dell Technologies: one-time performance-based stock option award to COO Jeffrey Clarke valued at $132.4M CSX CORP: appointed Stephen Angel as CEO; $10.1M golden hello PROXY CAGE MATCH Activist investors launched a record number of new campaigns in Q3, with 61 new campaigns, up sharply from 36 a year earlier. Barclays’ new data show that activism is accelerating globally, with a 90% quarter-on-quarter increase in the U.S. Year-to-date figures indicate nearly 191 campaigns targeting 178 companies, with activists securing 98 board seats and driving approximately 25 CEO departures thus far Japanese game company GungHo Online Entertainment, has rejected a proposal from activist investors to dismiss its longtime CEO Kazuki Morishita The proposal was put forward by Strategic Capital, a Tokyo-based investment fund which controls over 11% of GungHo’s voting rights. During an extraordinary shareholders’ meeting held at its request on September 24, the activist pushed for: 1) the requirements for ousting an executive to be relaxed 2) for Morishita to be fired from his position as CEO. While the first proposal was accepted, the attempt to remove Morishita failed, not gaining enough votes from majority shareholders. Irenic Capital Management, which owns about 2% of Workiva, wants board and governance changes: Specifically, the hedge fund is urging the company to collapse its dual-class share structure, make all board members stand for election every year and add two newcomers, including Irenic executive Krishna Korupolu, to the board. The hedge fund also expressed considerable concern about the company's governance, noting that five of its seven directors have served on the board since 2014. Acadia Healthcare has appointed Todd Young as CFO, amid growing pressure from activist investors Khrom Capital and Engine Capital — which together own more than 8% of the company VOTE RESULTS TABLE Freedom Holding Corp. (FRHC) 0 SHP classified; Philippe Vogeleer 99.2% FEDEX CORP (FDX) 1 SHP: independent board chairman 43% yes 97% yes; Smith 10% NO 37% NO pay PAUL S. WALSH (CHAIR) 94% Silvia Davila 97% Susan Patricia Griffith 98% Amy B. Lane 99.5% Susan C. Schwab 96% GENERAL MILLS INC (GIS) 2 SHP Regenerative Agriculture Practices Within Supply Chain 27% YES Separate the Board Chair and CEO Roles 36% YES avg 97% YES RPM INTERNATIONAL (RPM) 0 SHP 99.7% YES Craig Morford; 9/12 up for election as company in process of declassification CARPENTER TECHNOLOGY CORP (CRS) 0 SHP Classified at John Wiley & Sons: 54% said NO to Governance Committee Chair Brian Hemphill The Board, upon recommendation of the Governance Committee, determined not to accept Mr. Hemphill’s resignation: “The Board concluded that the voting outcome reflected proxy advisory firm recommendations unrelated to Mr. Hemphill's individual performance or contributions. The Board determined that Mr. Hemphill's continued service is in the best interests of the Company and its shareholders” THE BIG VOTE PICKS DAMION Upcoming Meetings September 29- AGM Date Company SHPs # Notes 10/13 MillerKnoll Inc 0 Classified: 3 dirs 10/14 Procter & Gamble 1 As You Sow: Plastic Packaging 23% 10/16 Medtronic 0 Irish 10/16 CACI International 0 no Say on Pay; 3 directors Matt SURVEY SEASON Executives PwC Board Effectiveness Survey - August 2025 All NEOs, ~500 of them Biggest representation in tech/media (23%) Mostly mid (35%) and large (26%) companies Directors PwC Annual Corporate Directors Survey - October 2025 More than 600 directors surveyed Mostly mid cap (33%) and large cap (37%) Mostly men (65%) - and no question about race/ethnicity Mostly longer tenured (6+ years, 56%) Asset Owners Morningstar’s Voice of the Asset Owner Survey 2025 - October 2025 500 asset owners, 19tn in assets Mostly EU and APAC, 20% US Mostly 1-100bn in assets SURVEYS SAY… How important is voting out a director? Executives: 93% of executives say at least one director should be replaced, 78% say 2 or more Directors: 55% think AT LEAST ONE should be replaced, and 7% of directors - nearly 1 in 10 - think MORE THAN TWO directors Investors: 35% said they voted - IN EITHER DIRECTION - at all To put that in perspective, investor voter turnout is roughly equivalent to voter turnout in Syria (37%) Are boards any good? Executives: 35% of executives rate their boards as “excellent” or “good” IT executives think their boards are the WORST - only 21% think they’re effective at all, and 40% think they’re straight up “Poor” Directors: 68% of board Boards think they have an effective assessment process Investors: only 35% of investors said board composition was material AT ALL, much less worrying about how effective those boards were Are we culling directors that suck? Executives: 50% of executives feel confident a board will remove an underperformer Directors: 34% of directors think the chair/lead director is “very effective” in dealing with underperforming directors - the lowest of the options Investors: Only 35% even VOTE, and the average vote for a director is 96% in favor - 0.2% of directors annually are voted out Why aren’t we cutting directors exactly?? Executives: 57% said “Board leadership is unwilling to have difficult conversations with underperforming directors”, while 48% say “Individual director assessments are not performed” This checks out - only 27% of directors said as part of the assessment process, they did individual assessments ACTION ITEM: USE DATA TO DO INDIVIDUAL ASSESSMENTS Directors: The main reason why they haven’t been replaced is “personal relationships with board members” Investors: Only 35% even VOTE, but 52% do vote on shareholder resolutions - maybe if there was a shareholder resolution that said “do a report on individual director assessments, focusing on old, long tenured, underperforming directors”, they might actually approve a report on it since they won’t vote against a human? What makes a sucky director? Executives: advanced age, overboarding, long tenure, and unprepared for meetings When asked what a coaching a board chair should give underperforming directors: 36% say “not actively participating in discussions”, and 33% say dominating discussions Directors: “does not meaningfully contribute to discussions” and “long tenure” Investors: only 14% of asset owners find it “very useful” to do stewardship, which includes voting proxies, and 16% said they “don’t know” if it’s useful - the only time we see votes against consistently is for attendance and overboarding (like SUPER overboarding) What’s the most important issue? Executives: Executives are asking boards to spend more time… on ESG? 50%, the highest overall ask. What keeps them up at night is talent management (18%) Directors: 34% said they plan on adding “industry expertise” - which suggests 1 in 3 boardrooms might have none? Investors: Business ethics remains number 1, and is the TOP RANKED material issue of every issue they asked - 68% of asset owners agreed What do boards need? Executives: 37% said more education Directors: 45% said more education Investors: Not asked because they don’t care Other fun survey tidbits… Only 15% of executives think the board has sufficient gender/racial/ethnic diversity, while… 25% of directors thought they could improve the board by seeking “more diverse viewpoints” Boards think - at a 94% plus rate - their interactions with management were very or somewhat effective, including “developing relationship with management outside of the boardroom” So what do you do with this, investors? Executives WANT YOU TO VOTE OUT DIRECTORS Directors ALSO WANT YOU TO VOTE THEM OUT ACTION: VOTE OUT DIRECTORS - find underperformers, long-tenured or over-aged directors and swap them - only directors care about “collegiality”, executives don’t care because they need diverse viewpoints ACTION: Stop obsessing over shareholder proposals - they don’t matter nearly as much as you think they do investors Directors themselves seem like they don’t have enough expertise on the industry where they’re a director, and investors are worried directors are in it for themselves (ethics) while executives need them to think about exogenous risk (ESG) ACTION: It’s time to marry skills of directors to companies, looking for the exogenous long term risks facing an industry - use data to find them! ACTION: Don’t ask about AI skills on the board, they have to manage ALL exogenous risks over the long term, AI among them - when you myopically focus on just one, you miss the next wave of risk

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Anointed director at American Express, plus why caving to Robby Starbuck is bad for business at Harley Davidson

PROXY COUNTDOWN

38 minutes 41 seconds

6 months ago

Anointed director at American Express, plus why caving to Robby Starbuck is bad for business at Harley Davidson

PROXY COUNTDOWN SCRIPT This is Proxy Countdown. Welcome to the big show for the week of April 21, 2025 alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown: Two new sycophants join Mark Zuckerberg’s expanding board of cronies A whacky 8-k filing fight at a weed company A proxy fight at Harley Davidson hides the good stuff in a redacted resignation letter Much ado about nothing at large cap annual meeting votes And on The Big Vote, Matt gives an early summary of the 2025 proxy season. Trade Wire - BUY/SELL Top Stories: Meta Platforms now has 15 directors: one dictator and 14 listeners. The new directors are Stripe CEO Patrick Collison and Dina Powell McCormick, the former Deputy National Security Advisor to Donald Trump during his first term. Dina is married to Republican Senator Dave McCormick, the former CEO of Bridgewater Associates, one of the world's largest hedge funds. CEO Gavin D.K. Hattersley is stepping down at Molson Coors Beverage Company. The other Named Executive Officers will receive over $6M in retention equity awards NOT to quit, CFO Tracey Joubert will get $4M. Raghib Hussain, President, Products and Technologies of Marvell Technology, is stepping down. But don’t worry: “Marvell has a thoughtful succession planning process and deep bench of talent [and] has activated a plan to ensure Mr. Hussain’s responsibilities are seamlessly transitioned on or before his departure date.” You have until May 2nd, Marvell, get busy. In three moves that don’t really change the dynamic in their respective boardrooms: Joseph Creed is the new CEO at Caterpillar but former CEO Jim Umpleby will stay on as Executive Chair Netflix founder Reed Hastings will transition from Executive Chair to non-executive Chair And at Warner Bros. Discovery, John Malone will transition as a director to Chair Emeritus, meaning he will continue to regularly attend Board meetings and will not vote on Board matters but will tell other directors how to vote with a mean stare. The majority shareholder of the THC Therapeutics voted to remove Founder, CEO, and Chair Brandon Romanek from the Board of Directors. Further, on that same day, the remaining Board of Directors removed Mr. Romanek from any and all positions held at the Company. According to a subsequent filing, the Company requested that Brandon write a letter stating whether or not he agreed with the filing of the termination. Brandon’s response: Hi Scott [Scott Cox, the new CEO] Here is my response. Amend the 8-K “My termination is invalid as you did not follow proper procedure according to THC Therapeutics bylaws” Brandon Romanek PROXY CAGE MATCH Harley-Davidson is fighting a proxy battle initiated by H Partners, its second-largest shareholder, which holds a 9.1% stake in the company. The investment firm “believe[s] CEO and Chairman Jochen Zeitz (2007, 30%), Lead Director Norman Thomas Linebarger (2008, 13%), and long-tenured director Sara Levinson (1996, 20%) “should be held accountable for the destruction of shareholder value." While Zeitz is already making plans to step down, H Partners wants him to go immediately while Zeitz hopes to remain until a successor is in place. The battle began in early April when Jared Dourdeville, a representative from H Partners, resigned from Harley's board, expressing "grave concerns" about the company's direction and leadership. He criticized the board for failing to address declining sales and cultural issues within the company, saying among other things that Harley had “cultural depletion” because of its work-from-home policies. Dourdeville also vaguely referenced Robbie Starbuck’s anti-woke campaign against the company, referring to the company’s response to this incident as “grossly mismanaged.” But since the bulk of his opinion was redacted we can only assume he was upset that Harley-Davidson dropped its DEI policies in response to a hateful moron. But even that we’re not entirely convinced of. While H Partners is not nominating its own slate of contending directors, instead opting for a withhold the vote campaign to oust its 3 targeted directors, there has been a bit of confusion about Harley’s bylaws which have been described in articles covering the battle as “stipulat[ing] that directors who win less than 50% of votes in an election must tender their resignations.” But this is not the whole story: in fact, while the directors must initially tender their resignations, “the reviewing Directors shall accept a tendered resignation unless they determine that there is a compelling reason or reasons to not accept the resignation.” In this case, the directors would only be removed if they “fail to be re-elected at the next election of Directors” at which point their tendered resignation can not be rejected by the remaining directors. Warner Bros. Discovery is expanding its board following pressure from activist shareholder Sessa Capital by adding Anton Levy, who recently stepped down as co-president of private-equity firm General Atlantic. Parkland Corporation and its biggest shareholder, 20% holder Simpson Oil Ltd, have each proposed competing board slates as their dispute heats up ahead of the company’s annual meeting next month. Parkland‘s long-serving CEO Bob Espey says he will step down in a bid to resolve the cage match. Phillips 66 is telling shareholders that activist investor Elliott Investment Management, which wants to break up Phillips and is nominating four of its own directors to the Phillips 66 board, has a conflict of interest because Elliott is also pursuing an acquisition of Citgo, a direct competitor of Phillips 66. Hewlett Packard Enterprise’s board is expected to meet in coming days to discuss whether to replace CEO Antonio Neri, a Hewlett Packard lifer who has run the company since 2018, following a proposal from activist investor Elliott Management to get rid of Neri. VOTE RESULTS TABLE Here are the highlights from annual meetings (25) over the past 3 weeks: The Mehs: M&T Bank Corporation: meh Moody’s Corporation: meh EQT Corporation: meh Dow Inc.: meh Humana: meh The Cooper Companies: meh Owens Corning: meh Schlumberger Limited: meh Bank of New York Mellon Corp: meh Centerpoint Energy: meh Carnival: meh Fifth Third Bancorp: meh Huntington Bancshares: meh Whirlpool: meh The Sherwin-Williams Company: meh The John Cheveddens Concentrix: SHP to give shareholders the ability to call for a special shareholder meeting; John Chevedden; 39% YES Hewlett Packard Enterprise: SHP: "Transparency in Lobbying" John Chevedden: 22% YES Lennar Corporation: SHP1: Independent Board Chairman; John Chevedden; 21% YES Regions Financial Corporation: SHP John Chevedden Simple Majority Vote; no board recommendation; 93% YES Synopsys: SHP; John Chevedden; Shareholder Ratification of Golden Parachutes; 38% YES Texas Instruments: SHP to permit a combined 10% of stockholders to call a special meeting; John Chevedden; 43% YES Director votes that barely matter, other than to me A. O. Corporation: Michael M. Larsen (1 of 3 common stock directors/6 Class A directors) 60% NO: AC chair “Directors are elected by a plurality of the votes cast. This means that the nominees who receive the greatest number of votes cast are elected as directors” Lennar Corporation: Jeffrey Sonnenfeld 24% NO Nominating Chair; served for 20 years SHP1: Independent Board Chairman; John Chevedden; 21% YES co-CEO; one of whom is Exec Chair; LD served since 2015, replacing LD who served since 1997: this is sham governance The normal investor disconnect: Carrier Global Corporation: 15% NO on pay; 4% NO Compensation Committee chair The normal investor apathy: HP: Average director YES over 99%, despite lackluster stock performance THE BIG VOTE PICKS MATT Why you should track individuals, not just companies: Michael Angelakis Roles: Currently on boards of Bowlero, Clarivate, Exxon, and TriNet On private boards of Arcis Golf, Orogen, V Sports Is the CEO/Chair of Atairos, and “investment partner” (holding company) No joke, here are the other tenants at the address: Sandi King Personal Trainer Synergy Sports Massage PJ Mac Pest Control Company “partners” include Arcis Golf, Clarivate, Orogen, Trinet - all places he is on the board Advisor to Executive Committee at Comcast, where he was CFO Worked in PE/VC in Media, was CEO of State Cable TV Corp Longtime media investor Data: Highest influence at Trinet (56%), otherwise in the 8% range Committee heavy driver of influence On 7 boards in our database, 4 current 7 year career batting: .391 TSR, .470 EBITDA, .680 controversies, .804 carbon Core knowledge: Administration, Econ, Math Sits on board of HR, Industrial research, energy, and a bowling alley 548 loops where he’s involved - that’s a LOT, hugely connected 31% of his loops include Ursula Burns, a member of Exxon board 138 are Ken Chenault 124 are Ronald Williams Company loops: AmEx at 559!! Appearances in loops, Partnership for New York at 80, J&J, IBM, Exxon, Boeing, Xerox… all massive blue chip mature US insular companies Problems: Part of the Exxon board that sued a shareholder for a shareholder proposal they didn’t like Exxon mired in longstanding controversies Part of Bowlero board under investigation in class action for age discrimination Blatantly fired workers as soon as they hit fifties/sixties and replace with younger Arcis Golf facing class action for data breach of 10,000 employees Investor class action at Clarivate settled Comcast mired in controversies during his tenure, largely customer service issues Just appointed to the board of American Express NOT INDEPENDENT His biggest connector point is AmEx Added immediately to audit, nom committees - will be adding friends? NO ADDITIONALITY Joins a board with duplicative experience Multiple CFOs/finance backgrounds, more tech with others, even has Ted Leonsis on the board who did media/sports Most of the board MORE qualified than he is on paper - come from bigger companies in high profile roles ONGOING GOVERNANCE ISSUES NOT A CORE STRENGTH American Express to pay $230 million over 'deceitful marketing campaign' LOW PERFORMANCE His performance from other boards would make him second lowest for TSR on AmEx, middle of the pack on others ASK WHY, ASSHOLE Use Jeff Skilling’s incredibly famous gaffe as a baseline question - ask why is he here? What does he add? What do you get? VOTE NO on performance grounds - and follow appointments DAMION April 29 IBM $217B Anti-woke SHP Requesting a Report on Hiring/Recruitment Discrimination; The Heritage Foundation; including this soulless and unchristian quote: “A recent Gallup poll found that only 38% of Americans want businesses to take a stance on current events.” These assholes should be ashamed of themselves CEO Pay Ratio 518:1 CEO/Chair Arvind Krishna 3 of 13 women with no leadership; this board can bite me Stopped DEI a few weeks ago: Employees were told of the changes earlier this week, in a memo that cited “inherent tensions in practicing inclusion.” Discussed changes with a-hole Robbie Starbuck American Express $169B SHP Revisit DEI Goals in Executive Pay Incentives; National Legal and Policy Center SHP Respect Civil Liberties in Advertising Services; Bowyer Research CEO/Chair Stephen J. Squeri 615:1 Pay Ratio Chair of the Compensation Committee is Lynn Pike: “Ms. Pike brings extensive payments and financial industry experience to our Board and has served as the Chair of the Board of American Express National Bank, our U.S. banking subsidiary, since 2019, including as co-Chair with Mr. Squeri from 2021 to 2022. Ms. Pike joined the board of American Express National Bank in 2013 and is a member of American Express National Bank’s Audit Committee and Risk and Compliance Committee.” Citigroup $117B CEO Jane Fraser Pay Ratio 444:1 Anti-woke SHP attacking pro-climate policies from National Center for Public Policy Research Woke SHP from the Sisters on Indigenous Peoples’ rights Wells Fargo $208B Charles Scharf CEO pay Ratio 378:1 Ron Sargen Pay Committee Chair: former CEO at Staples/current interim CEO Kroger -20% gender influence gap; no key board leadership positions 4 woke SHPs April 30 Trump Media $5B MGMT Proposal: Reincorporation from the State of Delaware to the State of Florida Coca-Cola $311B CEO/Chair James Quincey Pay Ratio 1980:1; just get rid of the whole board SHP Regarding Creation of an Improper Influence Board Committee; National Center for Public Policy Research Shareholders request that the Board of Directors create a board-level Improper Influence Committee to assess the extent to which the Company’s decision-making has been improperly influenced, contrary to best practices, by the non-pecuniary policy preferences of directors, executives, or money managers with their own custodial obligations. The Company should issue a public report on the committee’s findings by the end of 2025. “the Company remains committed to DEI despite the fact that recent events have made clear that corporate DEI programs are so anti-American in their neo-racist and neo-Marxist attempts to distribute benefits and impose costs on employees and others on the basis of race that all it takes is for one man with a large following to simply expose a corporation’s DEI program to the public for that company to lose tens of billions of dollars in market cap when its customers boycott in revulsion” SHP Regarding DEI Goals in Executive Pay; National Legal and Policy Center SHP Regarding a Report on Civil Liberties in Advertising Services; Bowyer Research May 1 Boston Scientific $138B CEO/Chair Michael F. Mahoney Pay Ratio 369 to 1 Edward J. Ludwig LD since 2016 (director since 2014); CEO also chair since 2016 -15% gender influence gap (47% for top 2) DAMION: That’s the Proxy Countdown for the week of April 21, 2025. Join us next week when we jump back into the Alternative Democracy pool... forever on the lookout for shareholder shenanigans, dopey directors, and scandalous CEO pay ratios

PROXY COUNTDOWN