Important highlights from upcoming meetings, provided by Glass Lewis’ global research teamProxSeasInsider 300x200

Liberty Media Corporation
NASDAQ – May 23

Perhaps not a household name, the sprawling media entity largely controlled by billionaire cable magnate John Malone has spread to the world of Formula 1 via its $4.6 billion acquisition of the interantional racing circuit in 2017. However, governance problems from the F1 world are now intermingling with governance problems at Liberty Media, where an aggressive pay structure and loose governance standards have long hung over the highly profitable company. Shareholders must once again tangle with the company’s outsize equity grant to the CEO, who also oversees several other Liberty branded companies; these are just a sample of the unusual corporate structures favored by Mr. Malone. Historically, multiple shareholder rebukes have gone unanswered due to Mr. Malone’s virtual control of the company’s voting power, thanks to a multi-class share structure that features three tracking stocks: the Liberty SirusXM common stock, the Liberty Braves common stock and the Liberty Formula One common stock, each of which is further divided into series A (one vote per share), series B (ten votes per share) and series C (no votes per share) classes. Who owns 96.3% of the B shares? Three guesses, and the first two don’t count.

PNM Resources, Inc.
New York Stock Exchange – May 22

In 2017, PNM Resources very nearly missed joining ExxonMobil, Occidental Petroleum and PPL in receiving majority shareholder support for resolutions asking for enhanced climate change reporting. PNM’s proposal, which received 49.9% support in 2017, is up for a vote again at its upcoming meeting. Since last year, PNM has enhanced its disclosure of its climate-related considerations, including an announcement of its intention to completely divest from coal generation by 2035. The vote on this proposal comes on the heels of significant support for similar measures; a proposal at Noble Energy received 45.7% and a proposal at Kinder Morgan received majority shareholder support. Given the high support for this measure at PNM’s last annual meeting, it will be interesting to see if shareholders view the company’s enhanced disclosure and commitments to sufficiently addresses this request for enhanced climate change reporting.

Bovis Homes Group plc
London Stock Exchange – May 23

As UK companies have adjusted to binding pay regimes, one of the ongoing challenges for remuneration committees is knowing when circumstances warrant deviating from the approved policy, and how. For example, a young executive stepping up as interim chief and steering the company through a difficult period surely deserves something beyond what was envisioned at the start of the year — a salary increase, say, or a discretionary bonus bump, say, or maybe the chance to participate in a one-time award. But all three? In voting on the remuneration report, shareholders at Bovis Homes will have to decide if the committee’s actions (which include stripping shareholders of the opportunity to vote on the one-time award, because… reasons?) were an appropriate use of discretion. They’ll also have to consider the committee’s decision to reset its relative TSR target range, and the terms of a recruitment package for new chief executive Greg Fitzgerald.

Old Republic International Corporation
New York Stock Exchange – May 25

Old Republic International has made a habit of ignoring its shareholders, roughly three quarters of whom have voted in recent years to adopt majority voting and proxy access proposals, and to remove lead director Arnold Steiner. Neither majority voting nor proxy access has been implemented, and Steiner remains in place — but that’s not to say that the board hasn’t taken any action. To the contrary, it’s taken the offensive by extending the terms of a poison pill, protecting its own position while substantially limiting opportunities for corporate takeovers that could deliver shareholders a premium. It’s safe to assume that shareholder opposition will be strong again at this year’s AGM — but with a classified board structure and vote results routinely ignored, will it make any difference?

PayPal Holdings, Inc.
NASDAQ – May 23

PayPal spun off from eBay in 2016 with something shareholders are not accustomed to seeing from the tech sector: good governance. The company features a single class of stock, annual director elections and a highly independent board. But in its third annual meeting as a standalone company, PayPal must contend with shareholder scrutiny in a few evolving areas, including the outside commitments of some of its directors. PayPal’s own president/CEO and its board chair (himself a CEO, at ServiceNow, Inc.) each serve on two additional public company boards. Although executive compensation has not been a big sticking point for PayPal shareholders thus far, this year may warrant a closer look due to a massive one-time equity award to the COO in recognition of his 2016 promotion. PayPal is also one of several hundred companies holding their annual meeting by virtual means only. It’s a contentious practice, though in this case arguably appropriate for an online payment platform.

Chipotle Mexican Grill, Inc.
New York Stock Exchange – May 22

In recent years, Chipotle Mexican Grill’s board of directors has undergone a cleanse. Following several food-borne illness outbreaks in 2015, the company has faced criticism regarding its board of directors’ lack of “freshness”, with investment groups highlighting the board’s substantial average tenure and lack of diversity as contributing to struggling financial performance. In December 2016, the company announced the appointment of four new directors to the board as part of its “Board Refresh Initiative”. After addressing the board issues, the company has focused on changes in executive leadership. In 2017, the company appointed a new chief restaurant officer and chief communications officer, and in 2018, appointed a new chief human resources officer.

Most significantly, in February 2018 Brian Niccol, former CEO of Taco Bell, was appointed Chipotle’s new CEO. Founder and chair Steve Ells, who had served as CEO since 1993, transitioned to the role of executive chair concurrent with Mr. Niccol’s appointment. Mr. Niccol will continue the company’s strategic initiatives and efforts to improve performance, and decrease food safety risks, which appear to be gaining momentum.

OTHER NOTABLE MEETINGS:

  • BP plc (London Stock Exchange – May 21)
  • Merck & Co. (New York Stock Exchange – May 22)
  • PG&E Corporation (New York Stock Exchange – May 22)
  • Royal Dutch Shell plc (London Stock Exchange – May 22)
  • AvalonBay Communities, Inc. (New York Stock Exchange – May 23)
  • BlackRock, Inc. (New York Stock Exchange – May 23)
  • ITT Inc. (New York Stock Exchange – May 23)
  • BNP Paribas (Euronext Paris – May 24)
  • Lloyds Banking Group plc (London Stock Exchange – May 24)
  • McDonald’s Corporation (New York Stock Exchange – May 24)