Council of Institutional Investors

CII’s Special Focus Companies Hold Annual Meetings in Upcoming Weeks
Thursday, May 7, 2015
by: Matthew Frakes

Section: CII Governance Alert




The six companies that CII targeted last September as part of its 2014 Special Focus Campaign will be holding their annual meetings in the next few weeks.

None of the targeted companies has taken action to address the issues raised in repeated majority-supported shareholder proposals. Each has, for multiple consecutive years, avoided either declassifying their board or adopting a majority vote standard for uncontested director elections or has declined to remove from the board a director who had failed to receive majority support. CII sent letters requesting that boards adopt bylaw amendments to implement majority voting for directors and require an independent board chair where applicable.

Below are the 2015 annual meeting dates for each company and the status of the issues that triggered special attention from CII:

Impax Laboratories: Annual meeting May 12
o Zombie director Nigel Fleming (received less-than-majority support for two consecutive years) remains on the board and is standing for reelection.

Texas Roadhouse: Annual meeting May 21
o Board remains classified (two consecutive years of majority support for a declassify proposal); New York State Common Retirement Fund re-filed its board declassification proposal for 2015.

Vornado Realty Trust: Annual meeting May 21
o Zombie directors David Mandelbaum (received less-than-majority support for two consecutive years), Michael Lynne (received less-than-majority support for one year), and Daniel Tisch (received less-than-majority support for one year) remain on the board.
o Majority voting for directors remains unimplemented (proposals to adopt received majority support for eight consecutive years); no shareholder proposal on the issue was resubmitted for 2015.
o Board remains classified (proposals to declassify received majority support for five consecutive years); no shareholder proposal on the issue was resubmitted for 2015.
o Independent board chair remains unimplemented (proposals on issue received majority support for two consecutive years); Massachusetts Laborers’ Pension Fund filed a proposal on the issue for 2015.

Healthcare Services Group: Annual meeting May 26
o All nine zombie directors (the entire board) remain on the board, including Diane Casey and Dino Ottaviano (received less-than-majority support for two consecutive years).
o Majority voting for directors remains unimplemented (proposals on issue received majority support for three consecutive years); no shareholder proposal on the issue was resubmitted for 2015.
o Independent board chair remains unimplemented (proposals to adopt received majority support for two consecutive years); UAW Retiree Medical Benefits Trust refiled its proposal for 2015.

Nabors Industries: Annual meeting June 2
o Zombie directors John Lombardi (received less-than-majority support for two consecutive years), John Yearwood (received less-than-majority support for two consecutive years), and Michael Linn (received less-than-majority support for one year) remain on the board; Lombardi plans to retire at the end of the 2015 meeting.
o Majority voting for directors remains unimplemented (proposal on issue received majority support for one year); Massachusetts Laborers’ Pension Fund filed a proposal on the issue for 2015.

Netflix: Annual meeting June 9
o Majority voting for directors remains unimplemented (proposals to adopt received majority support for two consecutive years); no shareholder proposal on the issue was resubmitted for 2015.
o Board remains classified (proposals on issue received less-than-majority support for three consecutive years); John Chevedden filed a board declassification proposal for 2015.
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