Activist investor Michael Levin and the editor of The Activist Investor (TAI) - inspired by the Tesla-proposed settlement of Musk’s comp-case to allow a (non-binding) vote on DIRECTOR COMPENSATION has since filed binding bylaw proposals to require shareholder approval of Director pay at 12 companies.
Of the twelve companies, five will include it on the AGM agenda and in the proxy materials: NiSource (NI) AGM on May 13, PayPal (PYP) AGM on May 22 – while Fortiv (FTV), Alphabet (GOOG) and Devon Energy (DVN) indicated they will also include the proposal.
Six other companies sought no-action relief, which the SEC granted, based on a potential technical violation of Delaware law, because the proposals called for directors to not vote their own shares on the matter, a “potential” violation of their civil rights, a Delaware law firm opined, which swayed the SEC, and a detail that Levin will not miss, going forward.
As Levin points out, the idea that Directors should be able to determine their own pay – without any outside scrutiny or regulation - seems like a totally unacceptable idea to most people. We are betting that this new proposal will have very long legs, but time will tell – shortly.
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