Transcript
This is Proxy Countdown. Welcome to the big show for the week of July 27th, 2026. Alongside my tag team partner, Matt Muscarty. I'm Damian Rollis on today's countdown. The anti-woke finally got rid of an an an Uncle Herschel hater at Cracker Barrel. I didn't like saying any of that. A hundred billion dollar CEO equity awards have become old news. Wow. The anti DEI crackdown at US boards continues. Shareholders suddenly like governance proposals again. And on the hot on the big vote, Matt looks at CEOs in the hot seat. Is that right? I got that right. All right, I gotta learn how to talk. let's go to our headlines. Yeah, hot seats. first of all, sad news, new carpenter technology CEO and director Brian Malloy passed away just three weeks after he became CEO. The former CEO and chair Tony Thien is coming back to take over again. Is this why they put the former CEO as an executive chair now? Does this justify it? Well no, because actually that's a good question. I don't know that yeah, if if he was the director, maybe Tony had stayed already as the exec no, this is not why. This doesn't happen very often. Cracker Barrel CEO Julie Messino is out after MAGA backlash to Uncle Herschel logo change. At least that's according to one headline. she's getting about five million dollars in severance. Got it. Okay. the new CEO is David Denno, who comes from such illustrious food brands as Burger King, Pizza Hut, Quiznos, Yum Brands, Bloomin' Brands, Outback Steakhouse, Krispy Kreme, et cetera, et cetera. Best Buy and bloomin' brands. Aren't these like not great brands? I th the the the wisdom here I guess is that instead of fixing any of the problems, they're kinda bringing in a an older yeah, an older retired gentleman who's just gonna kinda keep kicking the can down the A guy who looks like Uncle Herschel. okay. That's a strategy. At Copart, CEO Jeff Law is stepping down. former CEO Jay and current executive chair Jay Adair is returning, boomeranging back into the CEO role. See Jeff Law is leaving the board and the company, he's not sticking around. this is a strange board. The board has two chairs. I've never I've never seen this structure before. These aren't vice chairs, these aren't co chairs. The board has a a chair, a regular chair. This is their language. That's the founder Willis Johnson, who controls forty percent of board influence. And they also have an executive chair. that that was Jay Adair, who is now the also the CEO again. He has thirty eight percent of influence. And Jay Adair is the son in law of the chair, Willis Johnson. I've never seen this before. This is craziness. Willis Johnson. Are are you sure they didn't like the it wasn't like a this chair has been donated by Willis Johnson, it's the actual chair? Can't know this. And at Snowflake, the last headline, see CEO performance award award for Sridar Ramaswamy worth up to a hundred bil billion dollars. I mean, it used to be a time when I would see like 20 million dollar equity award and we would be flabbergasted, right? Absolutely flabbergasted. not to mention like A hundred million, five hundred million, one billion. I mean even what one how absurd is one billion dollars for a single C but a hundred and a it's a snowflake of all this isn't like Apple. This is Snowflake. anyway, that's the let's let's stay with money. Let's stay stick with some stupid money stories. So again, I c I looked at we have we've been off for a little while. No, we're skipping all those now, yeah. Mm. Yeah. So I'm looking at eight K filings since the end of June. here's some of the stupid money stories I found. Fascinal has a new CEO, Jeffrey Watts. and they're they're just now appointing him to the board. So he became CEO first and they appointed him to the board. He's gonna receive an annual cash retainer of fifty thousand dollars for his service as a director, which is something that is not done. Yeah, why does he need this? I don't know. Executives don't get extra money for being on the board. And I'm but they do it fast enough. Fr Franklin Resources, a one-time special fifteen million dollar retention equity awards to four named executive officers, including the CEO Jennifer Johnson. Again, like these things used to be such aberrations that they were in the in the governance circles would be considered mind-blowing, like a a s a sudden special. Not usually. fifteen million dollar equity award off the pay polic off the normal pay policy, that people would be shocked. Look, Jeff Sonnenfeld would call you a governista right now. At Archer, I I with pride, with pride, I would like him to call that. Archer Daniels Midland, a $19 million golden hello. and that's not to the CO, to the CEO, that's the COO, Jeff Rowe. So they're getting $20 million now for joining companies. similar story at L3 Harris Technologies, a special one time equity award to three named executive officers, totaling about $25 million for all three of them. And then this other weird one at FedEx, they established a one time special cash bonus pool for all the eligible managing directors and above. And that's that's about eleven hundred people. Included it is, but included that is CEO of Rajesh Subram Subramanium, who's getting two an extra two million dollars in cash. Why why why does he have to be a part? Well that's nice. Why is he in the ma why is he in the extra cash bonus pool? Well that that's exactly how you get your CEO extra cash. That's a that is cash as a cash bonus pool, right? That's straight cash. Right? It's awkward. Yes. Cash. Yeah. Untraceable cash money. we have another story of a of a board director leaping into the C suite. This is like one of my favorite trends of the year. Ulta Beauty Kelly Garcia will transition from a director to chief technology officer. That's a good one. Good transition there, but still. and then I have a bunch of like leadership boondoggle stories. We've we see a lot of these constantly. well not CEO. But but still, yeah. American Health Care REIT CEO Danny Prosky resigns but stays on the board. Jeffrey H didn't resign. Jeffrey Hansen's a new CEO and will continue to serve as chair. So I guess he w went from chair to CEO. And then they have a new lead independent director, Scott Estees, who I guess we'll clean up all this mess. I know it's all of these are confusing. That's the problem. Procter and Gamble. Then didn't resign. He's not he's not resigning. This is very confusing. Executive Chair John Mul Miller is resigning from the board and the company. The CEO becomes the chair. And then they're reappointing the old independent lead director, Joseph Jimenez, to be the new he's boomeranging back. I I have more same thing happened to Entigris basically. I'm not gonna go over the details. Let's move on to this category I call down to two women, which is independent back to leaded dependence. Yeah. Remember that three women used to be the threshold, acceptable threshold for women on the board. Now it's like nobody cares about that anymore. First, I did a I looked at the overall data from all the AK filings. women accounted for 17% of all additions, and yet 21% of all departures. So so only 17% of all additions. Men, on the other hand, accounted for 83% of additions. So The the net gain for men was twenty eight over last month, and and the net gain for women was five. And this is at the biggest companies in America. at paychecks, they're down to two women, Kara Wilson resigning. At Natera, which according to their website, the first sentence dedicated to oncology, women's health, and organ health, right? Women's health, right? Monica Bertagnoli resigned. They have one female director. One. Women's health you're not surprised anymore. I mean, yeah, I I it's hard to be surprised. and then finally, Coles still has two women on the board, but they did something rare, which is that they're they're promoting a director to chair, and it's a woman. You don't see a lot of women in these roles, unfortunately. Wendy Arland becoming chair at Coles. John Schlifsky stepping down, he he of twenty seven percent influence stepping down after fifteen years. So that's a positive leadership change over there at Kohl's. Okay, let's move on to our proxy cage matches. and a bit of a bit of a twist. this is I guess this is surprising news out of the SEC. Activist investors in the US must now disclose the identities of their clients in regulatory filings. I I I everything I read said that no one was expecting this rule change. So they're essentially gonna force hedge funds, activists investors to disclose the financing of the of their activist campaigns and they have to file that in proxies and schedule 13 D's. Now who who's happy about what shouldn't surprise you is who's happy about this. The exactly the companies and man it's really the management themselves. This was like the SEC's throwing a bone to the companies. So I mean I love disclosure, but I don't know, I'm a little bit mixed on this news. Yeah, only companies can be happy about this. Th th this this is I mean, when taken with the fact that you can't do exempt solicitations unless you have three million, you can't like shareholder proposals are now no action. you know, universal proxy card is being used, but you know, there's all sorts of disclosure rules if you're using it that the company doesn't have to do themselves, meaning like the you know, company can nominate a director and give you no reasons for the nomination, but you have to go through paperwork. all of it funnels to the company is no longer run or held or owned by the investors. I mean, the whole point of activist investing is to use your ownership stake in a company w to influence change. This would also mean that for Nelson Pelts's campaign, right? Like no one would have talked about Nelson Pelz. They would have only talked about Ike Pearl Mutter, who was Mm. all the money for that campaign and you dissuade anyone from financing a campaign for change by forcing their names out into the open because that's if you're an investor, the point isn't I'm investing so you know because I want my name associated with change. You're investing because you want the returns along you know this is the point. this is very much in line with what all what Paul Atkins has done. which is empower companies and management of companies to reject everything a shareholder could possibly want. Pro management. Yeah. I was gonna say you say companies, but shareholders are part or used to be kind of a part of that equation, but this is just pro management, really. Nano Nano Dimension and activist invest investor Murchison have come to an agreement. you know, look, I I report on these activists prox these proxy cage matches, but they still do irritate me that it it's only when activists get involved that governance suddenly matters. So at Nano Dimension, the CEO Dave Stellan, board chair, two directors are all resigning. and and look, that might be a positive development. I'm not I'm not suggesting it's not, but it's just it's just it's irritating to me that governance only matters when an activist investor enters the room. Well then they won't enter now because they won't get financed 'cause they have to disclose it. Right. and then th there was a proxy cage match at S at Workspace Group. Sa activist investor Saba was trying to get rid of the entire independent board, which was three men and three women. the Saba owns twenty one percent of shares and their their suggestion was to replace them all with six men, which is a bit awkward, but hey, you know, this is the times, right? but they failed. the all of the the directors at workspace got voted in and notice how again like they honor the majority vote there all all three directors got all six directors got between sixty and sixty eight percent of support but if they had failed the vote would they have actually left the company? I guess they would leave the company in an activist situation, but when Jay Hogue fails the vote, he doesn't leave the company. So again like When activists are watching you, governance happens, rules matter. Well, f in the Saba case too, at Workspace, ISS and Glass Lewis sided with Saba, but picked different directors for different, totally different reasons. And nobody I think nobody knew you know, 'cause everybody steps in, finally does some due diligence and is like, yeah, these directors are not that good and but they disagreed on what was good because they have no real you know, good they no real data behind it. Which muddles which muddles the message, I'm sure. Yeah, of course. Well subjective. Yeah. I I probably would have voted no, just I yes on the directors just because the I don't know, the arrogance of a Sabah coming in and and replacing a board that's fifty percent female with just a bunch of men come on, I mean that this come on, do a better job, Sabah. finally this research out of the College of Charleston, which I thought was interesting, the headline is when shareholder activists attack a company, its rivals may feel the heat The entire board. Yeah. two and change their ways, the the research found that shareholder activism can create a collateral impact, a domino effect in which pressure on one company changes what its competitors are doing. And the research found that when one company changes course in response to activist pressure, its competitors frequently follow suit, even when activists have not targeted them directly. And what I love about this is that this is something that we have spent time with in the past. Like when We spent a lot of t you mentioned Nelson Peltz at Disney. We also spent a lot of time a a at that moment discussing other media companies within the industry, asking ourselves like, Are they a target? What could happen here? So I'm I'm glad that the research backs up that this is actually a real thing. The downside to the research backing that up is two facts happening currently, which is activism is down in twenty twenty six and pretty dramatically. There are fewer activist campaigns this year than there were in the past, which means you're gonna have fewer positive knock on effects for comp corporate change. And number two is the story that you just read, which is it's going to be harder to finance or get financing for activist campaigns, driving down even more. So it's Okay. It's even a little myopic of us to say company management wins because it's not just that company's management that wins. Now what you're looking at industries win, right? Like there aren't as many activists targeting the company means there aren't as many knock on effects, means the industry doesn't change either. Right. let's move over to our vote results table. not a lot of meetings. the proxy season's definitely over. I I only looked at thirty meeting roughly thirty meetings. I refer I referred to this in the in the headlines. So there were three governance shirla proposals, only three. Two of them won. NVIDIA, simple majority voting got eighty seven percent support at Snowflake majority vote for director elections, sixty five percent support. I know it's only a a sample size of three, but how how how did that happen? We we were talking about how nothing was winning anything. W where did this where do these victories come from? Well, the amazing part about these victories is Paul Atkins spent a good amount of capital in his speech targeting John Shveddin, his speech from earlier in the month, how one individual shareholder accounted for forty one percent of proposals and that shareholder won eight percent of them and said that was a bad thing, that one person was monopolizing. But the reality was investors these never win, to your point. And Yeah. the and that they won it all should be actually an amazing thing. Then investors deeply want this. And the things that John Shedvedin puts on the the shareable proposal docket is simple majority voting all the time. It's like his bread and butter. Course. the only thing I left to say is like n NVIDIA had by far the most shared proposals for and they had the only hate the hate proposals, the anti DEI proposals. both just still getting under one percent, routinely under one percent. So whatever. Not big news. Sampa we have a we have a rejection at snowflakes, fifty six percent said no. Yeah, of course. yeah. Yes, the hundred billion dollar now this is the same c what makes it worse, they seventy percent said no last year. I the this seventy percent said no in twenty twenty five, and these fools thr are trying to throw a hundred billion dollar pay package at their CEO. I I the the thing that bothers me is that the The snowflake, the hundred billion dollar snowflake, yeah. Yeah. They don't want to pay this guy. Fir first of what bothers me at Snowflake is they a classified board. I hate classified boards. I cannot believe there's still classified boards. But no one none of these voters got direct got voted out. I mean that there were there was a lot of dissent. There was about an average of 30% no, which is extremely high, right? But that that this board is is messing around with pay so much and that you keep voting it down, how are you not just voting out directors at this point? I don't I I don't know. I mean Seventy se fifty sp six percent and seventy percent last year had the will to say no to the company, but they can't say no to the directors? I I don't I don't understand. Do you know when that when was that vote? Yeah. Do you know when that was? The snowflake vote within the last you know, within the last month, 'cause it was since the end of June. I mean, because the vote happened, right? It was on July fifteenth that the compensation committee at Snowflake granted the performance based stock to the CEO, which means the proxy comes out in for a July vote. It comes out in what? May at their you know, like it's it's roughly two months before three three months. Proxy came out May eighteenth and the meet the meeting was June thirtieth. Which means two weeks after they voted no to his pay, again, they gave him pay. They just granted him it's insane. Again, again. Crazy. They h th this entire board needs to be fired. but yet investors don't make that connection. the only other thing I'll mention is as you okay, I don't know if this is a trend. I don't remember this in previous years, but where you do see regular dissent now against directors is on the boards where the board is classified. I I found Yeah. Seven cases just this just this for this show, and that's roughly twenty five percent of all the meetings, where there was actual dissent against no no one was voted out, but still a very high dissent 'cause usually so I I yeah, I don't I I guess it it that's their secret way of saying they hate the classified board structure. Is it? I don't know. Yeah, your your high votes against, yeah. And the w the the the problem is they wait until the board is classified and generally plurality voting is in place before they register their dissent. So it's like your dissent doesn't matter at that point, right? Like because if the board rejects if it's a classified board and the board sa and you vote and you happen to vote someone out and they reject the resignation of that person, they're there for three years. They're they're they're they're not going anywhere. You can't do anything about it. You have no vote. So Three year zombie. Yeah. That's good zombie power, yeah. It's like it's like amazing that investors are okay with ever investing in some of these companies. And then finally, you'll be happy to know that the shareholders at Dell approved their Dexit, their their Tex, their Texit, Dexit. You'll be shocked to to know that 97% of shareholders at Dell are happy with Michael Dell moving the his Trump loving ship over there to Texas. Yeah, shocking. All right. Upcoming annual meetings. I don't know. Nothing. I don't know. There's not much. The only one I highlighted was Mike. Yeah, yeah. God, that that is shocking, yeah. It's quiet now. Was microchip technology coming up in a few weeks? Cause I feel like they're in the news a lot, right? Microchip? I don't know. I couldn't highlight anything here. There's nothing going on. So let's go to the big vote. What do you got? Yeah, it's pretty quiet. It's quiet. All right, first before I get to the bigfoot, before I talk about CEO hot seats, I have two questions that I need to ask you. the the first question is so I got a call from Georgeson, who's the proxy solicitor, and they do a lot of like content, they do a lot of work with activists. They're they're actually like, you know, they're kind of like the people behind, you know, votes and campaigns and stuff that you don't really know exist. They called me because I no. Thought I was done. Okay. They sound like fabulous people. I own a company called Universal Safety Products. I own the stock in the company. And I bought it because I like, you know, what all they make is like, you know, you know, when you like have a plug in the wall and it's near water and it's got the automatic like circuit breaker thing in it, you know, like the DFI switch. Yeah, light switches and like they it's it's household safety products. Well a guy named Milt Alton w bought a whole bunch of the stock. No, I don't. But I'm gonna pretend I do, yeah. Okay. And is trying to turn it into basically like a Bitcoin repository or some s like it's it's so dumb. I c it's it's so dumb that it like s hurts my brain. But they didn't say this in the f in the filings, but I got this call from George that said, You haven't voted yet. And I voted by now, but I got this call from them that said, You haven't voted yet, are you how are you gonna vote? And it was interesting. Ugh. You mean money laundering. Can we just call it money laundering? Wait, is this r is this what they do to everyone or they knew y someone knew you? So it they only do it when the company hires Georgeson to go out and solicit the votes to get people to vote. And they do that because they've got a vote there that they know if retail doesn't vote, it could lose, right? The vote that they wanted me to vote on, and this is the question for you Universal Safety Products is adding class B shares with 10 votes per share. Solicit. Interesting. Right. Mm-hmm. Stop it. Look, I I g I at least give them credit for asking shareholder permission. It's a one share, one vote company. but have you ever heard of a company adding class B shares and and then saying with nothing about who they're going to give them to? They said it's at their dis they didn't tell me. They said it was at their discretion to hand out the class B shares. They needed a yes vote on actually issuing new shares and issuing Class B shares. Also on the ballot, because they needed this, was eliminating a supermajority vote because Very rarely. Yeah. they don't tell you. Course. Of course. They have to eliminate the supermajority vote first, then get the shares issued, then get the class B issued. And then by issuing the Class B, they've allowed a supermajority vote effectively, just by a bunch of people who own the Class B. I have never, I have never in my life in governance seen anything like it. God. This is why they're paying this is why they're paying for solicitation, obviously. I assume that you said that you were gonna just vote yes for everything that management wants, right? So that was well, th my my question is is how common in this? Because my my response to Georgeson was like, I'm voting no against everything management wants except the supermajority vote. Let's get rid of that so that I can vote out every director or vote against every amendment, without a supermajority, right? Like so that was the only one I voted yes on. But have you ever heard of that? To No, I mean, again, I give them credit for asking their shareholders, but it is like yeah, you're like can we will you help us develop a mechanism that screws you? Yeah, could so investors listening to this show, if you own universal safety products shares, tell MILT to get off get out of here. Like I I don't want crypto or DeFi or Bitcoin or any any of these stupid th I don't want an AI light socket. I just want light sockets. And number two, n why on earth Would any investor give up their rights and add Class B shares? To who? Like who's like this is like I guess they're they're chasing like higher share prices and dividends. I d you know, they're chasing cash. All right, go co keep going. All right. So the second question I have is about Trump media, which I've been obsessed with. Not Trump Media the company, but the fact that I haven't read a single story that Trump Media, a publicly traded company, has not had an annual general meeting since April of 2025. I Yeah. Wow. Have so have they even put out a proxy? This is you know the last you I I I know you know the answer to this, but who remember who the last company that did this that fooled around with it was Musk. Absolutely Elon Musk. They're not playing by the rules. No proxy, no adjournment, no filing. Yeah, it was Musk. Like but where is the single media? Where is the single conversation piece from investors? Why have I not read one thing? Shut it down. Well have they even Well, I I don't I I don't cover these like I used to, but back in the day I remember that they sent out like delisting notices, right? Like warnings. Did they still do that? I mean, shouldn't this be a shouldn't this be a reason why if you don't rectify this you could be delisted? I mean I get That's what I th I thought, yes. I thought that was the thing. And the I know they will never delist Trump media because of Trump, but I it doesn't it seem like the kind of thing that there would be a single story about? Where is the you know, even yeah, like why isn't Mother Jones writing like you know, Trump doesn't even follow the rules of the market, right? Like they don't they like where is anything I'm gonna check. Even even from the left wing press I would expect like them to be like, Hey, play by the rules. To suggest that, you know, like this is not okay. Even MSCI has them at a B rating, not even a triple C for ESG ratings. Like their their governance is only the 22nd, you know, percentile for for the not even in the like the the worst. And it's Donald Trump's kid, everybody from his cabinet, he has dual class shares, and they haven't had an annual general meeting. I'm I'm just flabbergasted. Yeah. Haven't had general meeting and and in the i since the last meeting they fired their CEO, right? The former Congressman Devin Nunes, yeah. Yeah, he'd step down. He stepped down. All right, so y you have no real answers for me except for th both of our unusual, and no one seems to care. Let's talk about CEOs in the hot seat. Are you ready? All right. look, this is gonna be really simple, really hopefully really short. Because we do talk all the time in about in sports about a CEO in the hot seat for losing games and basically bad play calls and should they get fired. That is like Let's do it. Yeah, I'm ready. The permanent conversation. If you want it, you don't have to go that far. You can go back to the World Cup a month ago and talk about Tuchel, the the manager of the England soccer team, who had a basically catastrophic meltdown in their semifinal game against Argentina. It cost them a trip to their final because all they did was put in defenders and just sat around and hoped that nothing went in. And Argentina sh ticks shot after shot after shot and it poked. Yeah. I remember that game. It's subbed in defenders, yeah. It was glorious. I enjoyed that game. Yeah. No. No. It was a it was an amazing game, but not if you're an England fan, right? that coach was immediately on the hot seat after that, obviously. I love it. I love hot seats. The th yeah, the two big sports hot seats are coaches, managers, and then the big one for me at least in baseball is closers. The the guys who come in at the end to s 'cause they're that's always like a do we trust this guy? Is he gonna lose his job? D yeah. Yep, yep. Yeah. Yeah. Do we how do we feel about They're we're gonna get traded, they're gonna get sent down to the miners. but there is no criteria for what a CEO in the hot seat looks like, except, you know, the stock is way down and has been down, and no one actually talks about it like much other than that. But what I realized is we could set out the criteria. We have all the data, we have the technology today. So here's the criteria I set out. Tell me where I'm right and wrong first, and then I'll tell you how many companies and just a couple notable ones. Number one, the obviously it can't be dual class or a founder board, right? Like there's no hot seats for a founder. Founders, they might might be in the hot seat. I don't know if I agree with this because whether it matters, I don't know, but but I I'm always interested in the shelf life of these tech bros, like the the Bezos's, right? When like when will Zuck become chair and hand it off? Like whether it matters, I don't know. But but I still think it's it's not the same. It's not the same thing though. You're right. It's not the same. I'm just saying I'm just saying from a from the only thing that makes the seat hot is an investor can get rid of you, right? Like and and the reality is that investors don't get rid of founders unless they're ninety and yes. It's it's not consequential. Yes, okay, you're right, you're right. 'Cause they it it's up to them. Whenever Zaka's ready to move over, he'll do it. Yeah. No, you're right. I don't agree with you on that one. It it's up to him, right. Okay, here's here's a cr here's a piece of criteria. The CEO has less than thirty percent influence. Meaning the Jamie Diamonds of the world, who are greater than thirty percent influence at these widely held companies, these little kings, they're running monarchies, right? They're it's really hard to put someone like that on the hot seat because they're so powerful on the board. The board is the one who has to get rid of them. But when they have so much influence over the board members, there's just no way that they'll that they're likely to get get canned. That's the thinking there. Yeah. Yeah, now here's where I'm gonna disagree with you, and it's a minor point, is that what what interests me is that if if if companies have a lot of pressure on them for a variety of reasons, at those companies where the CEO is not like a dictator, like it's it's less than fifty percent but over thirty percent, could I could it not be possible that that CEO will get the most pressure if the company really starts tanking or sucking or Controversy, like all the pressure is gonna be on them. Sure. So this is not an exclusive hot seat. I'm just saying there's a dynamic between the board and the CEO, and the board fires the CEO, not investors. And so all I'm saying is the hottest hot seats are those the Mike McDaniels, who is the Dolphins coach, who like basically the these like a coach who has a tenuous hold on power is what I'm saying, right? Like they were already an outside the box. The hottest hot seats. you know, s you know, coach or they they joined like they they joined and no one was really sure how good they were gonna be. like those kinds of CEOs are the ones that I'm targeting. That's not to the exclusion of the others. I'm just saying these are most definitely hot seat CEOs. Here's another piece of criteria. The gap between the CEO's power and the highest non-executive board member power is small. And Okay. Absolutely. A d a democracy. So basically, some non-executive board member has like not the the the power differentials n almost non existent. In some cases, it's flipped. Like Susan Arnold at Disney had more power than Bob Chapik, right? Like you had a non executive director with more power than the executive. Yeah, absolutely. And that and that's a good thing. Board deference is low, meaning that the boards do not defer to the ex the management team. They don't they don't they're not beholden to them. Right. A healthy a healthy checks and balances in place. the board itself is actually highly interconnected, which would suggest when you have low deference, but a interconnected board, a board where they all know each other, that the board actually is calling the shots because they have more to lose. They're they're they have all the power hell is held within the board. and then a company performance, obviously. Company is I put them in the bottom third versus peers, but effectively you've got a situation where the company underperforms and all these other factors are true. You're ready for some What about yeah, do you have like what about controversies? I didn't even do controversies because the controversies only matter if the performance is down because the ho most controversial companies in the database tend to be like like the Exxons or the Metas, right? Like and but performance is up, no one cares. No 'Cause that's a big one. Okay, then right. go go ahead. Okay, but then let's let's talk about a different case. So so when I say controversies, I'm I'm I'm referring to a methodology developed by MSCI, right? But what about what we do here that MSCI doesn't do, w and I I say w we probably do better than anyone else, is that we tag headlines stories about everything, everyone. So so MSCI will miss the Cracker Barrel story, right? Where there was a backlash against Julie Massino. It won't be a controversy, certainly. but we will capture it and and the heat i if we're capturing enough heat, enough negative sentiment against Julie Massino, could that not increase the chances of her losing a job? Especially as your to your point, or I don't know if you've gotten to this point yet, but especially since she's a woman, right? That could increase the chances all this heat against her, right? That that she could be in the hot seat. Yes, it could, but where that ends up showing up for Julie Messino is because Cracker Barrel's price was the the stock was cratering and she didn't have that much power. So in the end, the the heat can exist for a CEO who is a very powerful CEO and the stock is up. But if they're not powerful, I think the what you're talking about is the push. It's like the seat is hot. But the heat is a part of that equation. I understand that, but it's a combination. And then something happens be because before that, I'll say this I'll say it this way. Before that controversy, Julia Messino's hot like seat was hot. Like she already was in a place where if she screwed up the likelihood was she'd get tossed. Except correct me if I'm wrong. Yeah. Well, because the company was hot, because it was a glass cliff sc scenario. But that that is where we're landing, which is something hasn't happened to get them pushed out yet. But you're one thing away from them getting pushed out. One loss, one controversy. Look, where I'll agree with you is I I I I agree, but the the stock price really took a dive after the controversy was played out in the press. In fact in fact, I think it was like starting to go up before that whole controversy. So th it it's possible that it's the con the the news headlines alone is what tanked the s here price. But anyway, that just semantics there. But keep going, keep going. Yeah, of course. Yeah, you're probably right. All right, so there are a couple of bonus things where basically they just make your seat hotter. That is, there's a director on the board that has core industry knowledge, right? Like it's hard to get rid of Bob Iger if no one knows media. But when there's somebody else on the board who knows media, then dissent becomes easier with all the other factors. Or the CEO get gets paid n like like not outsized, not massive outsized pay. Right, because an a really outsized paid CEO could be on the hot seat, but directors also are kind of like, We just agreed to pay them a whole lot. We look really dumb if we get rid of them. how about the CEO is a woman or or a person of color, specifically black or Hispanic, which almost never happens, but it if you're a woman, the leash we know just for average tenures, the leash is much shorter. So those are like bonus tosses. Well, it's even it's it's even shorter than that because anecdotally speaking, a lot of your diverse CEOs are stepping in in less than favorable conditions. They're they're they're not taking over companies that are soaring to the clouds. Like they're they're really like these like you know w let's throw this at the wall and see if it works, but if not, we'll pull the trigger in like eighteen months. Yes, exactly. Right, exactly. Yeah, we've like and I wonder how explicit that is. I wonder if those are like things that get said. We kn but we know it to be true and and they I would think that yes, they must be said unless it unless it's so built into like our our our you know, our biases that it doesn't even need to be said anymore, right? I don't know. Well, all right. So I ran all this data through the database. There were about a ten thousand five hundred CD CEOs in the database that I looked at. about sixty three hundred of them had less than thirty percent influence, so a little more than half. And of those, twenty two hundred or so had CEOs that obviously were vulnerable because It was a family or a founder on the board. There was an executive chair there. It is way easier to get rid of a CEO when there's an executive chair on the board. It's a family owned company or family, you know, representative on the board or founders on the board. Those CEOs are basically like rentals. They're rental CEOs, right? So when I eliminated them all and I ran all the data, I ended up actually with a very short list. And we're talking out of like eleven thousand companies, ten t you know, Well, I gotta say, like, that's a good thing, right? If it was too long it probably wouldn't be meaningful. Well, that's why I like have all these very specific narrowing techniques, because I wanted to say, like, let's narrow it down to real hot seats. There were sixty-seven companies that for whom all the criteria fit, and a few that had bonus criteria. Here and actually the way we know that this worked is that of the sixty seven companies that were on the hot seat, twenty-three of them actually just flipped their CEOs. Are you serious? I love this. The less yeah, less than two years l fully a third of them have CEOs that are less than two years in the position. Please please tell me this will be incorporated in the new website. We're gonna start putting up like a hot seat logo somewhere in the platform because but what's interesting is there there are like like ripple effects to being able to identify these companies because these are then companies that if they hire a a female CEO, we know that they're Glass Cliff CEOs immediately. We know we can basically see in data there's a glass cliff scenario. A hot seat CEO, an underperforming company I love this. Or may and also a list, maybe. People love lists. You know, the CEO doesn't have a lot of power to begin with. These are the perfect situations where when you add female CEOs, that we they're set up for failure, right? in fact, of the 23 companies that have just flipped their CEOs, three of them were female CEOs. Northland Power, SGS, and Domino's Pizza. Th I mean, that percentage is 10%, more slightly more than 10% of the The companies that just flipped their CEOs that had hot seats, where the number of CEOs that are added that are women is way less than that on average. So we're adding women to Glasscliff positions. and you can see it in the data. The other the other the other knock-on effect here is succession planning. These are companies that when you I haven't gotten into the weeds of it, but when you actually look at the nom committees. Right. Yeah. Huh. This is fascinating. This might be one of the best things you've you've stumbled upon in in recent times, yeah. Mm-hmm. The like there's a mix of horrible and decent. Like so you you can actually pre-identify companies saying, like, look, the company's underperforming. The CEO's, you know, been here a while. The CEO, you know, doesn't have a tremendous amount of power on this board relative to other boards. this board is is really well suited to replace the CEO. Are you planning on it? Do you have a six succession plan in place? These are perfect engagement questions. Here are two notable ones that I pulled out out of the 67 that are worth talking about. Number one is UPS, United Parcel Service. The CEO is Carol Tomey. She became the CEO in 2020, but she's been on the board since 2003. She's been there for twenty three years on the board. She has a low influence gap next to the independent next highest independent director. Go ahead. Sh the board is hugely connected. 73% of the board has like friends of friends in common through other boards and nonprofits. 'Cause this was like a Fred Smith board, right? This was no, that's FedEx. UPS is is totally different. but the interesting thing is while the board has a lot of connections in common, she is not one of them. They are not connected to her friends, even though she's been here for t over 20 years. Peddox, sorry. Even though she's been there for over twenty years. Wow. Tells you about the women on the board there right there. Yeah, go ahead. In her tenure as CEO, in the last three years, they've been in the bottom quartile for TSR versus peers. Plus, the board is full of people with core knowledge of the sector, and she is a woman. There are fewer combinations more toxic for CEO hot seats than those things. So UPS, if you're Carol Tomey. Mm-hmm. Yes. You should be watching your back, because if you underperform persistently, there's going to be a lot of push on on on that. The other one that I thought was interesting that I didn't expect, well, I'll give you one that I thought was interesting that has a but for, which is Occidental Petroleum, who has a female CEO, been there for 10 years, and if not for the Iran war, where profits are way up. Yeah. Good prediction. Mm-hmm. Right, where profits are up. Yeah. Otherwise, TSR was down in the last three years. And the like all the other things apply where they're they're underperforming. you know, the connections on the board, 80% of the board is connected and she doesn't hold them, those connect the same connections. the influence gap was low. so but for the Iran war, Occidental Petroleum might be looking for a new CEO. Except except politically speaking, this is the pattern of of the Republican Party. They've been starting wars in the Middle East o and oil profits have surged I mean it's been going on for decades since since George George Herbert Walker Bush. I'm just saying, like the mid this this should be an expected pattern that this the CEOs of big oil companies it's probably part of the reason why they're so close to that political party. I'm not to turn this into a political thing, but it is interesting that you mentioned that I'm not disagreeing with you. that her her safety wa has been enhanced by war profits. I think that's fascinating. But go ahead. Yeah. So there is the the the weird upside. although that said, I I not in the data yet. Richard Jackson actually just succeeded Vicky Holeb on June first of this year. So I like I'm pointing them out, but I neglected to look at the recent change that they just appointed a new CEO. So so yeah. Okay. The they wouldn't even qualify. The other one worth mentioning here, and this is only because it surprised me. Halliburton CEO Jeff Miller. He's the chair of the board, he's president CEO, named CEO in twenty seventeen. according to the data, so he's been there for eleven years. He has eight Mm-hmm. the one of the smallest gaps b in power between himself and the next executive on the or our or non executive board member. i the board is fifty percent connected and they've been in the bottom third of T Sr un un in the twenty or the thirtieth percentile basically of T S R in the last three years. Is there a reason why we're not talking he seems like somebody that no one's talking about. Director. Robert Malone. Hey, put on the list. But i according to the data, there should be a hot seat there. Hey, the good news here is that in all of media fantasy sports media, the amount of things they get wrong is is through the roof. So if you get Jeff Miller wrong, it's it's okay. Put him on the list though. That's a hot seat. Hot seat doesn't mean a that your buck catches fire, it just means the seat hot and you might, it might happen. I like that one. That's a great one. So so It just means it could could be. It could happen. So th look, we'll we'll I'll stop there 'cause there's no point going over the other, you know, t thirty or forty that make the cut. But the idea here is can we identify CEOs in the hot seat? And the answer might be yes. before we end the show, that's fascinating by the way, and I'm looking forward a to the new website and B to to having this information available. I think we should I think you should add board chairs into that, see how that see what happens with that. before we end the show, I I wanna circle back to your Trump media question. according to NASDAQ listing rules, I wasn't aware of this. I don't know if it's different with the New York Stock Exchange. They actually Yeah, have not done that yet, yeah. Don't have to have an a meeting until the end of this year because the fiscal year ended on the the the last day of last year. So they have to have a meeting before the end of 2026. Now, it's high this doesn't happen. It's highly unusual. there is a mechanism in place at state law where shareholders can petition to to order a meeting, right? Because it's been 13 months. more than thirteen minutes after the l the previous meeting. But as we know, the shareholders at Trump media, it's a it's a dual class dictatorship, right? They don't they don't while the mechanism exists, the the the non Trump investors don't have an actual voice. So you're right to point it out. They haven't technically busted NASDAQ rules, but they're definitely breaking something. Like something is out of order there. I mean, the fact is if that first of all, NASDAQ, rewrite your rules because that that's absurd. That means a company could have a shareholder meeting on like the last trading day of the year, like December thirtieth, and then have another AGM on January second and wouldn't have to have an AGM until effectively two years later, right? Yeah, absolutely. March. Well well and and f using this as an example, I think their last one was in April of last year. So they yeah, so you're right. According to Nasdaq, they can wait twenty months and it's not a big deal. It's okay with Nasdaq. Yes. Yeah. I mean, they can wait twenty three months if they just do it December to January, right? So like and then they don't they wouldn't even have the new new materials, right? Because they they just had it. Right. They can. They can. Yeah. And then y the other problem is well and and I will say this, the the state law sucks too, because there there should be a a mechanism at controlled companies where minority investors have a say. I mean can push these things to the table. Anyway, that's the proxy countdown for the week of July twenty seventh, twenty twenty six. Join us I don't know. Well w in a few weeks, we'll get back to this show. Yeah, there'll be a couple of weeks break, I think, before we get back to the season. When we jump back into the alternative democracy pool, forever on the lookout for Cheryl Shenanigans, Dopey directors, scandalous CEO pay ratios and wayward band aids. Yeah, that's right.