Transcript
This is proxy countdown. Welcome to the Big Show for the week of June 9th, 2025. Alongside my tag team. Partner Matti, good start. I'm Damien rawlas and today is countdown. Rewarding cheating CFOs a new way to circumvent the alternative democracy and ISS and glass Lewis Battle of the wit Penn entertainment. A J Hogue size shareholder hole at Netflix and on the big boat. Matt takes a closer look at your attendance to have that, right? Let's go to our top stories. I don't have a ton of top stories this week. I'm looking at a couple of Trends. Let's start with the money. To keep working, they're going to keep their jobs. The named executive officers at Capital, One Financial, get a total of 43 million dollars. in time, vesting Equity, that just stock basically in recognition of their ongoing and anticipated work, essentially, including a wapping 30 million dollars, For CEO and chair, Richard Fairbank. So Capital One is integrating with discover so I guess they're getting extra money because they're getting pre bonuses doing something extra. All right, which I probably thought this was their job. Yeah, we're talking about that. It's their job. Okay, this is the money to walk in the door. There's a golden. Hello to walk in the door. Newly hired Roblox CFO Naveen. Chopra Get six million dollars in cash. 28 million dollars in equity. 15,000 dollars a month for temporary housing, until August 2026. And 900,000 dollars for relocation expenses. Where is Roblox located? San Mateo, California. I actually did look up the rental market there. He's going to have a very nice place. Core pays. New CFO, Peter Walker gets 8 million dollars in equity and relocation expenses. Despite bailing on his last job at instructure in less than two years. So he only lasted two years and I asked you is this like marrying, the guy who was cheating on his wife, when you started dating him? Isn't that kind of what it is? Wow, wow. That's that's even a confusing question. Yeah. What are we throwing money at people who leave their jobs and less than two years? I just don't really understand that. Well, this is the best way to get them to stay around. Isn't it? Isn't it a retention bonus? Isn't that what it's supposed to do? And then finally, to walk out the door, Texas Roadhouse, CFO, Chris Monroe is waving the White Flag after lesson, two years, the job and still gets a million dollars so he didn't do what he didn't accomplish anything. He's he screwed up. He felled to we have any stories in which someone stayed in a place for more than two years. What's weird to me is that I've been doing, we've been doing this show for so long that I say he got a million dollars and I'm like, oh, that seems low even clearly not. It's A queen number. And then finally, I'm tracking, we're tracking new ways companies or circumventing the alternative democracy. These are new but they're new. It's a new thing. I'm tracking. So this is proxy season, right? A lot of companies are holding their annual meetings now so that that would be the opportune time to have shareholders, elect, new directors, but here's what's going on, International flavors and fragrances adds Virginia drosos to the board as well as to three board committees. Only one month after their annual meeting in. May Same with the Hartford Insurance group, they quote, unquote elected, Thomas, Bartlett. Just a month after their meeting and immediately appointed him to two board committees. And then finally, at American Waterworks, they didn't even wait a month before increasing the size of the board to 9 members and appointing Rafiq nothing too to the board and also three other board committee. So that's the way of doing it right? Just wait for the meeting to end and then just put someone on the board. It's a legitimate Trend because we actually looked at this in a show last year. And went backwards to figure out how many times like what's the average number of days between when a director is appointed, and when they are actually elected at the annual meeting and at the time it was like two to three months. Now we're talking about 11 months on the job with vest virtually, totally vested stock. He would they would get fired with a month left to deliberate whether or not to accept the resignation, which would vest all of their options. So they get fully paid for year on the board before they even got elected. Basically, it is definitely a thing that's happening, is it's a, it's, I'm glad you're watching this. Moving over to our proxy cage matches. Here's a, we've covered this. This proxy season. I like this one Penn entertainment shareholders are getting conflicting messages from ISS and glass Lewis on how to vote. On activist investor HG vors 3, dissident nominees so ISS and HG Vora. Are saying yes to all three nominees while Penn the company and glass Lewis are saying, no only to former Penn CFO, William Clifford, who was there for 13 years. This this kind of reminds me of the Disney proxy cage match, right, where they're trying to put their old CFO or or even it's it's United Health, right? You're just boomeranging people from 10 years ago, back onto the board, whether the CFO CEO whatever. So there's some funny parts of this proxy match Penn is saying that they actually shrunk their board from 9 to 8 members. So don't even bother trying. They're saying there's not even a board seat for the third person. So you can't try to put a third which is Club Ludacris. Yeah, but it sounds like the courts will decide this one because Clifford is running anyway, and he's running on a pose. So if he gets one vote which she will, he's technically gonna be elected to the board. So we'll see what the courts decide on this. One. So, let's get to the opinions. ISS said, no, I SS remember is Uh, they are for all three dissident nominees. They said the board lacks an adequate level of direct gaming industry experience. Interesting, it appears that this efficiency, a lot of their calling. A deficiency has hampered the board's. Ability to effectively, oversee management, especially during the push into interactive games. And there is little evidence that the board has been able to hold management accountable, which suggests that a direct who was not afraid to share a contrarian Viewpoint, may be a valuable addition. Now, this is confusing on so many levels. First of all, they should be applying this metric to every company they cover. second of all, The is kind of odd that the former executive, the former CFO is the one applying the contrary to contrary and Viewpoint. Yeah. But they're just a lot that's interesting here and again what they're really putting a flag in is that it's important who you like to the boards, right? And that really what they're saying, I mean, really important to scrutinize Each and every member of the board. I would agree with that. If, if there was any consistency, I mean, we've talked about this ad nauseam, they'll say it when there's an activist involved, but if you apply the same logic and reasoning across all boards, there are hundreds, thousands. Even that are compromised in all the same ways. So what are we really bringing a focus on it? Or we really just picking aside because maybe HG Vora hired ISS to do an assessment or maybe, you know, i s s doesn't like the pain chair or it just seems like because it's so random and because it's so unevenly applied, I don't know that it does the thing which is to bring Focus to who's on the board so much as it does. The thing to bring Focus to iss's sort of potential compromise of their own in assessing boards, or they're inability to A Cess board. Sure that's what I like, you know, they don't have enough people to assess all the board, so they only do it on the are they don't have the data set or they don't have a data set or, or, or Paul, you know, knows the chair of this board but not the chair of that board. Like I don't really get it because it's so uneven. You end up in a situation where you have to speculate what is real. If you had the data to do this analysis, on this board at Penn entertainment. Get the data to do it everywhere and you can make this assessment clean. What's also interesting is that the ISS comes right out and says the board lacks and adequate level of direct gaming industry. Experience end of sentence and yet does not suggest voting against any of the sitting directors. Not to mention that the number of boards that we see that lack direct core, knowledge of the industry in which they're on the, you know, for the companies on which they sit is all of them, basically, all of them. So glass Lewis disagrees with ISS. They say that they believe certain aspects of the former CEO, the former, the former CFO Clifford's profile May overlap with existing or anticipated members of the board. Now again this is odd because we see so many boards where several current or former CFO. So there's always this overlap The boards, a glass Lewis goes on to say the boards assertion that his background is not sufficiently differentiated, and its unanimous decision, not to support him. Despite backing two, other dissonant nominees raises questions as to, whether he would bring distinctive value at this time, that, that is just so convoluted. So there. Because the board doesn't want them. They, he should. He share? That's what. Yeah, which they're saying. Like, because they ask for the opposite. We should do the opposite of the opposite. A very confusing. I don't understand the law. What would be the harm? And so they're basically citing him as a contrarian. What? Now, what would be the harm of a contrarian Viewpoint in a, in a boardroom of about what eight or nine people? What would be the harm? I I understand this at all and any more than I understand, you know, like Andrew witty and Stephen Hemsley were on the board together. In Hemsley was the CEO of United. There was overlap between people is overlapped. Now, a standard because we've already pointed out that there are companies with four former Executives on the board of the company and, and nobody bats. And I, or do you mean overlap in terms of board interlocks? Because on average 20, to 30% of every us board is connected to one another through another board. What do we, what do and then? And then the reverse logic of because someone doesn't like someone, maybe they should be on the board. Like, I don't understand that, I don't understand, well, any of the analysis it a little bit more confusing because now, the company itself, Penn entertainment said that the former CFO demonstrated, Antiquated views of a rapidly changing industry. Now combined that with the fact that ISS who agrees with with pain A. Says that the whole board Penn entertainment, lacks gaming industry experience, so it's a little confusing. So I SS is saying the whole board lacks experience Penn is saying that that that's important that if a guy if someone lacks experience that's important so that I again I'm just confused. Like when is it important that you have industry experience? When is it important that you don't? I the whole thing really makes my head spin, they know that four of the members of the board are 70 years or older, right? Like so if you're talking about Antiquated experience, wouldn't you evenly apply that to people who are, you know, like what? Yeah, especially in a rapidly evolving betting industry. I mean, the the bedding industry has not gone under such rapid changes forever. I mean, realize I can't think of a time that's more important to adopt. I love that. The company is fighting against their own EX Pho. It's in nuts and saying saying things like because he didn't adopt a loyalty program in 2014 and it became lucrative later. Yeah, that he doesn't know what he's doing. He was the CFO correct. Yes, he not the sea. Just wasn't a fan, he wasn't a fan of the program, but that's the thing. This is what it's this is what it's telling me is that it is important doing. It's important to isolate each member of the board until like kind of articulate their positions to kind of go over their record, right? To come up with a quantifiable data set to how they're performing, but yet we only do it in these rare occasions, do we do it. You know what I love about this. First of all, I wish that Penn's CEO and all the pain board members would have to actually stand up and do like campaign speeches because this effectively is But you know, someone at Penn coming out and saying Clifford, you know, you had your chance and when you had your chance you passed on this lucrative program that has been huge for our company. We really think you should vote against Clifford joining the sport. Like it sounds like a campaign speech, put them all up on stage, get all the information about all their positions on policy positions economic positions. They're like let them duke it out and then let investors vote. I I don't understand anymore because the analytics at ISS and glass Lewis, are they come to the opposite conclusion? They come to conclusions because somebody didn't like a thing that they should, you should do the that thing because they don't like it. What are we doing? This is the, this is what this actually is is it is a scream in the night for data about board members. Yes, it's not it's not even analytics.com because you cannot trust anything that they're saying that like they, there's they're giving you nothing. Except they're sort of intuition and they don't apply it evenly because they don't have the staff for data to do it. Just go to free flow analytics.com. You can get half the data right there. Yeah. And yeah, I could say. And yet, they're getting paid a great amount for their so-called expertise. Let's move on to Victoria's Secret activist investor bbrc worldwide, which controls 13% of the company. That's pretty big is yelling at the company's board for for quote failing, to adequately demonstrate meaningful accountability, despite clear evidence of boredom lapses. They're specifically targeting board and sufficient board, independent and excessive chair 10 year like the excessive chair 10 year. Their namely, they're looking at Donna James, who has been the board chair for two decades. And they're saying, rather than waiting for a proxy contest. How about the board of Victoria's Secret? Just kick her out right now? And refresh the board bbrc. Do you have you ever looked at tenure like the number of directors that have been on a board for 20 or more years again? This is not a proxy advisor but it's an investor applying a logic that you could easily apply for every company in the United States. Most of Europe, not the UK because they have a 10 year cap on 10 year before you're not independent anymore. But like what and you would supplies to so many characters, you're not all you're, you are not allowed to have a non-independent chair, so you could, she couldn't even be in the, she could be a director, a non-independent director, but UK would not let her sit in the chair role because she's been there for me. Well, we have leadership in the US who have been there for 20 plus years by themselves who were gonna highlight later J Hogan Netflix finally bbrc also Address the recent cybersecurity incident. So Victoria's Secret was actually taken off line a few weeks ago, I believe maybe. Last week for several days it was such a problem their delaying, their first quarter results. So they're kind of bbrc is saying that this is an event that Victoria's Secret may have been. It may have been preventable with proper precautions, meaning that the board should have been ready for this. Now, now, here's the, here's the story. Here's the, here's their boarding, a nutshell. Here's what bbrc is talking about. I guess, all though, I don't know why they're not suggesting their own nominees. If this is the case, but the audit committee has the Mandate of overseeing cybersecurity risk at Victoria's Secret. There are four members of the audit committee only one of the members has a skill called cybersecurity oversight, although even that's a little bit loose because she's the former CFO at Foot Locker, Other than her, there is no other director who has a has listed cyber security oversight. So again, I don't know why. The bbrc isn't suggesting that we add directors of a cyber security experience. I don't really know what's going up but that, but but my main takeaway here is that there are right to look at the board. They're, they're right to scrutinize director. Skill sets director experience. This is look I agree but that they're also betraying the fact that investors don't right? Because if if you are going to say that you know the cybersecurity into incident might have been preventable and the board lacks cybersecurity experience on it. If that is going to be part of your argument, then how do you explain the flag at the fact that Clorox after their massive 2023 data breach that shut down production, actually the lowest the director of receiving the lowest vote's. You know that year got 94.5% of the investor vote, people know that this is an issue, they know you need directors who have that sort of background or knowledge and yet No one actually doesn't assessment or votes that way so I don't really get it. There's such a big gap between what happens and what they say should happen when it comes to an activist being involved. Well, I hopefully sharers, are paying attention because there is a clear Target if you want to voice your discontent, because Sarah Davis is the chair of that audit committee. She's also the lowest performing board member according to our metrics. So, if you're going to hold anyone accountable, should be the chair of the committee that has the mandate to oversee Cypress Security risks. So, there you go. So, let's move over to our vote results table. There is not a lot here to talk about unfortunately. So I looked at 41, large cap us companies again, I look at a subset of roughly, the 600 largest companies by market cap in the US. Out of those 41 meetings uh the trend continues. They're so few share the proposals this year. It's incredible. Only 21 out of that group and 12 of those share. The proposals came from just two companies. Walmart and Netflix, what Walmart, being a controlled company people, it's the point. Well I'm glad you point that out because the pointlessness of a shirt on proposal at Walmart is is clear. When you look at the voting result, all seven got between 0.37% support and 7% support which is extremely low. I mean and you're right it's because of the Walton family's holding so I it is curious like why why it Target Walmart, you know it it paints everything in like it lets you know that this is performative Cheryl, the proposals are non-binding and they are performative even when you're doing it at a at a company where There it isn't controlled. The fact that we see routinely shareholder proposals. The most proposals are filed the places, like, Walmart at meta at Amazon, which is in control. But Bezos owns 15 or 16% of the shares. Like we see routinely the bulk of Cheryl's proposals, going towards companies that have a Founder involved or have some sort of control mechanism. Means you just you just issue a press release. If you don't like what the company is doing, like, this is effectively a press release. So I've a 41 meeting is only one shareholder win. I suppose overall simple majority. Voting shareholder proposal passed at HubSpot getting 51% of the vote. Other than that that the typical shareholder. Disconnects we keep seeing like as an example at Devon energy 35% no on pay which is a very high figure. Yet the lowest director got only 6% against their their re-election and then just like The Oddities of the shareholder audit is in general. Like I'm looking at the call, call a special ship call a special shareholder meeting Charlotte proposal. We see that one a lot by either John chevin or Jim McGee. A PayPal got 44% support at Devon energy got 8% support. I just don't, I don't know, maybe they forgot how to read but I don't know, that's a Devon but let's cover the only real compelling story this week and that's Netflix. So at Netflix and this shouldn't be a surprise to anyone who's actually carefully looked at shareholder votes, at Netflix, over the past basically, like 15 years. So lead, independent, director, which I say, you know, with a wink in a, you know, in a giggle Lead independent director, Jay Hoag, who is been on the board? A since 1999, right? Since the Since the Clinton Administration since the end of the Clinton year, essentially along for the ride with Reed Hastings. I think Reed Hastings joined two years earlier, but somehow we still lead independent director. He received a whopping 78% votes against at the meeting this week. I don't know if I can't remember seeing a bigger vote against a high-profile director at a high-profile company. Now, the the short term stories this and this is the aggravating part of the story that Matt, I know, you're going to cover in great detail on the big boat coming up, but the key takeaway as to, why is that he failed attendance. So yes, the quote from the proxy, the board held four meetings during 2024 each board member attended at least 75% of the aggregate meetings. Except for j-hope, Who attended hap? Now, I will say that were that's already an exceptionally low amount of board meeting for. And in fact, he also is the chair of a nominating committee and they only had two meetings I believe. And I don't think he went to those meetings either. So again, this is what Shareholder seized upon. This will be the story as to why He lost his vote, but but before you get to your section of my, I just wanted to recap the the somewhat recent history of shareholder voting at Netflix. So tracking back to, I was tracking the votes against j-hope since about 2010. Now first, the first problem is that this board was classified for well over a couple of decades. They finally reversed that in 2022. So now you can vote against j-hope every year because the reality is, is that this is not the first time, he's lost an election. He actually lost it in 2020 as well with 55% again, he nearly lost in 2017 with 49% 2014 409.7%. But since the the resignation policy, then they have a majority vote Paul policy there which means that you have to tend to your resignation to the board, but the board can then decide what it wants to do with the resignation. It doesn't have to accept the resignation, so j-hope is not going to go anywhere, but here's the bigger backdrop that I wanted to point out. This is, there is no other company, like, this every year. Starting in 2011, there has been at least one, if not two share the proposals that that wins wins a vote at Netflix. So starting in 2011, a majority voting policy. One was 72% of the vote the next year of vote to repeal the classified board. One in 2013, there were four winds, majority voting polls, simple majority vote, repeal classified board, vote, even a boat to have an independent board chair. All with at least 73% votes in support and year after year, this kept happening year after year the board, just completely ignored the shareholder. This was why j-hope initially started getting vote against and then it kind of all went away for in 2022. The company finally acquiesced and they Agreed to declassify the board. They agreed to eliminate supermajority voting and then shareholders kind of stopped noticing until the attendance policy came up this year and now people are mad again at j-hope. So, Matt, I don't really know how to summarize this. Other than that, this is a extremely long and convoluted history of strange shareholder, votes at Netflix, what usually ending where the company, the board completely ignores the will of the shareholder. Well let's let's summarize it this way. Yeah, with something from that, you pulled from 2017 when he got 49%, in know. So, the way to think about j-hope is every year, he's been up for election until 2020, 20, one ish when they are 2022. When they Declassified the board every year, he was almost voted out or voted out. I mean it was 49% 49.7 percent, it was 85 percent know and then they declassify the board. And, and then people stopped paying attention, except that in 2017. When he got 49% know, you pulled this quote lead, I'm not even sure where you pulled. This is from, this is from a Shirley proposal. I believe from John Sheppard and it says lead director J. Hogs long tenure and the fact that he was an early investor Netflix, make compromise his independence, right? That does not stop being true when they declassify the board. In fact, that was in 2017 years ago, eight years ago, when he was still, the lead independent director, which he is today. After 25 years last year, He got 9%, no. The real question here is, what if, what did investors lose their memory because that this was a director that ignored you for 22 of his 25 years on the board. He ignored everything. You said he was, he was long tenured, he was not independent and then you got the Declassified boards. You had the ability to vote him out. And instead you take the next two years to ignore voting him out entirely until this year. Yeah, when he fail attendance. Well, here's the thing too, is here, and I didn't even covered this because there's just such an overwhelming amount of data on this company, is that in 2021 shareholders actually said yes to A political disclosures proposal. They said, yes. In 2022 to a lobbying activity report. They also rejected pay 23. I'm so sorry. 73% said no in 2022, 71% said no in 2023. So even after they changed, they they Declassified the board. There's still ignoring shareholders and so that former protest vote against Jay Hoag should never go away essentially, because they ignore and they're finally, they're going to ignore them another time this year because he's not going to resign, right? So until the day, where the overwhelming vote against him, didn't come because he was ignoring you for 25 years, it came because he only attended 50% of his meetings, that's when it, that's when it came. Which is what I want to spend my time out of this because I'm over WellMed by Netflix's shareholder record. It's it's pretty incredible. All right, so for the big vote today, all I'm looking at is attendance, which is by far the stupidest of indicators. L. I marry drivers of director fail votes. It's either. Yeah. Attendance or activist investing and I was going to say before we even launch into this. What what's truly ironic here is that that to use that as your only indicator Belize the experience that j-hope actually has, so if you like j-hope in the first place, you are not going to find more institutional knowledge at Netflix, other than reading. So, you're going to penalize him for missing a board meeting. I, I think the dude who sleeps and breathes Netflix for the last 25 years, probably knows Netflix so well, that you could have handed him a notebook. And with the notes of that board meeting he missed. So, we got that. The reason is just a little bit strange. Let's pause on the fact that what a laughably low bar. It is to set 75% attendance at meetings as, as your, your red line cut off, that's it. We're voting against, you forget it. Because there while it is comical that in 2025, all you have to do, you could literally be in a bath. The bathroom of an airplane on Zoom with the camera off. Suited and it counts as having attended. Like it's not that hard to hit that goal but even having that as a goal is It, that's it. we just want you to be there, even if you're not listening, even if you're not and it is a laughably low Bar And as far as we can tell and and correct us if we're wrong, I know we have listeners who work in these industries and I'm looking at you. Glass Lewis and ISS, correct USA, for if I'm wrong. This is the only Measurable data point that actually causes action, right? Because there's no others. You have no other systematic way of saying no other than this one data point. So go ahead. Keep the thing that strikes me about it actually, is that it while it causes action? It still causes less action than you think in last year in our data. Of us large cap company directors about 500, 550 companies, 4700 directors ish. There were only nine directors who were up for a vote. And not part of like an excluded class like a classified board vote. It was like a non-controlled companies. There were nine directors that fail to tendons. So, you're talking about 4700 chances to fail attendance and only it only happened. Nine times out of 4700 to begin with. And that includes two directors, who were excused from meetings for medical reasons? Like, I was gonna add. I've seen that in the past, I've seen instances where there's been an excuse for medical reason and I SS and gloss Lewis have clearly looked the other way because they've gotten support from sure which fine medical reasons. I like, let's just we'll just say get I mean like I'm sure there's some very viable medical reasons, never reason that he didn't want to share is just highly personal. I actually read one of these. That said they they did not attend multiple Boardman meetings, for personal reasons, right? So, like that. Personal private reasons. Is that count. Is that the same as medical? I don't know. Who knows? But I do know that this There were seven chances outside of the medical ones for investors to register their disgust with director attendance. And this is again directors, all they have to do is sign into zoom and put it on mute. This is these are people large cap companies. The average director pay summary pay is about 250,000 dollars a year, right? So 250,000 dollars a year. There's no reason why you really shouldn't be able to like find an hour to join the meeting. The results of these votes actually suggests that the j-hook situation is unique. Oh, because 0 of the votes failed. So, I am 20, I I had. So I had the assumption that glass Lewis and I says, would automatically vote against. So the evidence suggests otherwise, they don't evidence suggests that investors care. So, little even about this that they don't bother voting again next to j-hope story. All the more confusing. It's totally confusing because there's nothing new about j-hope's situation, except the failure of attendance that will drive the vote. Because, let's not forget last year, he got 91% support, The in fact, in 2024, the lowest vote was actually 63% for and at monster beverage Tiffany Hall who failed attendance got, 99.67% of the vote, despite failing attendance. Now that she 99%? What's that was it for medical reasons? Do we know? No, it was not for medical reasons. I read every single one of them. I went through every possible failed vote. I could I could find. And then I looked through all of our data, two things are true, you know, about attendance of directors. Number one investors don't hold directors to even that bearish minimum standard. They clearly it is a red line as in every single policy that I've ever read states, that they will vote against directors who do not meet minimum attendance standard, 75% of meetings. And yet those directors routinely do not get voted out. So, that's number one. Number two, There are no votes against directors at scale in less than activists points out that they're compromised. That's pretty much it. Like the only way you can get a negative vote is is through an activist that that's the only consistent way you can do it which would make the vote against j-hope, so bizarre and so jarring because you listed you in the dock here, you have every single year every single vote, every single result for j-hope. And then shareholder proposals you're pulling quotes on it, he's been there for 25 years, he's still cold on quote independent and the lead independent director. He's ignored investors for a decade and the attendance vote. Put him over the edge. So, here's what I wanted to do for this week because this is such a ridiculous standard. This week, you get a chance to do something about attendance. Because one company out of the the 100th this week, a large cap us company called vertiv Holdings, 27 billion dollar market cap. They make infrastructure for like data centers cooling, you know, racks and closures and stuff like that. They had this in their filing this year, their proxy this year. In the year, ending December 31st 2024 all. But one member of our board of directors attended, at least 75% of the aggregate meetings. Mr. Katsu Bay attended, 50% of the aggregate meetings of the board of directors and was not able to attend the balance due to last-minute emergencies and other extenuating circumstances. So no real detail just couldn't do it as further described here in Mr. Katsu Bay. Does not serve on any of our committees. This is a board that met four times as a board and he attended only two of them. And he serves on zero committees and they did an aggregate attendance, meaning he was on no committees, which, you know, the Committees meet four to, you know, the audit committee can meet up to 10 or 12 times a year. They didn't sit on any committees. So he missed two of the four meetings, he had to get to He got paid 510,550 in summary. Compensation for attending two meetings, just in case you need to do the math, that's roughly 255,000 dollars per meeting attended and assume. If you assume these meetings are six hours and it takes maybe a day to prep for them, he made over 18,000 dollars an hour. To attend the two meetings. That's that's one median, Walmart employee to go is what he got paid. To effectively show up. Just, you know, for two hours at these board meetings. So Your you have an opportunity. To vote against Jacob. Katsu Bay, he has 4% influence, he's on the vertiv and Ryerson holding boards 570 TSR 4 51 on earnings. you have an opportunity to vote him out, which Did hope principle you should. Which if you do, j-hope's principal you should. But this is what it looks like. If you actually applied more data than attendance, right? The worst performer on the vertiv board is Roger faden. 428 TSR 471 earnings, 13% influence, he's connected to 30% of the board, including executive, chair, David, coat, or Cody coat. He worked undercoat at Honeywell for more than a decade. He's not remotely independent, he's the worst performer, he's not remotely independent. In fact, David coach is executive chair. He sat on the Business Roundtable is sat on the council Foreign Relations. He's Scout on the economic Club of New York. He's very connected. He's a connected CEO. He's on the compost. Secure board with two board members from vertiv. He is the executive chair of compost, secure and Resolute Holdings, which he runs which owns compost, secure code. Actually, put his son John on the compost, secure board. This is he vertiv went public via, SPAC a Goldman, back from 2018 to 2020, which is where you actually got katsu Bay. Katsu, Bay is a spec guy. In fact, the CEO of vertiv and I are quote, CEO here, worked under a different board member Edward, monster both worked at Emerson Electric. When monster was the CEO there and Giordano albertazzi, who is the CEO at furtive was basically just like a sales guy, okay? This board. Yeah, is just David Coates, personal play bored, right? It's whoever he puts their mixed with SPAC Finance, Bros katsu, Bae and Matthew Lewis on this board come from platinum equity. They both sponsored the SPAC. Jackie hausler was from Opus Capital. Joe Van dockham was from imperative science Ventures. They're all involved in the SPAC. This is a company that went public via SPAC in 2020. How many years should a SPAC board member sit on the board of the company? At some point, they're not adding value to the company at all. They're totally useless when it comes to what vertiv does. They are financiers. They don't, in fact, engineering, and technology is just 7% of overall influence, only three directors even have it as background knowledge. Only two directors, have production and processing as background knowledge. This is not a board whose core skill is making cooling equipment for data. Centers one guy Steven Raymond comes from retail food and he's a Dean at Wake Forest. This is a board that has virtually no skill in the thing that it does. They've serve at the pleasure of the executive chair, who puts them on multiple boards that he runs, right? And you have a puppet CEO in place. So yes, you could vote out. Katsu Bay. Just for the attendance failure. Or you could vote no on coat Friedan and katsu Bay and say. We looked at multiple data points to assess a board that is compromised beyond belief and does not represent you the shareholder just by being one share, one vote and despite being held largely by BlackRock and Vanguard like every other company. Yeah, it was suggest that we'll see. Now I'm confused because I, I was, I was operating under the assumption, that a Field attendance did automatically trigger a, no vote, but so I I don't actually even know what happened to Netflix anymore, but it does suggest that that if you look deeper, At someone like Kobe, you don't need him on your board, but if you look deeper at Hogue, you probably do need him on your board, but you don't think you need, you don't even need a tender. He shouldn't be the lead. Independent, directors that agree on. I don't think you need, either? What I think you need is to assess Beyond. Did they show up? Yeah, I think as soon as you start assessing Beyond, do they show up? You could name Leslie kilgore's on the Netflix board, she should not be on the board. She worked under reading Hastings, Richard Barton actually was an early investor in Netflix all so he's been there almost as long as j-hope. Why do you need j-hope and Richard Barton and Leslie. Killgore Barton has gotten a lot of votes against two over his tenure. What is just sentence? What you just to me mostly it again and talking about glass Lewis and ISS is that they should have a list of at least 10 triggers, 10 Flags, not just attendance that says, okay, if this flag goes up, we're gonna take a deeper look at this director, but we only really see this. One flag that that gets extra scrutiny. And let me before you move on, I want to make one small. Correction the monster beverage director who fail? Attendance was actually someone named Mark Hall, there's two halls although so I thought maybe that could have made a difference but his name is Mark Hall not Tiffany Hall and I looked at his vote and he got 99.2% all so it's not he's still got, I had a mapping error, you had a map in your but again this is just I'm definitely confused by this, I don't, but just in case just in case you are so fixated on attendance that you really need to vote against people just fail attendance upcoming. And then in the next couple of weeks, there are a couple more meetings that include skill soft, their agms coming up in July. Larry Summers is on that board. He failed attendance is that right? But he's a class two director and his class one year. So sorry you can't do anything about that but you might want to, you know, register your complaint there. How about Wilbur Ross ex Trump? Commerce Secretary is that Koya Therapeutics He failed attendance, really all, so a class one director and a class three years. So you'll get your shot at him next year. And then Keurig Dr. Pepper the board. Here's what they wrote. Our board Met 10 times during 2024 each director. This is what they write. That's clever. They write this sentence first each. Direct current director attended, at least 75% of the total, number of meetings of the board and committees on which such director serve, that were held With the exception of yes, Mr. Michaels do reason so they're closed there was that there was a health reasons Clause at the foreign Doctor Pepper. Well now I want to pull data, I want to know if this is like a trend this year because what we're seeing more and more is that shareholders are just more aligned with management in general. We're seeing this with the the lack of Charlotte proposals and diminished support for sure to proposals. So, I wonder if this attendance thing is just going away this year, if this is always been the case, I always thought it was an automatic trigger. I'm not suggesting that it meant. They were automatically voted out of the board, but at least that they would get Substantial votes against like, at least 10 to 20% again. So I don't look, don't get me wrong, like voting against like, it should be easy to attend, 75% of the meetings. When you get paid 500,000 dollars a year to do it, right? I think that that should be a trigger to look at the person who, who fail to get to the meetings and do an assessment. My problem is when you use blunt force instruments, like did you go to a meeting as effectively? You're only tool or Trigger or one of very very few tools or triggers to voting against a director. These are not, it isn't a protected class of human being. They are your effective employees as an investor. You have the right to choose. Pick vote. Yes, vote. No. And in fact with proxy access you can put your own directors on boards that are underperforming and investors seem to think that anything against Just a human being is micromanaging, but these are your human beings. These aren't management human beings. These are yours. They represent your interests, not Management's interests. I don't understand why. Any other facet of your life, you wouldn't allow an employee to stay on with the qualifications. That some of these people have the connections that some of them have the compromised nature of the relationship. They have, you wouldn't hire them. You wouldn't keep them on for 25 years. J-hope would not have a job in as middle management at your company. If every time you ask him to do something he was like man maybe 10 years from now. And let's not forget the overwhelming evidence that every time now we're seeing a contested election, an active, as an investor glass Lewis and ISS, they are finding deficiencies almost every board, almost all. So we know that these deficiencies exist everywhere. The other thing I was going to add is I'm always pushing for like the whole governance World in general ESG world just to stay creative like like keep the R&D going. We don't have to like, we don't have to be. A happy with initiatives that occurred two and three decades ago. How about this? How about a fail? Attendance triggers. A contested election. So that if a director fails attendance, how about he he or she has a run against a different, another director, how about that? At least give shareholders a choice in the matter. Right? I love you want to articulate. Why you think the director who cannot bother to show up to our meeting is still valuable fine. Articulate, it in the proxy, but then, let's shareholders, have a contested election. Let them have the choice to say, hey, we need someone who you know, has this skill set is a little younger, might not be sick, whatever it is, whatever reason they want. That would be a great. I'm 100 do it. I'm assuming you have nothing else. No. Oh my God. That's plenty. That's the proxy countdown for the week of June 9th. 2025. Join us next week and we jump back into the alternative to democracy pool Forever on the lookout for Cheryl Shenanigans Dopey directors scandalous, CEO, pay ratio is now failed, attendance, standards, and Wayward Band-Aids. So many