Transcript
This is proxy countdown. Welcome to the Big Show for the week of February 10th, 2025 alongside my tag team partner, Matt McCarty. I'm Damien Wallace on today's countdown. Bath and Body Works new anti Dei, scrub The presence is female at Citigroup. BP has a profit tapeworm shareholders, continue to be pleased with pretty much everything and on the big vote's. Our top voting recommendations upcoming annual meetings. Start with our trade wire our top stories. Hey Matt. Is there a secret Dei Purge going on? At Bath & Body Works. Black woman Dion Riley has to serve as Chief Human Resources officer despite holding the role only since December 2020. Which is about when companies started to embrace things like Dei, the troubling part is that she's left the company and the accordance to the filing. The company will initiate a search to identify the company's next Chief Human Resources officer. So they There's clearly no plan. There's just let her go, they just let the black woman running Human Resources. You see to serve as could be. She left because she saw the writing on the wall. That no one goes to Bath and Body Works. Who knows? But it's one thing I want to follow because we we did we had to be tracking over the years, over the past five years, that a lot of companies have been hiring black women, especially in the roles of Human Resources, diversity offices. So, I'm wondering where a lot of these women were gonna go if they're going to keep their jobs. Cloudflare. Now has two executive co-founders, dominating his board, former CEO, but current president, Michelle zatlyn will be co-chair. Along with CEO, Matthew Prince The lead independent director is hardly independent Scott Sandell. Joined the board one year after it was founded in 2010. What is the point of having your co-founders, as co-chairs, the CEO? And the president? I don't why I have a board. I don't understand that. What the point of the boy is, I think so they just, they're just proving the like sharing. That's all. It's another. It's another place to go talk. A Citigroup. Continues to lean into its female board power as Titi Cole joins the board meaning eight of 14, directors are now women and forgive me for celebrating something Taboo in the new anti Dei era. But TT is also the boards only black woman. So there you go. City Group continues to fly in the face of common sense. I don't know. It's Jane Fraser, doesn't give a damn. I mean, worth saying that Titi Cole is all so Highly accomplished and absolutely in has like long history of she was at Wells Fargo. She was at Bank of America that you know she's got an MBA, she's got, I mean, come on people. I the idea of a Dei higher, that should tell you that, that person is the most qualified person in America because you can't, you can't get to that hurdle without having twice the resume and twice, the education of all the white men. And so, that, that should be a stamp of absolute Supremacy. That's not, yeah, that's not Damian role. Is hazelnut Ross, making things up. That is what the data suggested. We've been studying this for over 10 years, 10 years ago, when you wrote the paper, that's exactly what you found that. The women had higher education, qualifications then the men did in general but but you're also write a quick glance at the resume is a Titi Cole her resume. It's not like she runs a family wealth fund. I mean, she's has increasingly higher roles at Banks and financial institutions Across America. Robin Washington is leaving, Jackie household, all alone at the boys club now known as the vertiv Holdings board, they'll only be one woman on that board. A robin is the new CEO and CFO at Salesforce. I don't understand that one Robin has been on the Salesforce board since 2013 and was lead, independent director, since 2022, which basically proved the fallacy that you can remain independent after serving on a board. So long Matt she's been on that board so long that they just hired her as an executive. Yeah. Just like just stay just do just do it along with her new dual role. Salesforce is giving her a hat full of eight and a half million dollars in cash. Manhattan Associates gets to keep its monogrammed. CEO hand towels as Eric Clark will succeed, Eddie keppel as CEO. The new CEO will join the board with three million dollars in cash and 8 million dollars in stock. And as a class two director, Meaning that? Cheryl was won't be able to vote for his first Board election until 2027 get some time to settle in you know relocate. Yeah. Finally. Sky Works Solutions. New CEO, Philip brace. Who is replacing? Liam Griffin will be welcomed with 30 million dollars in performance shares and 300,000 dollars for relocation expenses. The relocation expenses alone. Represent a CEO pay ratio of 9 to 1 while the golden. Hello? Bonus of 30 million dollars is 924 times greater than the median workers compensation. Let the Power Trip begin, right? I mean, Philips and charge. Look, Kudos, where do every week you come up with a new Ratio or metric that I love the relocation pay ratio might be the next best way to measure Insanity of the CEO pay ratio when the CEOs relocation expenses are worth nine full employees. That's a problem. I would say. That's a problem. It's a problem. Let's move over to our proxy cage matches, the big news is that a BP activist investor Elliott Investment Management. Has built a cool and quote significant, but under undisclosed stake in oil, major BP Elliott is expected to demand sweeping changes to be PP which, which could include housing the chair hell gooned, along with a completely revamped boardroom. The changes are expected to include a further watering down of BP's climate commitment, CEO Murray. Ocean claw said, the company had already begun pursuing new fossil fuel projects and would restructure its low-carbon business, all of this do to an overreaction and short-term worship of profits, which have dipped from a gigantic, 14 billion pounds and 2020 23 to an enormous 9 billion pounds last year. I I don't think Elliot has a strong track record of going into a company and say, you know what? Let's beef up the carbon commitments to save the planet? They don't do that a lot. Yeah. Use Auto Parts Company LKQ is near a settlement deal with activist investor and Korra that would give the hedge fund seats on the company's board. And finally, us activists fund. Dalton Investments is calling for the resignation of long-time director Hisashi. He had Japan's Fuji media Holdings. This is the latest response to a sex misconduct Scandal involving a former host at Fuji television network. So he had is 85 years old and has served in the board since 1983. But why stop there? Matt, there's only one woman on this board. It's like a board of, like, 20 directors, so why not all get rid of the former chair and former CEO, misaki Mia Mia, who has 20% of board influence was serve since 2001 for starters I mean and how about that? It takes a US activists fund to go to all the way to Japan to break up, the boys network, that is the that board. I can't get over unpacking some of these things. First of all, how were targeting somebody? We wait for them to get to be such an outlier that they've been on the board for almost 50 years before we look up and say, well maybe that's not right, but second of all, Firing somebody as an activist demanding, a resignation for a sex misconduct Scandal that by the standards of this country. Today in the US is positively quaint considering who were appointing in like government positions and what the meritocracy actually looks like. I mean, Vince McMahon, it took multiple lawsuits for anyone to even care that he was the CEO or not, and he still managed to exit out with a golden parachute. And no one, you know, took an activist stake. The whole thing is very interesting and or cute, when you look at it, I think you're calling this two woke. I think that's what I said. Yeah. Let's move over to our vote results table here. are the thoughts from 10, large cap annual meetings over the past two weeks. I'll try to go quickly here because it's basically really boring. Hormel Foods, all directors, everything at least 94% support Walgreens, Matt. Only 5% of Voters wanted to punish the man responsible for basically all of Walgreens troubles, that's Stefano pessina. Which is actually less than the support for a shareholder. Proposal asking for a report on cigarette, cigarette waste. All right, stop there. What is nobody wants to blame patina? Yeah, investors. What is more impactful voting against Stefano pessina or voting for a report on cigarette waste, you want to change, you know what, you know, what happens. If you get rid of Stefano pessina, you can probably like get rid of cigarette waste from the guy who's creating the cigarette waste, right? Like that, I don't understand. The vote in, at least be equal. You think at least be equal? I don't understand the voting patterns here. If you have a problem with the way, Walgreens is performed such that we're getting rid of the CEO and there's the, the stock is just a few years. Yeah. If this is a problem, then, why do we not vote against the person who's responsible for the problem? Beckton Dickinson. The big highlight there is that Carrie Byington 99.5% of shareholders support carry Rockwell Automation all four director? Oh, this is the only company where anything seemed to happen. Rockwell Automation all four directors up for vote and the Sam pay about 15%. No, that's it. That's the big. This is the big protest Rockwell Automation at Jacob Solutions. There were four directors over 99% support but the whole board got over well over 90% at Moe Moog, not nothing, it's a trailers are really happy Emerson Electric all the directors received 98% support, except The nominating committee chair Joshua Bolten, who was all the CEO of the Business Roundtable. 15% of Voters voted against them. I can't even. I don't even really know why. I don't even, I don't know. Maybe they hate the Business Roundtable. Atmos Energy. The Highlight there is that Talisa Toliver got 99.5% support a Tyson Foods. A shareholder proposal to disaggregate. Shareholder voting results, got 13% support, it's a kind of a strange Shirley proposal, and in the battle of the Tysons Barbara barely beats brother, John she had 94.3% support, John got 93.7% support and how about the fact that they have no vote on sound pay? Well, only once every three years look, I don't even care about that. So much as if you are the one investor that voted for Barbara and against John, please call us. We'd like to get your take on why? Well, yes, someone's doing their work, right? I mean someone's doing something. Yeah, something to do something. And finally, at Franklin resources, all directors at least 96% support. So overall you can see at these 10 large cap companies matters don't care or at least they're not they're not really doing any research. So there you go. That's it. Let's move over to the big vote picks. We were we I picked up. I'd say about 10 to 15 large cap. Oh maybe not all large cap companies just companies in the US Germany, the UK that have meetings coming up over the next week. So Matt, where do you want to start with that list? Oh look. There's 13 a GMS that we had on the list, okay. Um they're 72 total directors at those companies, that's it. 72 directors. Yeah, some of these are actually very small boards and not all the directors are up for vote because of the there's some classified boards that are mixed in there. But I want to say about that later, go I want to start with a concept. Okay? So um, because clearly when we look at performance metrics, we're not seeing, I mean, I know the show has a lot of credibility everywhere, you know, like the heads of stewardship at every massive institution is listening to this, but when we talk about performance, no one seems to want to vote against a director for poor performance. So almost like we don't think the directors necessarily responsible for the performance of the company. Fine. So let's back up and let's ask a different question. Do they Merit being there in the first place? And by that, I mean on paper which is basically what you know because if you're voting if you're an Institutional Investor there are 90,000 active directors of which something like 75,000 come up for a vote every single year and let's say you own just the US market. You're still talking about roughly 19, 20,000 director votes. There's no way you can call those people and find out. Do I like them? Do they make sense on this board? Who are you? Like, there's no interview process here. So, let's build Merit off paper, and that is to say, We chose. Five, sort of categories of reasons. Why directors might be on a board. And we're going to call Merritt having three of the five as your, you know, three reasons to be on the board out of five, okay? So if you have three out of five, that's what we're calling just, you probably married a sports live. It would be, let's say it this way. It would be really hard to argue against putting that person on the board because they have three of the five. The five areas that we're talking that I'm going to talk about are really basic knowledge. Do you have advanced knowledge of the industry and his issues? Right? Seems important. You know, leadership. You know, I view it like everybody on their skills, Matrix, I care about, you know, like I've been a leader at Big organizations before everybody. That's everybody. Everyone's got it, but let's put it in there so that should be easy enough for everyone to get Economic interests, if you're on the board because you're a large shareholder, a Founder, a family member, maybe an activist puts you there. You have an economic interest in the company's performance in the game that's skin in the game. There's that's a reason to be on the board. That's it. Obvious reason to be sure. Performance. Do you do you have any track record of outperforming suffice to say that? We don't think anyone's hiring directors for past performance but it would be a reason. If somebody is killer, somebody is great. We were going to help talk about a company today. That a Charlie Munger on its board in the reason why Charlie Munger was on its board perpetually because he always he made a lot of money that's Matt. Yeah. We had a potential client once or maybe they were a client, I don't remember. Tell they told us that they invest in winners, right? Exactly. So if that were the case, then then why would you vote on directors for their performance? It's pretty easy to track that, right? As long as you qualify what a win is with this data, you should be voting against or for these directors on that idea with this data you can define a win and then you can vote that way so performance and then finally for Network Power and by that I mean, these are powerful people who sit on big boards, they know lots of people, it's a who, you know, right? Like they're connected to one another, they know other powerful people, maybe they know Tim Cook. I mean, there's a reason why you see a lot of X, you know, a politicians globally, end up on boards because they have access to, you know, power or Regulators or other things that are valuable. So let's call that Network Power. So that's your five things right, knowledge, leadership, economic interests, performance and Network Power. Any one of those things is, could be a reason to put someone on the board. But if you have three of those things, It would be really hard to say. You don't belong on a board. Okay. So is that based on the fact that most directors don't have to, like, did you do did you run the data? And I ran the data on that. So all of this is built off of data. When I say knowledge, we actually can look at where directors, went to school, what they got degrees in what roles they had in their career. We can determine sort of algorithmically at least some base level of knowledge and doesn't match the industry. When I say leadership, I can talk about where they see EOS. Do they have experience on multiple boards, are they big boards? There's data we can use economic interests performance, Network, Power, Network Powers all connections, right? Like so we can, we can actually have data around this, when I looked at all the data, what you end up finding is that there are a lot of board members who do have, like, Merit on paper. Having a board position. They they there's Merit there, right? There's a reason for them to be there and it wouldn't be like so right. Yeah but not the majority. Okay, we are talking about something. Like I think, overall the number was and this is a global number of all directors in the last seven years. So not just active or directors, it was something like 27% of directors had Merit. Had three out of five, at least, three out of five, three out of five, the number who had 0 out of five was the the interesting number because there's more than 10% of directors that have zero as in, of course. Yeah. No good, no, no good. Reason on paper to vote for. Of course, there might be times where where, you know, the board is looking for a new director and the one thing they really need, they've identified the need and the need is Network Power, right? So, which would be great to list in the proxy statement, right? We really needed a board member with Network Power. You can see that our other directors, don't have this. So we know that I don't have three out of five of these. They don't, they don't hit three out of five of these typical measures for merit, but we're gonna Focus solely on network power and not why we're selecting this director, right? That would be good information to have, that would be great information to have. That would be perfect information. It would actually be significantly useful to an investor so that you can make it informed decision about oh well. Now I know the reason Is why the nominated? Because this is their job, the nominating committee job is this why they're chosen. We know that. We know there are nepo baby, we know, they didn't really study anything significant at school but they know this. They know this person, they know these people and and that's why we're what we went on point them. So, here's something that should terrify you when you're talking about this week's votes because we're just talking about votes coming up in the next, you know, five to seven days, right? In this week's vote. 15 directors, actively on the boards. Now, out of the 72 have zero Merit as in. They were not flagged hero. Any one of these things, they were not in a 72. Okay. They were not CEOs. They were not on multiple boards. They were they don't have an academic interests. They perform below average for both TSR and earnings. They don't have any network connections and they actually have never worked in this industry in any like direct capacity, right? Yeah, wow. Yeah. Well, I will say this, a caveat there is that a lot of the boards up for election this week, our classified boards. So it it's possible that some of the other directors, not up for election or actually good. Maybe these are just maybe these are the ones that suck because that's what I'm saying. It is possible. But only on the flip side, only 25% of these directors. Actually Merit board slots. So we're 25% have three out of five categories met. Is that what you're saying? That's what I'm saying. Right? So what I'm saying, overall 21% of directors have no merit and 25% have Merit, okay, based on having three of the five of these, right? That sounds about right because usually most of the average people are kind of in the middle, right? So you have a, you have your outliers, you have your outliers and that's fine. So one approach this week would be vote against anyone who doesn't have Merit on paper because I love it. Not only do they not have performance metrics like they perform below average but they don't have they were, they're not CEOs. They're not there because they're Network Power or they're not they're not there for multiple reasons. Why are they there? It's unclear. That's The mystery, that's the mystery like this is where you'd raise a flag and say, all right, who are these 15 people that are from flagged Here, and Now, rather than doing a deep dive in. 72 directors, I can do a deep dive in 15 and figure out, you know, how should I vote? But what I did instead was actually, I could give you just a list of 15, they actually span multiple companies here, Daily Journal, Corporation, IES Holdings, Powell Industries, Raymond, James, Financial TFS Financial Marine, Max? Okay? Because the companies that were talking about this week are mostly small cap companies, but I'm going to or small cap companies. I'm going to give you a few highlights because we're just gonna do top picks. Go ahead. I'm going to start number one with a team that desperately needs knowledge and I'm talking about Powell Industries Board. Powell Industries has three directors that have zero Merit on paper. I can't figure out why is it there? But only 13% of Powell Industries Board has knowledge of what Powell Industries industry does, right? Like they're they don't have direct experience. The one who does on the board is named Cathy Curtis and she has just under 5% influence. The Powell Industries actually provides sort of electrical components. Like they build the grid, they're grid builders. I cannot for the life of me, figure out how Christopher cragg who is flagged as having zero Merit overall, when you tag, all of these things has 16 years of 10 year at Powell Industries, he's an ex oil, executive, overseeing electrical components company. Most of this board is either from Texas or X oil or bowls gonna say, yeah, is it? So, this is a, where is this? Is a Southern Company, is it headquartered in Texas? I believe it is. Yeah, so that might be part of the reason, but even one of the people who isn't from Texas James McGill, he went to Miami University. Miami University in Ohio, so did the CEO? Cope the CEO and chair went to Miami University. So there are connections between these people that are confounding giving that they actually aren't experts in what they're supposed to be doing, but they all ended up on this board, which should absolutely be Red flag. If you're an investor because it means the people on this board were not put there based on. Oh, they're gonna add strategic value, they have they have a great view of our industry over the last, you know, next seven years. They They're not based on, oh well, this person has access to Capital because of all the friends they have. It's not based on everywhere. They go, they outperform. It is based very clearly on. We all worked in the same kind of places. We all kind of know each other, we might have gone to college together. So let's get together on a board. That is very much on paper what it looks like and it's no surprise because Paul Industries is headquartered in Houston. Texas, and Texas, of course, is, you know, the land of oil. So it doesn't surprise me that you're that these are the directors that end up on the sport. And the problem, of course, is that shareholders don't do their due diligence. They don't actually kind of look into who should and shouldn't be on the board. Well, the data here is pretty clear which means as a starting point from highlight number one. And then I'll let you give me a give me one of yours. There's an easy. No vote on Christopher, Craig vote. No on Craig, he doesn't fit. He's got 16 years of tenure, move on. Yeah and let me highlight something else because this is something I'm looking into this year the on top of voting, no on crack. If you're looking at the Powell Industries Board you highlighted Cathy Curtis who was there for a reason and she doesn't have enough influence. You said just under 5% influence when you're talking to investor relations as a shareholder especially if you're an Institutional shareholder and you have those conversations. Ask for Cathy Curtis, to be promoted to leadership positions on the board. I, I haven't looked at the board, maybe she should be chair. Maybe she should be lead directer but at a minimum she should be chairing a key committee. So there you go. I I co-sign that. Yeah. Okay, I look, I'll tell you one of my recommendation. I, my methodology is not nearly as expert as yours. But here we go, Hilton, Brandt What am I saying for hillenbrand? So this is a top performing company. They actually bought seven, oh seven overall, which is i that's pretty high in our. Yeah, and our universe, this is a board that is led by female board Powers led by women. The CEO is a Kim Ryan. They have a positive 4% gender gap. In fact three of the most powerful directors are women. So there you go. However. This is why I picked Helen brand. Helen brand is one of the classified boards up for election this year. And I'm sick of it. I'm sick of classified boards. So I'm just saying, vote against all everybody voted as a protest voted at least just enough enough of it's just it's just the most backwards way of of allowing investors of voice to every few years and to your point, Matt that the proxy statements. The companies don't even tell us why the directors are there and how they're performing. So, so to hold back on the vote every few, it's just, it's asinine. So I want to move on to it is curious why? I know these isn't a large cap company or really large company at least. But it is curious why there's not even a shareholder proposal to declassify, right? Like it's almost totally outside of the Cross hairs of any investor who is interested in governance. Yeah, yeah. And I think maybe some of those shared, a proposals don't end up on these smaller cats is a Billion dollar market cap. So it's not that small but and again I hate to pick on Hildebrand because they there are performing well. And again they are led by three powerful women, but again, I'm just sick of classified boards. So if you need a, if you need a reason To vote know there's a reason classified boards. So what else you got? Matt. What's another recommendation? Yeah. All right, I want to talk about Siemens energy which is one on the list and it's very German to me because yes it's a German company is an ADR so we're not talking about a us you know your typical us company. It was on the list that we had this week for for votes coming up, right? But I can't figure out how their board is structured because when I look at just performance numbers now I'm going to I just tackled knowledge young. I'm going to tackle performance when I look at just performance numbers TSR Siemens energy is entire board. Underperforms in fact, when I compare it to just the companies that are for vote this week, It underperforms like 90% of their board underperforms every other director up for vote. So I don't know why. That is the case I even corrected. For I wanted to look at only directors who are on multiple boards and I came up with Jurgen Kerner who was on three boards actively he bats 039 in earnings. 039039. Wow. And he bats 170 and TSR and 170 on carbon. Now the reason why I bring up carbon is because this is the company's tagline. On their website, quote, we support companies and countries to reduce emissions across the energy landscape for a more reliable affordable and sustainable energy system. The big thing that they sell. Is carbon reduction in fact, one of the, you know, one of the things that I flagged is there are embroiled in a human rights controversy for a wind farm that they build in the Middle East. This is a board that underperforms on everything including the thing that supposed to be cord at what they do, which is pay for this. Entire city is Wonder director. Yeah, at least one director should pay for this. So my first vote against here is is Jurgen Jurgen Mike. My second, my sort of sub pick here is giving the fact that they have a human rights controversy that you could argue is court of what they do. You would be justified in voting against the entire Siemens board, Siemens energy board. I like it. They've underperformed as unit have high controversies. If you are talking Merit, they don't have much of it. When it comes to actual outputs, sounds like they're really underperforming. So my my if you're voting against one, it's Jurgen, if you're voting again, if you're more willing to be aggressive the whole board that would be my pick. My next company, is Raymond James Financial. I think they're the biggest company in recovering this week. 33 billion dollars in market cap. I lead direct your Jeffrey Edwards has served for over a decade. I think we talked about this, a few weeks ago, that's an automatic know for me. From now on if you're, if you're a lead director at independently director who has served for at least a decade, You know, you're done, you're gone, it's over and that and that's aligned with the principles. You see in places like the UK, where, if you've been on the board for a decade, you're no longer considered independent. So I'm not completely making this up and I'll just say that that that that what this does is it should take care of some. Another problem I have with this board which is it has a minus 12%, gender gap, which means that the women on the board don't have sufficient power. So, what this does is it allows you to promote a woman, who's already on your board Marlene devil to board chair. So, this is another one of these companies where the the CEO and the chair Paul Riley. He's he has dual roles for some reason. We don't need dual roles. No CEO should be the chair, but Marlene double. She's been on the board since 2020. She's a risk committee chair. She's the chief risk officer and had of Med life insurance Investments. This is a highly qualified woman. She should be chair of Raymond, James Financial. I'm saying it right now. So vote out. Jeffrey Edwards and promote Marlene devil to be board chair. That's, that's my assessment of Raymond, James Financial. All right, I have a rim in James one, two separate director, but it is worth saying that I definitely co-sign the idea of Vote against lead. Independent directors, long tenured lead independent directors. That the roles of your own chair. Yeah. That they exist is insane. I mean, you have a lot of power as a, as a investor. We actually, I'm looking at our database right now just active board members in our database. Do you want to know the longest tenured lead independent director in our database? Not on these companies. Just overall, go ahead, the longest tenure lead. Independent director has been leading to Independent director since 1993. So that's basically an executive at this point. I mean, I would say at nearly 40 years, you probably lose your Independence, don't you? Yeah, well, look, maybe that. That's why I brought up the case with the woman Robin Washington at Salesforce, she was lead director at Salesforce. She been there so long over a decade that they were just like, hey, why don't you just Stay and keep working and maybe work a little longer and become one of our Executives of the 3,052 leaded dependent directors active in our database right now. The average 10 year is 11 years, that's the average, tenure of a lead independent director. Yeah. And I'll tell you one of the problems and why I think that is is that because American companies have these combined roles of CEO chair, which are so incredibly powerful and utter nonsense. They, I think that a lot of these boards think. Well, we need to find our one of our most powerful independent directors to battle the combined CEO chairs. So we so, they often pick ones that have a long tenure that they feel like will have like that can actually battle the CEO, that's just my guess, but it's stupid. It's stupid, they're not independent. And you can solve, you can partly solve this problem by not having a combined CEO chair. That's That's my ass. If you've been at a company for 30 years, even if it just kept pace of the, with the S&P 500, like in terms of stock returns, right? These are annual vesting periods for options. That directors get, you have made somebody who's been there for 10 or 15 years incredibly. Well, he just on your pay. Every dollar that you make extra like every bit of wealth that you owe to accompany, you lose some semblance of Independence, don't you? I mean, this is this is not like it's a one-for-one trade. If you're an investor, they're not looking out necessarily for your interests given that they are getting wealthy no matter what they do. Yeah not to mention that if you if you're an investor or just a person who is struggling you know with the the lack of a counter ability going on in America right now this this is sort of, you know you're in your frustrated with the rising power of CEOs and the rising tackle oligarchy. This is actually one way where you can make a difference. You can start to kind of you can build up the strength of independent boards. You can you can have them be more forces of accountability and you and you can try to decrease the power of the CEOs. I mean this is one way to kind of exercise all your frustration. I'm not saying it's it's going to in this short term, it might not change anything, but in the long term, it very well might chip away at some of the things that you're upset about right now. So my Raymond James Choice was Tony Garcia and it was for one's very specific reason. He is the only director for vote, only the director, the only director up for a vote in this set of companies that bats below 500 on controversies outside of the Siemens energy crew which like all of them have problems, but he bats 451 on controversies and he has multiple board slots. So on, just a pure controversy basis, you could vary, you could simplify your process by simply saying, like, these are directors Who oversee multiple controversy, controversial companies that are doing something that's a large negative externality to get counted. I'm not talking about like, a one guy sued for defamation. I'm talking about, these are issues that are more widespread issues, like massive oil spills or, you know, investigated for fraud, or, you know, big controversies. Tony Garcia is the only one out of this. That you can make a rule that says, in every single, you know, vote, we're gonna, we're gonna Target directors who just oversee companies that are constantly mired in controversy, and we will vote out the worst performers of them. So, in this case, it would be Tony Garcia who I say vote against. And let's not forget as an investment strategy. You don't have to dwell on the negative Optics of voting out Tony Garcia because you can immediately present another option. You can say, you know, we're targeting Tony Garcia because his performance and controversies is this. And we have a list of directors who excel in this area. And, and we propose the that one of these men, one of these people from this list, gets nominated to replace Tony Garcia, right? I mean, you don't have to dwell in the negative of just removing a director, you can actually it can be an added a process where you're swapping out for a better director. So there you go. So my last recommendation I want to talk about Matthews International just For a few seconds so they actually have a proxy contest going on. And we've talked about this a lot. We were kind of always confused that. Why do investors suddenly pay attention when there's a proxy contest. Why so that the 98% support votes suddenly, you know, the change director investors, get a little bit more pissed off. So but this one, I don't, I don't, I don't really understand this one so much so that the proxy contest is from Berrington companies, Equity Partners, they have three nominees One of them is the CEO of ethos energy which does maintenance of generators for power plants and Matthew's International, they make like monuments, that kind of thing. So I don't know what the, I don't know why you need someone with maintenance who does maintenance of generators for power plants. The other two nominees both work at Big like Venture Capital firms. You have someone formally Sarah bus and you have the CEO at barrington's himself James miter rotunda? I don't know. Matt usually I'm kind of for a lot of the The the activist nominees but these three just seemed like Duds to me. I don't I I just I don't I don't like any of them so well, I'll say this. Yeah, your view is in direct opposition to ISS glass, Lewis and Eagan, Jones approxi, advisors unanimously are back on now why the activist slate against Matthews? Why? This is the one. Yeah, because underperformance right company underperformance, but this is the eye. Look, I actually looked at the company. It's not there. I wouldn't say they're underperformance is so drastic but yeah, sure, go ahead. I mean, the trucking about improved oversight and accountability and they're talking about like, there's ongoing management issues and okay, but then why not someone at least with industry expertise? Well, why not the vote last year? Voting out the people that underperformed, right? Like, yes, all of the recommendations last year were four, all of the Matthews directors, and the recommendations this year, are again when there's an activist involved to your point about why does it take activists? Which is clearly what's happening here? And the irony is your absolutely right by the data. When I look at Matthew's board in terms of Merit, 20% of the board was flagged, as having Merit, 40% of the board has direct knowledge of what Matthews International does. 50% have leadership experience and 100% have Network experience. In fact, 20% of them, outperform their peers. So why are we targeting a company that actually was not the worst even in this two-week period? When when there are so many other companies that underperform and we could name them? Yeah, that's why I don't understand either. So it's like any kind of activist campaign just gets ISS and gloss Lewis happy. But I they're again they're not really following through. They're not they're not really like kind of putting the puzzle together. They're just kind of going with the prevailing winds. I will say this if if Matthew's International is a company that you want to Target for board overhaul ISS and glass Lewis, I'm looking at you, then why wouldn't you to Matt, to your point? Why are you voting against the chair who's been there since 2009 Alvaro Garcia TuneIn on, or how about the CEO? Why don't you Target in a succession plan? For the CEO, Joseph bartolotti, who's been there since 2006. I mean, how have you been not been mad at these two? Who both been there for almost 20 years now? I just, I don't, I really don't understand it. Well, so I don't have any take on Matthews, but then your vote recommendation would be against either chair or CEO or both if you're unhappy, both both if that's what, if that's what you want to do. But don't, I don't just accept barrington's nominees which I really, I don't understand why they're additive to the to what, what they actually do at Matthew's International. I just don't understand. All right, let me finish this out with one more. It's more a confusion than it is. So I dove into Daily Journal Corp because they were one of the companies, where zero percent of the directors were flagged as having Merit. And I could not figure out really why? Why would 0% of them? And when I looked at the data, first of all, there's only four directors on the sport. It's not a classified for. There's just four of them and I thought you had to have five, okay? It seems very odd to me like that this exists. Maybe they are grandfathered in because they've been public for, you know, 50 years or whatever. But what I realized is they did have five, the fifth was Charlie Munger Oh, there you go. Charlie Munger joined the board in 1977 and he effectively used the company as a mini Berkshire Hathaway. The company operates small, local papers. And when I say small, I mean like the San Francisco Daly and the Journal of Sacramento and like the time even the biggest newspapers in those cities. No, no. This is like the third tier newspapers and so okay cities and what they actually made most of their money on right now they're they're revenues with 50/50 between advertisers and subscriptions. To subscription numbers are roughly on par with the number of listeners to this podcast, right? Like we're we're talking about very common, there's of people but what they made a lot of money on the past on was putting out legally required Public Notices for things like, you know, public forum or a bankruptcy hearing or you know, an auction or a title Change or legal proceedings, or something like that. Munger used the free cash flow of the company while he was on the board to buy stocks those stocks included positions and like Alibaba like unrelated to this guy's, right? Yeah. He would buy what it feels a little like is if Berkshire was buying you know some something over there and Munger really liked it. He might bring the same investment. You know, opportunity over to the Daily Journal, Corp, where he was on board piggy banks or something. Yeah. Whatever it is. Currently the value of the companies around 400 million so it's a baby, it's a tiny Company by market cap but 370 million of that is just the Securities that Munger bought over years. Okay? The actual valuation of the company is around 20 million dollars. When you get rid of those Marshalls it's it's worth virtually nothing and the board. Actually, none of them should really be there. The people on the board include a woman named Mary conlon. She's from she was ex marketing at Pixar. She was a distribution of Warner Brothers, I'm not sure why she's at the Daily Journal Corp. Um, media, I guess, ish media, Jason dish. Sure, John Frank, who's a venture capitalist of oak tree Capital? He was in ex-partner at Munger tolles and Olson, okay. He was a direct Munger person, the CEO, Stephen my hill-jones, he was a tech guy from Canada and when I say Tech guy from Canada most people think oh okay you know like the Zuckerberg of Canada Blackberry he started a company that did Geography stuff in 1999 when he was 23, right? Like so we're talking about sure, pre.com bust Tech guy, got it. Um, and then finally rasool rayani who just joined, who's the president of Heart Pharmacy Group and he's Canadian, they're actually isn't a monger connection. There's a candidate connection with the CEO. He might be the first evidence of some moving away from Munger and towards something else Pharmacy Group except he has a pharmacy secret. Yeah, I don't understand, 0, directors, track here for like, you know, doing it. Not only do they not know much about doing physically printed paper Publications which is the majority of their business. But they don't know anything about buying or selling marketable securities, which is exactly what they are valued at. I had a question of first of all who's voting. Yes. On any of these directors. So I think you vote for the next show. Yeah. Well all of them. I'll report on this meeting. Yeah, go ahead but also flag for Vivek ramaswamy. Who went out and bought a 9% stake in BuzzFeed, which is a dual-class company and it didn't matter that he bought a 9% stake in controlled by Jonah Peretti. Why don't you buy a monger favorite company for 20 million dollars have him sell all the marketable, Securities distributed to investors and then buy it then it's a 20 million dollar company. It's it's cheap. It's small and it's a media company. You can transform it into some sort of media company and it's in all the places you hate, you could talk about how you hate the Liberals in San Francisco. Just an idea. Well, great well and on that. No giving investment investment advice to Vivek ramaswamy. There you go. That's it, that's the proxy countdown for the week of February, 10th, 2025, join us next week. Or in the next few weeks. When we jump back into the alternative democracy pool Forever on the lookout for shareholders sharks, and Wayward directors, drinking rancid water. I like that. Discussing.