Transcript
This is proxy countdown. Welcome to the Big Show for the week of April, 29th. 2024 alongside my tag team partner. Matt miscarry Hey, I'm Dave, I'm Damian Ross and today's countdown. Paramount CEO, Bob Bacchus replaced by an office of the CEO. Unions and proxy advisors weigh in. At the Norfolk Southern proxy cage. Match glass Lewis has an opinion about the Boeing board. At ajm boats. Directors, keep their jobs and on the big boat. We try something different this week, we're not gonna focus on one. To get to our trade wire. CEO Kevin Horicon is consolidating power at Cisco Corporation after board chair. Edward Shirley announced his stepping down for health reasons now, that the CEO was also the chair. Larry glasscock will become lead independent director, so why not just make Mr. Glass clock the chair in the first place? Doesn't make much sense Marvell technology, despite having only three female directors. With a combined 6%, influence is appointing. Two more men to the board, Rick Wallace. And Daniel Dunn, William Stengel. The second will be the new CEO at genuine parts. Before you get to excited. However, former CEO, Paul Donahue will remain on the board as its executive chair. The baller move these days, that's the ball or move Padre. McDonald is the new CEO it? Agilent Technologies as Michael macmullin is retiring and yes he's actually leaving the board. So have at it Padre. Matthew Bromberg is the new CEO at Unity software just for showing up. He will receive a golden. Hello bonus of 2 million dollars in cash and over three million restricted stock units in stock options. And two thirds of those Equity Awards is not tied to performance of any kind, any kind. Just finally in our tradewater CEO. Bob backlash is out at Paramount Global and will be replaced by a three-headed monster, called, Brian Robbins, Chris McCarthy, and George cheeks in. What is being called the office of the CEO? Never heard of this. According to reports bakhash, alienated Shari Rod Redstone chair of Paramount and CEO of national amusements which controls 77% of Paramount voting stock. According to Fortune Magazine, back is lost, redstone's loyalty in a way that Echoes the treatment that she endured at the hands of her father Sumner Redstone. The Elder Redstone was known to belittle her in meetings in front of Executives. Bad mouth. Her in the press, and undercut, her chances of succeeding him in the CEO role. The Wall Street Journal reported that back is reportedly went behind redstone's back and floating a potential streaming partnership with Comcast earlier this year Also Paramount is currently married. One of the most dramatic corporate takeovers in recent memory. With dueling offers from a group led by Oracle founder Larry Ellison's son. David and his company's skydance media and a 26 billion dollar joint bid from Sony and private Equity. Firm Apollo so Sky, dances proposal would pay Shari, Redstone a hefty premium for her voting shares allowing it to take control of national amusements and Paramount, without having to offer non-voting, Paramount shareholders anything, except Equity, whereas Apollo's, proposal would offer every shareholder or smaller premium, which is more popular with Paramount's, broader investor base. But would all what would result in a much smaller windfall for Redstone who controls enough of a boating stake in the company that she could potentially block it? So this is all about Shari Redstone. Well, the best part about this is their commitment to transparency in which they just held an earnings call. Where they said at the beginning, we will take no questions and played on Loop. The mission impossible sound track at the end of it. Great, one of my favorite Paramount movies, it was it was one of the only ones that I care and anything about. And but it is a really bizarre. I mean, this is what happens when you have dual class shares. Yes, thank you and voting power that's Consolidated with one family that last generation's dictatorships, totalitarian control at public companies, is this, this is what you got. It's a move over to our proxy cage matches. Let's start a Boeing. Where I think just this morning proxy advisor. Glass Lewis is recommending a vote against outgoing CEO, Dave Calhoun, And they're also targeting audit committee chair akeel jury who has been on the board since only 2020 and Aerospace safety committee chair. David Joyce, the former CEO at GE Aviation who was there on the board since only 2021, despite this Glass Lewis is recommending a vote to approve sayon, pay for 2023 conversation. Despite the fact that CEO Calhoun's pay package Rose about 45% to nearly 33 million dollars. I don't not going on more confused by this, this voting recommendation. I mean, I I am on board with. We will do Boeing in a future show. I'm on board with getting Dave, Calhoun out, of course, but he David Joyce are the newer that they're not the responsible for the culture? Yeah. What is this? And they're not targeting the nomination, committee chair, that they're the cooling. Not mad at PACE and they're not targeting the competition committee chair. But I don't know what? There's no Rhyme or Reason to it anymore. Yeah, because the safety culture in place, obviously predated David Joyce's involvement. So, I don't, I don't really understand that connection. Let's go to the battle at Norfolk. Southern a lot going on in this, since we covered it last week on the show. So first, ISS so ISS their taft-hartley advisory services and their social advisory Services which Focus recommendations on regulated unions and socially responsible. Investors said that investors should back Norfolk Southern activists and Korra and its CEO pick. Jim barber saying that an incora majority would help address negligence by the current board and address its serious concerns with the accountability. Two things that we talk about all the time on the other hand mat Iss's main advisory Farm endorse only five of encouraged 7 nominees withholding support for OnCourse proposed CEO, Jim Barber but noting that he would likely be a capable executive if he does take over. So I so I assess in a span of a couple of days is sort of overlapping and contradicting itself. You know, the greatest part about having no opinions is that you can put out 17 Advanced rear arms that all just conflict with one another. I mean like that, when you don't have to use data for any of these things and you can say, he would probably be a careful executive, right? It doesn't matter. You could say yes or no. To that ISS has main advisor arm, however, did recommend shareholders withhold support from incumbent board chair. Amy miles, but they endorsed current CEO Alan Shaw. So again, they're really making this, this situation confused. Now, on the other hand, glass Lewis came out recommending that shareholders support, six of anchors, seven nominees. I think the only one they're not supporting his, former Governor Kasich out of Ohio and they're also recommending support of OnCourse, CEO pick, Jim Barber and significantly. They're also recommending to withhold support from current CEO, Alan, Shaw, and board, chair, Amy miles. A, at the same time we have two unions coming out and support of anchor. That's the Brotherhood of locomotive engineers and trainmen teamsters. And the Brotherhood of Maintenance of Way employees Teamsters. They are supporting anchor. Whereas there are a dozen or so other Union supporting Norfolk Southern it sounds like the union support split right in the middle. 50% for each but Matt I ask you this. This having such a confused amount of opinions. Some recommending, some Director, some recommending with holding it, some others? It does this. Do you think this is a negative for Encore is? Does this make the situation less clear? Because now, I don't know if she was gonna know really how to vote. No. Actually, when you do the math on this, there might be some nuanced differences between like five to six, seven and quora members, like, Barber, not Barber, but clearly, you have unions. You have glass, Lewis, you have ISS all backing, and you have us backing and Cora and in some respect. And then you have Jeff son and felled backing the Norfolk. Southern slate and no one from Ankara. What it looks like is actually a sea like movement towards some level change needs to happen. That seems to be the message. That's seems to be it. I wouldn't focus on the new ones so much as someone from an Cora's slate multiple people from their Their slate should be on the board and the culture needs to change. It also does suggest on a side note, that ISS is not the monolith that people pretended to be. There are differing opinions coming out of different parts of their service, right? I mean it's not just a take this pill and move on. I mean there are, there are new ones is to their recommendation. And and I'm sure as a user you could opt in to different A different levels of service on I'm saying this only because the anti-esg movement is claiming that the Monopoly of glass Lewis and ISS are basically ruining capitalism. Yeah, on some level. That's right. Like they're clearly, not a monolith of single, you know, thinking where they're saying, this is the one recommendation. On the other hand. Yeah. What is a recommendation if you recommend every single side? That's not a recommendation. You're not actually using any data or any like, you're not actually making a case. You're just saying, vote for whoever you want and we will give you cloud cover there, an insurance policy for how you vote rather than a recommendation on what you vote it is this very company that I think demonstrates are our data perhaps in the best way because we did the math and with the new directors coming on at Norfolk Southern Oh, 50% of the influence, will be held by three people at Norfolk Southern CEO, Alan Shaw, chair, Amy miles, and nomination committee chair, Jennifer Scanlon. So we have a much more quantitative way of attacking this, right? And that is that you have to withhold support from at least two of those directors. If you want to gain any power on that board, there is not just a random way of doing things. It's a, you need to attack the people who actually hold power on these boards, not to mention the fact that the only people who have talked about the, like the way they sort of jury rigged, talking about skills on the board and a pointing people to the Committees. And we use Christopher Jones who went from Mr to doctor. And suddenly had safety experience who might actually have safety experience, but was never disclosed before, and was never relevant before, all. And now, it was suddenly on there. Were the only people who are actually digging into the people who were making these decisions, understanding the power structure, if you don't, Use data. It's really hard to make a single recommendation at all. You can make every recommendation and it's just an insurance policy. Let's move over to our vote results. Table is a lot going on. There are just so many votes pouring in now every week, let me just start with that. Is there some kind of conspiracy Matt where Publicly held corporations in America, are trying to prevent shareholders, from being involved in more than one shareholder meeting at a time, because how, how is anyone supposed to pay attention to all these meetings at once data? The only way you do this is data like stop buying ISS is false recommendations and can you back that up? Can you back that up with something later in the show? I will back it up. It's almost like a second way because I feel overwhelmed because here's what I did. I looked at 36 large cap AGM, vote results. Just over the last week. 13 of those were complete. Nothing's nothing's going on shareholders. Just they don't have ever stamps. Yeah, and no differentiation overall. Only Matt, only four directors, and I'm out of roughly like, 360. Let's call it. About an average of about 10 per large cap company. I'll say, I'm just, I'm just guessing here that's roughly, right. Only four directors, even received more than 20% votes against the re-election. And of that, the highest was Joseph asks knows of Global Payments with 26% know which, you know, he's not gonna be going anywhere but that's it. That's it. So that's 1% of all directors up for election, got over 20% against, and as far as even over 10%, only 19 directors, that's only 5%. So really no one has anything negative to say about directors, at least this last week, in fact, At HP, Matt. All directors received between 98.7% and 99.7% in support of their life HP? Yeah. About that. Think how high that is 90 between 98.7 and 99.7% support? I mean, when you all of the numbers, I feel like if you get any number of like 70%, it's casual and difference when you're talking about 99.7% as no one agrees that much. There's nobody who's worth 99 but you, you have a whole of Fame vote on Michael. Jordan, there's always a couple of people who are like, well maybe not, I mean, it's bananas. How about this Oddity out of energy energy? Remember one of the things you hear about most that people, that the thing that bothers on the most is that they want independent directors on the board. Energy energy, shareholders elected, former Executive, Vice President, Kevin Howell with 99.8% of the vote. That's the, he's a former executive at that company at all the vote. Why hold a vote. There's also not much going on in say on pay as well. Only eight of those 36 companies were over over. 10% of shareholders said no. And only one was above 17% that citizens Financial Group with 37% of Voters saying no on pay despite that Matt, despite the fact that 37% of shareholders said no to pay citizens Financial all of the directors received at least 93% support, including the members of the pay committee. I don't understand that you don't get, of course you don't get it because the people don't do the pay. I really don't understand that one because 37% is a that's a lot of anger. Yeah, that's should be yeah, finally, let's look at some notable shareholder proposals as far as the anti ESG ones are concerned, I don't care anymore. They're like walking hate crimes. They get very little support. I don't even want to talk about them anymore. There were four independent chair. Proposals that were oddly consistent, in their support. Matt 31%, 3335 32%, their Bank of America, Techron, Pfizer in Illinois. I don't know why they're so consistent and Board chair vote. So actually I think like we're catching up to something that was suggested 20 years ago as a way to defray the CEO chair combination. But when you look at the data independent chairs, like like you, you can have it. If you have an independent chair, that's one thing. But the lead independent director thing is a gas light. So maybe they're catching up. Maybe people are like catching up to that fact the only climate related proposals that gain any traction. This last week, we're at Bank of America. They both got about 26% one for disclosure of clean energy, financing ratio one report on lobbying alignment with Bank of America's climate goals, there were some near misses Including the right to call a special meeting at Texas Instruments and Cigna group. Again, some consistency here 46% and 48% is a poor of those two. And finally this brings clear winner by far. And for sure the proposals is the simple majority vote. It just missed at Fastenal with 41% support but big wins at Teledyne Technologies with 81% support and every Source energy with 93% support. I don't know why three percent. I don't know why corporate governance matters in that instant simple majority vote because to me, Independent, an independent chair on the, on the, on the group of people that are there to provide oversight of company management, should be an absolute no-brainer. That should be think about it, 99% support with that simple majority. They can vote in every director to 99% of 4 vote. That's it for the last week's vote results table. Like let's move on to the big vote. I'm gonna hand this over to you because we're trying something different this week. We at first, we struggled with which companies to pick. There are two mega mega mega companies up for a vote next week, that's Berkshire Hathaway. as its first Charlie Munger less A meeting on Saturday and then Advanced Micro Devices where I believe, that's where Jensen huang's cousin Lisa. Sue is CEO. I think that's the company. They are having their meeting next week. There's a slew of other well-known companies up for vote. Colgate Palmolive. Verizon Etc. So, we didn't know how to handle it. So, Matt, you had a different type of solution this week. So, yes. So look, this is the same problem. That if you're an investor, whether you're retail or institutional, you're facing, there are 79 us, large cap companies. This is just us companies that have agms in the next seven days. Wait, seven nine. I had to cover 36 votes this week for this week. How am I going to cover 79 vote? That's the point. It's it becomes near impossible. Like even if you're an Institutional Investor with a stewardship team and hundreds of thousands of dollars worth of data, you're supposed to have an informed vote on, you can meet you, I can represent that four director 850 plus directors What you're voting on and then there's shareholder proposals on top of that, right? It's nearly impossible to track of everything. Say on pay audit, like auditor approvals. Nobody. This is why you see Robert rubber stamps because there there just isn't enough time or bandwidth. So usually these votes would be decided, just buy a proxy advisor or a policy like vote against nominating chair where there's poor diversity on the board or a comp chair without size CEO pay. We're going to do it totally differently rather than picking one company. We're going to face the problem the same way investors face them. Whether you're retail institutional, we're going to try using data, we're just going to use the data from free flow analytics. I was a joke Matt that there's a novel idea but actually it is a novel. It is a novel idea. Nobody actually does it. So we're gonna try it and we're gonna focus on just the non totalitarian boards, and when I say totalitarian boards, it means we're going to get rid of the Dual class shares. So I'm not going to give you like a recommendation on Berkshire Hathaway because Mostly doesn't matter, it doesn't matter, you know, for some of these companies you know where it's only 57 of them that don't have sort of outsize influence with the founder of family, a dual class share. Let's ignore those for now. Let's just you know we'll come back to them at another date. We need a way to deal with them mostly by breaking up the Dual class nature of them or the influence of them. But we're just gonna focus on 72% of the group of us. Large cap, companies coming up for a vote in the next week which is too okay, how you do that, which is 72% of them, which is there's 57 of them. And I'm going to start by laying out some ground rules. First, you call these policies if you want, but first, these are just philosophical standpoints. A board should represent investors. Can we agree that that's what the board is supposed to do? In which case directors need a minimum amount of Independence. Like in order to they can't be beholden to management. They have to be independent representation of you would not agree with the 99.8% of Voters that energy energy. They were just never going to get former Executive Vice President for to oversee management. I would not do that. Okay boards should have the necessary experience to be on the board to be a board member of that company. That means executive should be on the board. Shouldn't be the only ones on a board with relevant industry experience. It shouldn't be. The that should never be the case. They shouldn't all be CEOs because relevant experience includes any relevant experience. So you don't have to be a CEO of a company, some of them should be smart, some of them shouldn't got have gotten their MBA at, you know, Stanford like we want a mix of human beings. Most of, Whom have experience in this industry and and can represent shareholders interests that way. And number three, Boards, shouldn't have obvious red flags. And by that, I mean you should not have board members who have a long track record of going bored to board with controversies everywhere or restating financials everywhere. They go or shareholder returns. Always seem to dip over the 10 years that they're on the board, right. Okay. So those can we just agree on three those three basic ground rules? They should represent an investors, they should have necessary experience and they largely shouldn't have massive. Red flags attached. Okay. That's seems like a really, really low reasonable starting point. That's where I'm going to start. I'm going to use the data. It actually brings us to a new problem which is that when we look at the boards on these issues, the only companies only of the 57 companies that are not dual class. Like I said, 57 companies, only four of them, have none of these issues. Well, you see that's a problem but to me that represents an opportunity. I've been saying for the, at least the last year now that I bored refreshment is, it's not a negative, it's an opera represents, an opportunity. Well, no I yes, I totally I'm saying like philosophically. Okay. But okay, but I'm saying that then investors and people who care about these boats, they have 53. You're saying they have 53 out of 57 companies, where they can Target directors for board. Refreshment sure what I'm saying, the problem is here, is, I didn't eliminate any companies, like, like as an investor, I'm trying to, like, limit the pool of targeting, so that your workload, reduce your workload, right be efficient, it doesn't reduce it. In fact, all of these companies, have one problem and There were actually several that had all three. Okay, so that's where I started. Okay. I started with the companies that have all three issues. Those companies are gee Uber. Yeah, Arthur Gallagher. Okay, Colgate Palmolive. CSX and wec Energy Group. Okay, wait. So those six companies that all of those problems, okay, all of the problems that wow, like, they they basically have an independence problem. They have red flags on the board and they have investor. They have our board members who do not like, all of the relevant experiences held by just the executives, right? Like not, not the investor, I mean elected. I would I would suggest for any activist who might be listening to the show that, that in itself could be a great, a great flag to Great potential Target for for an activist. Right? When you have so many concurrent problems going on at your board. Like, you just listed seems like a pretty good Target. I mean it's a way to narrow down the list too. Like let's focus on the worst of the worst and then which one of them, you know, is a poor performance that we can unlock value if you're an activist. But for the purposes of this show I'm going to focus a lot on those. All my vote records are going to come from those. As I already a lot of work, six companies and part two. My votes are going to come from just individual director outliers. Who I like, I can't there's a couple of categories and I can't make sense of like, why I hope you at least post this, maybe on LinkedIn or somewhere where people can actually. Yeah, this is gonna be a lot of information. If you're not taking notes, I'm gonna post this on our website, free flow dot LLC. I'll also post it on LinkedIn, so follow us. We can send this to you. All right, but let's start with the, let's start with Arthur Gallagher, just off the top. Okay. CEO. Chair and Gallagher child, Pat Gallagher has 49% of the influence at this company. It's just under totalitarian. It's basically totalitarian. But it's not quite. He's been on the board with David Johnson for 20 years and Bill backs for 18 years with the average company 10 year on the board at 14 years. The three of them control 67% of the board influence and for those, for their efforts on this board, investors have gotten strong TSR and weak earnings which makes me really suspicious like how does TSR outpace earnings, but they've had multiple restatements along the way. In fact, Bill backs himself is over the average mandatory retirement age for most S&P 500 companies. And I think in Easy win here, is you break up the power Trio by bringing some new directors. So, my first recommendation at Arthur Gallagher voted against Bill backs, vote against David Johnson. I had a hero City. Why, why would you not recommend a vote against Pat Gallagher? You can I'm just you know what I think that like too much it's not never gonna happen. I mean, I think like what you I think if you're an investor and you like you clearly like what Gallagher has been doing, right? You TSR has been strong for the company. TSR strong across the directors. So if you like what Gallagher's doing but you're worried about keeping some check and balance guardrails. Then you just putting some guardrails on by getting rid of the two people. He's basically been golfing with for the last 20 years. Like just take them off the board. Yeah. And according to a study, I think you told me that directors, working average of 200 hours a year, right? So there's sounds like there's plenty of other hours left to go golfing with Bill backs. Yeah, and David Johnson, there's a lot of time. Okay. Second up, Uber. Oh yes. All right, so these are all short, tenure directors. Thanks to callinex failure. People have eyes on a board, like I was gonna say corporate a failure of a founder of a failure of corporate governance, basically led to a revamping of Uber's board, right? Wouldn't you say yes and and they brought a quote unquote adults into the room, right? For those of you who are familiar with directors and they have a lot of Heavy Hitters, a lot of like famous quote unquote directors. Yes, famous like seven governance walls that nobody else cares about but they actually those famous directors they put their stamp on this board in a way that we are well past colonic, and it might be time to stop running the board. Like it's children and start running it. Like you want some Independence in there because what famous directors tend to do. And we see this in multiple places is they tend to bring in other famous directors that they know and have worked with before and you End up with boards that are like classic American aristocracy boards, like Boeing and 3M and deer. And we've covered a lot of them in the show but they tend to be these like Middle America, board royalty and that's who runs the company at that point, that's not necessarily what you wanted. Uber. And by, by way, of example, Uber you have Ursula Burns and Ron sugar, Ron sugar? Oh, you might be our favorite. My favorite board member of all time. They actually have seven Loops back to the board. When I say Loops, I mean they have sat on boards with another director somewhere else that Loops back to the Uber board somehow within two Loops within two degrees. Okay, Burns and sugar have seven Loops back to the board. Bob Eckert has five Wang Lin. Martello has five, they're all on the nominating committee. So, what's happening is the nominating committee is choosing its own friends, people their comfortable with and populating the board with them. Most of the time you have management doing that. Now, you have the board members doing that neither case is investors doing that. Where investors are comfortable with the people, sugar actually has higher influence in CEO, Dara, which happens. Really infrequently, and usually indicates a board LED company and that's not great because the boards of sugar has been on have been riddled with controversy and including Chevron and including apples had their issues. He's been on an, he was an Northrop Grumman, the boards of the company he's been on have had usually long history of controversies. It's a while. We might have needed some adults in the room post colonic. I'm not sure that like, we want to compromise Independence on the way to that, okay? 50% of the board influences held by the nominating committee alone. Well, so my recommendation here is to begin the process of breaking up American Royal Board aristocracy, and installing some Independence on this board, vote against Ron sugar. That would be my, my recommendation. It almost seems like to me in these cases where you're cleaning up, messes led by petulant Founders and CEOs, and isn't it funny that I just saw Travis clinic in the news? Because I think he attended Elon musk's anti Biden dinner over the world. But they're almost should be sunset Clauses on the adult directors that you say that brick come in to maybe like clean up the boardroom and to your point. They don't need to be there forever, right? That maybe Like a few years and then get the hell out, right? Get some, get some, have them, maybe nominate some new people and I mean, kudos to them for putting guardrails on what has been a controversial company and was yes. Clan. It was so terrible. Yeah, it was a little bar. What should be happening at Tesla right now but just somehow is not happening. You'll see it happen. Eventually. That's my guess a Tesla. All right, so vote against Ron sugar at Uber. Now gee, gee gee, Ed Garden got on this board via train and Nelson's Nelson Peltz. And in Garden has 12 Loops back to other board members. He's highly connected to the existing board members. His board history includes other, try and winners like Wendy's, and he was at Bank of New York Mellon, it's actually resulted in a negative market cap value added of negative 563 million meaning at all the boards he's been on in the last five to seven years. He's added negative 563 million dollars of value to those companies. So, We have a person who's highly interconnected to all the board members negative value add. And he's sitting on the board with Sebastien bazin who has eight flags for restatements across all the boards that he's been on and Steve Angel, who's a former executive at GE? Okay, try and roll is over here. I think there's a very simple like thank you 2017. You got on this board, you did some stuff ge's getting spun off its all. It's a totally different beast in from when you bought when you bought in time to get off the board so vote against Ed Gardner on the GE board. Okay, now I want to stress something here because I've got a couple more to go. Yeah. I did not do this. I did this this morning. Using our data. Yeah. Wait, a sell your effort. Well, I'm just saying that like, you're saying this could, this could be achieved, this can be achieved, hastily, I reviewed over 50 companies found outlier companies and was able to do deepesh, Dives, and not even the deepest Dives, right? There's a lot more I could do, but I'm not a team of 25 stewardship analysts at Vanguard doing this. If you're listening to show you either need to already be sign up to our platform at free flow analytics.com or and you should be reaching out to us for for further Consulting and the whole the whole data package API everything, its time, its time its time because I managed to do I'm to come up with a vote recommendations Based on data and the morning and a half, we can take the the analysis, the ISS and glass Lewis does to to places that has never has never existed never been achieved. Before one of analysis of a GM vote. What else you have? What else? Right. I got a couple more. Let's do Colgate and we'll do it quickly. Okay, do them quickly and then move on to your outlier because we can post all of the details, post all the details. I, I mean, I think a good one, colgate's interesting to me because this is a board with three ex or current lead. Independent directors on it, lie of Colgate of Colgate, John Cahill Steve sadovy and their newest lead. Independent director, Laurie Norrington. Okay, all Colgate lead, independent directors. All still on the board kale and cydonia have 19 and 17 years of 10 year. Well, at some point, you know, Kayla has actually a negative 3.4 billion cap of value added and a 286 TSR batting average at some point. Don't you say, we really only need one independent lead independent director. I would say, I would be pretty intimidated to be a new director on the board. No matter how qualified I would be you walk. To a board with like 18 formerly directors who've been on the board since 1961. You're a little intimidated to speak up maybe at the first it's not really. Yeah. So I'm saying voting all those just keep the current lead independent director, Laurie Norrington and vote against sadovy and Cahill you don't need all the lead Independence. Yeah it's just one corner. Our data that opens up 28% of board influence. So could you could get powerful new voices in their place? Very powerful. New voice is CSX CSX actually John, Henry's the new. See, it new-ish, CEO 2022. I believe barely eeks out to other directors for influence. He has 17% to Zan Veteran's, 15, and John Silver's. 15 vagina has five free statements to her name and a negative two billion dollar cap value added to boot. There is no one with direct rail experience on this board managing a railroad working at a railroad except for Henry's. In fact, 44 Percent of board. Experience is finance and law. Are you running a railroad? Are you running a law firm? It's it doesn't make any sense. The thing that really got me though is that voch or not who has five restatements to her name, across multiple boards is on the audit committee and she's a lawyer by trade. Vote against xanat starts a breakup. You should, that's 15% of the influence you can unlock and you can add rail experience onto the board, okay? And then finally, for the companies, we see this one really got me because Gale klappa is because they all got you to be fair. But yeah, I mean, like I picked the, I picked like, the data driven. Worst of the worst. Gail klappa is executive chair. And clap has been sitting on the board for 20 years with two other directors who have been there for 20 years, you list Pane and Kurt. Culver, you'll miss Payne is connected to other directors, in 15 different ways on this board. Well, basically you'll just paying is a is just a like a board feedback effect. He's all the pay chair. And pays clapa and the current CEO because clapa is executive chair, right? So the pay committee, chooses the executive chairs pay, along with the CEO's, pay klappa is not a Founder. There is no reason to have an executive chair on this board and unless you hate the current CEOs. Never a reason. Yeah. And pain is the worst performing TSR on the board batting. 418 you vote against pain here and vote against kelapa? I mean, there should. There's never a reason to have your the chair of your board which is there to provide independent oversight of management to be a part of management. Never a reason is never a reason that gets us to direct your outliers. I'm just gonna go through a few of these quick. All right? Here was my my personal favorite. The wire you still here crowd the people that clearly must have just gotten forgot. So that about me a lot in my life. Oh, you still here? It's like like the party happened three hours ago and there's still on the couch and you're you can't try to ask them nicely to talk about you, talking about. Basically, you Us corporate directors though? Let's be fair. But yeah, keep but keep going. So he got these are long tenured, not executive non Founders and I only focused this list on 30 year. 10 year, directors, 30 years, 30 years, okay? Mike Smith 18% of the influence at zebra Technologies, he's the X chair and current lead independent director. He's been on this board for 33 years. He's nominating chair. He's on the pay committee. He's not a Founder. He's not an executive. What are you doing there? Why you still here like, who? Who keeps voting for you? Leo Coleman, 21%, influence Omnicom. Another lead quote, unquote independent director, right? He's on the Nom and comp committees, 31 years of tenure. He's got connections to other board members and he's got the most average TSR you can have 508 to me if you keep the electing you for, if you have the audacity to call yours, if a company calls a independent lead independent director after being on the board for 30 years, that should disqualify there should be there should be some like trap or the SEC gets rid of you because that's even do that in London in the UK. It's 10 years, right? You're not independent after 10 years, this is 30. And then finally David freezer, 17% influence at NVR on the paying nominating committee. Again, another 30 year. What are you still doing here? All right, here's my second group. Okay. The Jack Welch group, Jack Welch famously would fire, the bottom 10% of performers is there like this? Why investors wouldn't do this? Well, this was my original. My original thesis statement, right? If we just Target the bottom 10% of every board, That's that's basically which basically means one director annually. It really sets up a great opportunity for annual refreshment. I mean, you can bring in amazing people every year, right, that bar, that would be great, 10% of every board. I just said the bottom 10% of all boards, globally. I mean, like these are the bottom, bottom bottom of the bottom. This is the bottom 10% of everyone. Let's hear Pete Wilbur. 8% influence on Baxter International. He's on three boards and somehow manages a 102 TSR batting average. Wow, that's low. Three boards, you've had a shot, we've had the three shots to get that up its time and then Norman Wright 6% influence, at First Solar, he's on two boards and he bets 179 for TSR. These are some of the worst performing directors for TSR for investors, for what you care about as an investor in the world. Don't worry about like you know, this board or this the world, the whole world and then finally the over networked and overworked, okay? And this is mostly because I wanted some reason to vote out. Alex Cutler, 22% influence a keycorp, he has 22 Loops back to keycorp. He's the Nam chair and the lead quote unquote independent director he's been choosing his friends for 24 years on the sport. Let someone else shoot some of their friends for the board. Yeah, we're seeing a lot of just in this list alone, we're seeing a consistent misuse of the term leading independent director and and my last one Melanie Healy 9% influence. A Verizon 12 years on the board and 21 board Loops back. So, in summary, yes, I took 54 companies and I found you. I didn't find you, you know, out of the 800 directors, a hundred devote against. I actually just said 16 votes against doesn't that sound reasonable? You can't muster doesn't like like, we've been told it's really aggressive to vote against directors. That is 1.8% of the direct pool. That's like more. I would like more than that. Okay, start, I could have gotten way more aggressive. This feels incredibly conservative to Target these. People sure, Bill backs, David Johnson, Ron sugar, Ed Garden. You'll find the list on our website, if you want the final list. Beautiful. I love this. That's it. That's the proxy countdown for the week of April. 29th 2024. Join us next. week when we jump back into the alternative to see pool Forever on the lookup for shareholder sharks, floating Band-Aids and Wayward directors, she made that Wayward leading dependency