Transcript
This is proxy countdown. Welcome to the Big Show for the week of April, 15th, 2024 alongside my tag team partner. Matt mascardi. I'm Damien Ralph and today is countdown big changes at Tesla including a petulant proxy statement. Comcast finally appoints a female director with media experience. Proxy contest chaos at Macy's and crown castle. A detailed, look at the final vote results at Disney and on the big vote. One of our favorite Chicago, Mafia companies, Abbott Laboratories. Get to our trade wire. Our top stories. Two of Tesla's, top Executives have left. Company in the midst of the carmakers largest ever, round of job Cuts as slowing electric vehicle, demand leads the company, to reduce its Global head count by more than 10% oh our senior vice president Drew Bagley. No one of the named executive officers who co-hosted earnings calls and share the stage with CEO, Elon musket, multiple events in Rohan. Patel the carmakers vice president of public policy and business development. JPMorgan Chase announced that two of its directors, Timothy Flynn and Michael Neal have decided to retire from the board at the, company's 2024 annual meeting of shareholders, meaning that its board will officially be half, man, and half women. At Brown and Brown. Were 73% of board influences by father and son. Chair. Jay Hyatt, Brown and CEO. Jay Howell Brown the J Browns. James Hayes and his two percent influence. One of 12 other, non powerful non Brown family member board members has stepped down what a loss. The company also announced that it has purchased a new stapler for one of its medium-sized conference rooms, really just one. And lastly Comcast Corporation has a pointed a fourth woman to its board one ya Lucas Female influence on. Comcast board is woefully low at under 10% combined. One ya. Comcast, first black female director will be the only woman on the board with actual media experience as she was previously. CEO of Hallmark media Networks, Let's get back to our, let's go over our proxy cage matches. Let's get back to our non-disney proxy cage matches. Yes, the Disney proxy cage match is finally over, let's go to Macy's, Macy's proxy contest with Ark house is over as Richard Clark and Richard Marquis to Richards have been added to the board. The company also added, its own nominee, Douglas sessler. While board chair. Jeff Jeanette. Step down along with finance committee chair, Francis Blake. There are now 15 mace directors, Matt which may explain the rather confusing and overlay out of his department stores. It was a lot of boys, moving around. Just now Chaos. Also continues a crown castle as Stephen muskovitz has been named the new permanent CEO emitted, ongoing proxy contest, where company founder, Ted Miller in Boots, Capital Management have nominated. Four directors to the crown castle board. All four nominees are men, of course, and one of their opposed nominees as a woman. So if the proxy contest is successful, the crown castle board will consist of 10 men in only two women. Notably. Two Boots nominees are older than the company's director, retirement age. And a third nominee is within one year of the company's director retirement age. There you go. Apparently they didn't they don't require that you read bylaws before you actually file the contest and finally Tesla Seems to be begging for some kind of proxy contest at its upcoming annual meeting as it taunts. Skeptical shareholders by calling for the re-election of two of its quote, hardworking and dedicated directors, Kimball musk and James Murdoch and quote. Asking shareholders to approve moving Tesla state of incorporation from Delaware to Texas and to re-ride. Elon musk's 2018 compensation package that was recently rejected by the Delaware Court of Chancery and judge Kathleen. McCormack look, I don't want to spend a lot of time with this, because we will eventually will this? Um, but I will say re-electing kimbal musk and James Murdoch would basically just suggest that investors don't care. Ever anywhere about any director that ever gets voted onto a board? Wouldn't it wouldn't like we shouldn't be doing this show Issa, don't need to exist. Who needs our data set like its bananas. That this is even a question because dedicated and hardworking are not the skills that are the overriding skills to be a board member when it's really, brother, and friend, that is the adjectives missing. I was gonna say, hardworking doesn't usually go along with two of America's greatest nepo babies Murdock. Let's move over to our vote results table season is really starting to pick up. So we have a lot of large cap companies to report on. Let's start with the big boat at Disney. Here, we're trying funds was officially defeated so. So here's the, the final vote tally. Nelson Peltz received 31% support while Jay rasulo received a paltry 12%. Not saying a lot about J. Their Blackwell's nominees were basically ignored. They all received roughly 2% of the vote. As far as Disney directors go. CEO Bob Iger received 94% support Which is telling considering that Nelson, Peltz received 31% support, while Triumph, Target, Mary Maria Elena like a Messina received 63% support two other generic Targets. In this proxy, contests were chair, Mark, Parker and Michael Froman. They each received 88% of the vote and finally 20% of Voters rejected to say on pay. While the two anti-esg Charlotte proposals, both received average support of about 3% of The Lunatic Fringe of Disney for Cheryl holders, you buried the lead here which Blackwell's nominees Greg hatkoff got 2% lease, solivan got 2%, Jessica shell, got 2.1%, that's called the proxy countdown bump. That was us. Yes, that's entirely us. We pushed Jessica show. We pushed kind of all the black ones but specially Jessica show. So that point. 1% is the free float vote that. But you really can see here that like this, the vote was just taking bites out apples. It was pellets got 31 and log of Messina got 63, it was basically. That's if you were gonna vote for pelts. It was coming from Lagos vote rasulo, got 12 and from and got 88 if you were voting for rasulo it came from Romans vote. Parker is the interesting one but you had no just say that they were going to support Parker. This guy right here, I was exactly right. So I'm gonna say that like the 88% roughly 9% of, that was because of norges and roughly point, one percent of that was the Damien. Well, I Say this. I as a final word on the, on the vote of Disney is that if a shame on you Nelson pellets because you kind of ruined this, if you didn't open your mouth and Reveal Your racism and misogyny and you didn't appoint a fellow director, Jay rasulo, who was just a suckiest Choice ever, this actually could have been an interesting contest but you just sort of your ego just kind of blew it. I mean, really, that's the read. In fact, like, if not for pelts, we would be having a totally different conversation about Disney. We would have suggested voting out how this board, they're cozy, they're insular, there's skills gaps, listen to the show, but yeah, he ruined it, he blow it because the key number here, which which sums up how much he did blow it and how it was an anti Pelt vote is CEO, Baba. You're getting 94% 94.94. Synopsis voted synopsis, 20% of Voters, said, no to Bruce chishen. Well, 15% of Voters rejected, Janice Chafin. Despite this unrest, only 33% of the vote supported a shareholder. Proposal calling for an independent chair. I don't really Get that. I don't, I don't really understand what Cheryl's would ever vote against having independent chair. I did that, I totally agree with. I don't understand. In fact, when we talk about Abbott two years ago, they had the same vote and shareholders rejected that too. But I maybe this was just an anti last names that start with ch vote. Shareholder, proposals fared. Well, at Lennar after adjusting for CEO and chair Stewart, Miller's 38%. Voting power. All three proposals would have passed a report on political spending a report on lgbtq equity and inclusion efforts and its human Capital Management strategy and a report on the company's plans to reduce greenhouse gas emissions all would have passed without you know this one man controlling most of the will, it's so fun to allow one person to control what every shareholder thinks something interesting going on at AO Smith all six Class A directors were reelected with ease. As the Smith, family controls 97% of Class A shares. However, shocked common stock doctor's were met with investor anger, although I can't really quite figure out why as Victoria Holt and Elam Cadre. The only two common Stoke female. Directors each received a majority of votes against their re-election. So I don't really quite know what's going on. AO Smith to put that in context, that happens, 0.2% of the time, Global votes. That's super rare to get a majority against except at AO Smith since there was a plurality vote standard. That means that the even if you only got one vote, you get reelected because they just take the directions with the most votes and since it's it's not an uncontested election, you know, there's only four vote directors up for four seats. It doesn't really matter. You just need to go for bylaws. One vote. And finally, Shareholders are basically content or not paying attention at. Healer Packard Enterprise the Bank of New York Mellon and Matt's favorite Carnival Corporation, what there was no free float bumper Carnival, nobody really shocking. All right, let's get over to our big vote. We have an annual meeting coming up at on April 26th, that's next, week Abbott Laboratories, I don't Look, I'm looking forward to your dissection of Abbott Laboratories. One of our favorite Chicago Mafia companies, and you can explain why that is when you get to your analysis. But you know from the from The Outsiders perspective, there's not a ton going on here, it's kind of a typical ownership structure. The main two owners are BlackRock and Vanguard group around each with around 10%. There's a bit of a diversity power Gap here, which is a, I mean, a bit concerning. So that so the diverse directors represent 25% of the board, but only 11% of actual influence. So suggesting a little bit of tokenism when it comes to racial board members at Abbott, other than that, the one thing I want to pick out, I don't know if you have any insight into this. Is that there actually are some notably High vote against three directors, that's lead director, Nancy mckinstry. She got 25% votes again last year, which is extremely high in the S&P 500. And in fact, she has been over 20% against every year since 2020, which is a lot. I mean, shareholders clearly don't like Nancy mcenery. Also this year, Michael Roman 16% against, and John Stratton 28% against, so Shareholders are kind of paying attention about some things that Abbott Laboratories, which is interesting. Let's say not okay, go ahead makeover. All right, so first of all, there's a lot, the shareholders could be paying attention to an angry about this. Stock is the performance of the stock is something. No one would be happy with, they've underperformed, the S&P 500 over three months. One year, two year and five year time periods. Dave just under and you can kind of roughly see this if you look quickly at our performance indicators, the overall board is hitting 524 and earnings but only 439 in total, share the return suggesting that the directors are kind of leaving some shareholder money on the table, right? Like they're kind of squandering something, maybe potentially not only that, not only that, this is all. So, a company that is under a tremendous amount of scrutiny given recalls, on infant formula, there was, there were contaminated formula, there were issues with supply chain. And remember, during the Pandemic that Abbott was at the center of that. There's over a thousand outstanding legal cases on the last earnings call. They were asked about it directly when they think they're going to see some resolutions and they were optimistic quote, unquote, that they would get some news soon, which, but, but there's a lot of things Weighing on Abbott as well, as long alongside like, you know, recalls for devices. They have they have some issues, right? The board is a monarchy that a monarchy is a widely held company where the CEO has a majority of influence. It basically means you sort of have CEO Kings, right? That would be Abit lovers. That would be Bob Ford, he controls 21% of the influence and he's the chair and the CEO. So he yeah. So Matt just to be clear he is he heads the oversight board that is meant to oversight himself, that's what it means when a CEO is all. So, the chair, my favorite thing is, when I Think this is typical but I still like seeing it. When you they Abbott shows you the number of meetings that each committee had and they have an executive committee of the board and the executive committee met zero times in 2023 zero times. And I got, do you need to meet when you have Bob Ford kind of taking care of everything. I suppose not. I suppose. I mean, really, it would have been the meeting really would be bought. What Bob Ford is thinking at night, at that moment, right? Like or whatever wherever he is, I wrote something down. Let's do that. But here's your last vote for your 2020, vote overview. The reason why Stratton and McKinney got negative votes is because they crossed the glass Lewis ISS threshold for overboarding. All right, too many boards between the two of them so that was very much a policy vote McKinney Street is on. She's been on too many boards since before 2020. In fact, you go back in time. Mckinstry is part of Group of directors that include the Boeing circles that include 3M circles. She is actually a longtime board member and a well-known board member across these groups. So, these votes are actually reflect crossing a policy threshold, which is the count of boards that these people are on. But don't worry investors. Because at Abbott Labs, they're actually aren't that many meetings at these directors have had anyway, Roman Michael Roman, who's a CEO of 3M, is a mystery vote but I'm guessing it's for the similar reason. There's some policy that got triggered somewhere and I couldn't put that one together, but I did find the overboarding threshold for Stratton McKinney. But this year, for this year, our recommendations, the analysis, I would tell you that you should totally ignore. Anything about overboarding, anything about coziness of the board or anything about overboarding. Anything about like policy, focus on the coziness of the board and focus on performance gaps. So that's what we're gonna go. Let's do it. All right. I want to say that this is basically a foreshadow. What we're going to see at Boeing and what we would see if we did 3M. There is this old school, and we've talked about it before American board aristocracy, right? Like there's the board bro culture. It's mostly Bros, obviously, but this old culture and we lovely have been calling it for years, the Chicago Mafia. That's yeah no. Not only because of the overlaps, you see, on the actual public company boards but when you dig deeper you see them on just about every Civic board, known Chicago, it might even be like the Chicago Cubs Cracker, Jack peanuts board, whatever it is. Here, there there together hanging out. That's what so that is, what I'm calling the cocktail Loop, right? As in whatever you want to call it, they're their economic Club of Chicago, both O'Grady who's on this board and blunt. Who's on this board are also board members of the economic Club of Chicago, the Minnesota Business Partnership, Roman microban and Starks are on that board. The of the Minnesota business, this repeats Ad nauseam. And by way of example, it's very specific to the Midwest. Like so I would say, direct Chicago influence on this board. Meaning people who like live in Chicago work for companies in Chicago represents, 44% of board influence, nearly half of the board influence is in one city. Yeah, state or country, even reach, whatever. And don't forget that. These directors don't work full time for the company. They don't like, they have to be in Chicago. Right? I mean they could come from anywhere. Oh, 100% or directors. Like you know, Boeing just hired, you know, to their credit their first International director. You have international directors. It's possible. I'm just saying it's possible. Yeah. At this board, you are talking about the CEO of Northern Trust which is based in Chicago, the CEO feeding America based in Chicago. A professor at Northwestern Kellogg School, it's in Chicago. Like, and then there's the soft Chicago links, what I'm calling indirect Chicago, which is they went to school at Northwestern or they're based in Illinois, an hour from Chicago or they're in like, Gino in Wisconsin, right? Yeah, like that kind of thing. You're when you're if you're within like two hours, you can drive to your board meeting, right? That's the that level of influence 51% of the board which means 905% of the board influence. Is effectively two hours around Chicago to two and a half hours, and look. And people from Chicago. They had this term called Chicago land. So you basically, so it's like Chicago. Land is what you just described, right? It's Milwaukee, its northern Illinois. It's it's basically everything within a quick drive. So, you're right. This, this is why we call Chicago Mafia because as you're saying 95 is it. 90% of influence is represented by the Chicago land director, which is only one directors that does not does not live in Chicago land. And those are like the just the Chicago Loops, right? Let's I want to talk about Network loops. There are like hard connections as in people, these directors, who have sat on other boards with them each other, right? Or they know each other through a friend, like where they there's overlapping time with that friend, on a board there for Abbott Labs, they have 182 Loops between director, a and direct your B. Well from Abbott Labs to Abbott Labs. Since 2010 182 times in our database does a direct Abbott Labs, have some connection to another director at Abbott Labs through directly or through a friend, right? That is a monstrous amount of Loops. Yeah. If you, if you do the math, it's 14 years. That means like, on average, you're talking about many Loops per year. Yeah, in fact, this year, five of the current board members have loops. In fact, only one current board member doesn't Loop through a spin-off of Abbott Labs that spun off years ago, through ABV. So these are directors that sit on boards with somebody at Abby. Who knows somebody who they know, right? Like this is that's it. It's it's really these are closely related directors and and that's just a hard one. So he's so these are directors who Were let's paint the picture. They live in Chicago or work around Chicago. They actually are on boards with each other or have all their friends are on the same boards and then there's this, this is something new. I want to introduce this week called Soft. Connections soft, what's a soft connection? Like a soft press? So yeah, it's exactly. It's like Chicago White Sox game. The White Sox. Sorry, they'd be, they'd be at the Cubs game. The Cubs game. Uh, no. I want to introduce the concept called modularity. Okay. So um, when you are, when you sign up for LinkedIn or Facebook, well, you're deep unfit, you're you're constantly posting. I'm deep on all social media. Yeah, exactly. So there's math that you can use in a social network if you're a node and I'm a node in this network. The, the line between us, the relationship between us would be an edge because we work together. That's that's like no to nodes straight up. Well, why don't you do that across a really large Network? You can count all the edges and you can count the length between people. It's like the Six Degrees of Kevin Bacon. Sure, right, well, there is a algorithm that will effectively say How can we cluster people who are closely related but not directly related? Okay, that is a community. So when you're on LinkedIn or Facebook and it says, oh, you know, Matt you might also know Francis because Matt knows Francis or two degrees removed from them, right? It reminds me like of like going to a party at College where you walk, you kind of like feeling a little fear going. Well, I know anyone but when you walk in every one kind of looks like smells like you feel comfortable, right? Exactly like this is my place. These are my buddies. They think of this as going to bet aside or whatever that no. Uh, so we can run this for boards. We run this across 220,000 directors since 2010. Okay? So we got like 15, 16 years of data in here and a whole lot of directors, including we add in 40,000 NEOS and we can do things like not some nonprofit boards here and there when we can get the data. But when we run this and we look at Abbott, what we find is 92% of the board members of Abbott Labs. Are in the exact same board community. So now, you have 92%. You have people who live in Chicago or the Chicago area effectively running this board. They are on boards with their own friends or together and all of their friends and each other live in the same board communities. They all know, like, they're all like, they could show up at a party and be like, hey, aren't you? So, and so, yeah. We know. So, and so together, let's fist bump and have a beer. Yeah. That is the board that has been elected here and that is the history of the Abbot board. When Mi white was a CEO and chair, it was even worse. They had Bill Osborne on the board. They've had they've had some of the most interconnected board members in our database, run through the Abbott Labs board. So that's what you're seeing. This seems like a bit of a shareholder risk. That should be listed in 10k that that if there are poison hot dogs at Wrigley Field all over our board might die together at once. Right? No, except for one. Well, the riskier is group think, I don't know that it's poison hot dogs, but they are all going to Wrigley. I don't, who is this lone member? Who's not part of this group? Do you have that name? The lone member who is not in the Stratton is the one who's not in the Chicago Geographic because the only one John but he does have a board connection so even though he's not in Chicago he has a board connection back to Abbott so there is no one on the Who isn't connected in one of these ways. Same Community. Same, actual, geographic location. This is this is why we call the Chicago Mafia companies. Yeah, exactly. Combine all that with the fact that you have for six of the board members, a gap between their earnings batting average, and their TSR batting average are I'm sorry, they're controversy about controversial. This is a big one. So we have found when several companies that when you often see a lower TSR compared to earnings often, the reason is controversies Right off in a drag on earnings. I'm sorry on. Yes, on earnings, which result in a low TSR. So here's what you would expect. If you have high earnings, but a lot of controversial activity going on One of the things that you can see is how these controversies actually manifested to hurt earnings yet. Right now what we have is a bore a team full of people who are really good at making short-term money, But are really bad at these controversies that keep reoccurring. In fact, when you look at the other boards that they've been on, like Boeing the inside the, the loops here are bowing, which do we need to discuss the sort of long-term Ridiculousness at Boeing. That's, that's resulted in it. Being one of the worst companies in America and 3M, who had to settle a multi-billion dollar lawsuit for its earplugs. Because it took a shortcut Soldier plugs to the United States military and are in the process of basically trying to clean up a giant mess. What you're seeing is lots of short-term decision, making that results in high earnings for these people and off can translate to high TSR but we're seeing the controversies performance of these directors underperform and the recycling them so the cultures not changing, right? Yeah. And and brings up something that you've mentioned in the past. Both Boeing is a instead of having Engineers on the board. They have a lot of marketing expertise, right? Which which are people who are good at short-term thoughts, short-term sales, short-term earnings, right, that's right. And when you mentioning skills here, right? Like the, the skills on the Abbot board actually mirrors what you're talking about. And I like to think of it this way, if you pull only people from Chicago, What kind of people like, if we're in the Boston issue area, right? Like we kind of associate, Boston this year in Bain, I'm in Connecticut. Yeah, if we were to pull only people from Boston, you'd get a bunch of dudes named Sully and they probably are all like anesthesiologists, like smart people bosses known for smart people. A lot of colleges in the area, a lot of bio-tech a lot of, you know, medicine is a very smart people. Matt. Sure. And and a lot of dudes named Sully, we don't usually see Sally on boards. If you buy that same thing thinking that Regional almost parochial thinking if Abbott Labs keeps pulling from the Chicago area as a Chicago land area and maintains a Chicago Mafia where they're all connected. What kind of skills do you expect to see? Except the kind that exists in that area? And of course, I'm thinking of the joke of the Clark Griswold from the vacation movies, a famously located in Chicago, where Clark was this kind of buffoon guy in marketing and say like he would he they're always going to these funny scenes in the office where they were selling something stupid or marketing. Something stupid or that's what Chicago's kind of known for guys, like Tommy Boy, marketing, dumb things. Yeah, but but what you see is 66% of the influence on this board is retail manufacturing and Consulting. There are a lot of Head Hunters Consultants like Midwestern manufacturers, they're all there 2/3 of the board is basically that I'm still say, yeah, 13% of the board is finance or some Finance background. Only 19% of the influence on this board is biotech and healthcare for a biote. Can Healthcare company and that's without the executive. That means the executive is the largely. The only person in the room who has biotech manufacturing experience, no one else does. We said this with Disney? Yeah, it's the same thing. And didn't you ironically, didn't you say that one of those people with biotech Healthcare experience? Is someone from New England actually from yeah, the only person with the biotech experience is from Yale. He's a doctor from Yale, and he is 73 years old and his, the longest tenure director, which means if you get rid of the longest tenure, directer, because he's been there since 2008 and say, okay, your time is coming on, it's you've done great service. Thank you, sir. For your service fist, bump on the way out. You're left with zero, zero biotech experience on or Healthcare experience to put in contrast. Right? Bristol Myers Squibb, who's one of their biggest competitors? A third of the board are doctors. One third of the board. And not only that, they're based in New York, they have doctors from. They have people from Chicago, they got people from Boston. They got an international person. They have people from all over on that board. Now Bristol, Myers squibs doesn't necessarily like in the short term hasn't been outperforming Abbott Labs in terms of stock price, but in terms of thinking, at least they've got a different group going, he's got a little bit of diversity of thought. So here's my recommendation. Let's do it. You're in a rock, and a hard place, given the skills, given the connections, given the Chicago land Mafia. How do you do this? I think it's a multi-year process. I think you have to vote some people out this year and then you have to there's a second year, you're going to have to keep cleaning up this year. I think your vote is against a director named cumber. Michelle kumbier, she shows up in the most links, back to this board, she actually Bridges, the gap between the miles White Years and the current years, she's High influence and she's part of that overweighted skill set of manufacturing. In fact, she works at like lawn care. I think they make like it's not like deer. Like they do like, you know, hand, you know, zappy things, oh they're cutting things and stuff. Like, as far as Chicago Mafia guard goes, she's Bridging the old and the new and and she's part of the old culture and I don't think it makes sense for she doesn't need to be there any longer. I don't. I don't think it makes any sense. Notary with you. I also think you vote against Stratton Not only is he a link to the past, but he is overboard, and he has a gap in performance, a really big earnings controversies Gap. I think you're voting in that case, you're voting for to start replacing some of that short-term thinking, and start thinking, long-term, let me let me add one name to the mix. That's because you mentioned 3M. So, I want to mention Michael Roman, who already got 16% votes against the last election. He also sits on the board of 3M. And according to our metrics, he is hitting 7:38 and earnings, which is extremely high, good for him. But only two to one in TSR I say, get rid of Michael, Roman two, right? Why don't we need a 3M? Why do we need a guy? Another guy Laden in controversy? This guy's hitting zero point, zero, 3031 and controversies. Yeah, he's on 3M and Abbott Laboratories. I don't think we need my Coloma, so he Roman and McKinney Street are my year two's. Okay, thank you, they're both gone. And I think when You're thinking of this, what you're doing is, you're making places, you're opening up spots to add doctors Healthcare, non Chicago, for those. Yeah, the things you need, for those of you who listen and think that our data, or our point of view is too aggressive. This is not about voting out directors. This is about what Matt just pointed out, which is opening vacancies for refreshment, for bringing on skill sets which are important for your company. This is not a personal Vendetta know, I don't know, no one's feeling is gonna get hurt. These people are gonna be okay, they'll get other the they can get a direct or strip at the Chicago Opera. I don't care. They can go sell, they will survive, they'll sell some more fertilizer and make some more, they'll survive. So this is, this is really an opportunity. People always characterize this. As a negative thing. This is actually an opportunity to create board refreshment with, with sound data and analytics and Not just kind of an old-fashioned policy that was invented 20 years ago, where you target directors who stand on our left foot for eight seconds or yeah, right? All right, so to sum it up, I'm voting against Cumbia and Stratton this year. I'm going against Roman mckinstry next year. And I'm not voting against them. I'm voting four new skills, and for new Geographic, diversity and mental diversity. Before we wrap up, there are no Sherlock. Proposals at laboratories, his first pay goes, I don't know what to say, anymore, the S&P 500 companies, other than the fact that these CEOs make an extraordinary amount of money. I, I could dig into the policies here, but when you see a CEO making 23 million dollars a year, I don't even know if I need to go into the pulses anymore to served how to me. You know, this is one where I would vote against pay, not the pay people, okay? I would do it for this reason. I can't figure this out and this might happen all the time and maybe I just noticed it, maybe I'm an idiot. Any O's here are held to the same sort of targeting standard that the CEO is that's that happens all the time. I don't remember a place where in Neo. In this case, there are two or three but the nutrition executive. The guy who leads the nutrition division, got his Target ended up at 96% of Target, right? So below 100% annual award for his annual award 96%, but the CEO got 112%. So, Ford got himself 112%. How can the CEO ever get a Target above, what the NEOS isn't his, isn't he? The reflection of the worst of the Neo? His job, in fact, 10% of the CEOs, annual bonus is something called human capital metrics, which is in the goal is to meet talents succession planting and diversity targets. So it would suggest right there. That, yes, Matt, that is part of his job. The one of the problems with these PayPal packages, that, if you're going to pay someone 23 million dollars a year, can you do Better than than kind of soft telling us some kind of soft targets. Could we see some actual metrics and numbers? Because as an example, for the human capital metrics, the CEO achieved this with, that's all it says achieved. And as an example, Executive Vice President, Daniel salvadori, he mostly achieved this and tell you why they just say achieved mostly achieved like it really. If you could be giving up this much of money, just tell us, show us show us today. Let's the second thing. And I did like way back in the day, maybe seven, eight years ago when we were back at the mothership at msci. I did show about peer groups and here's another case of pure groups, where I looked at Abbott's peer groups, they chose for pay and this is common. This happens all the time. When you look at the sizes of the companies that they chose, they make the median of the companies. Equal almost exactly happened. They're very like, you know, they're not gonna like pick companies like all over the place that Like you know to make it a big skew except that they do skew the companies. And what they do is they tend to put a number of companies that are way bigger. Yeah, in fact, when you run the SKU numbers, the median is almost exactly Abbott but the tail of the distribution of size of the companies is bigger. It skews, larger, meaning, if you want to increase your pay but do it. Subtly make the median of the peer group that you self selected through a consultant, equal your company but choose large companies that pay a lot more on one end and the small companies on the other end. You make sure that they just make the median, right. I was gonna say anecdotally, it seems like Microsoft is just magically and everybody's peer group. Yes, somehow. I mean, in this one, you have Coca-Cola like because babies drink formula and and Coca-Cola eventually. I don't. How does that work? Let me add one of the thing here before we're wrap up. And this is how absurd the state of pay is in the US for CEOs, is that it's worth remembering. Ah, that, I'm looking at the long-term incentive Target, which for the CEO. Bob Ford is roughly 13 million dollars, right? 13 million dollars. No matter how poor the results are for this given year. It can't be less than 75% of this target. That's which something is a number, is pulled out of thin air. This 13 million dollars. So 70, he he hit 75% of this target if he screws up everything, which means that it's basically guaranteed Equity at 10 million dollars a year. No matter how bad, no matter what the hell is going on. Yeah, that's guaranteed pay. And that's, that's that's out of the realm of like comedies in Seattle. I'd say, I will forget decency. I think it's one of the greatest polls that you've been doing over the past year. Which is, if you want to talk about the meritocracy you want to talk about holding people accountable, you want to talk about performance, These people are getting paid. They could their performance. Could be the zeroth percentile zero. The absolute absolute bottom of every Target on Earth. Every time every TSR Target you could possibly lay out, still get 75% of their target. Not just not just that everything you could miss, you can miss cash flow, you can miss earnings per share, all of them and you still you gonna get 75% of that. So then that point at that point, why are we what are we doing? What are we doing? Why are we even setting pay? You might as well just give them the money. You could just say we guarantee that if you're CEO or an executive officer here you're going to get about 20 million dollars. So it's just stop talking. I mean in any other industry if you ranked in the zeroth percentile of everything you did would you get 75% of Matt even in the world where people are launching their body's at you and you're getting concussions and you're breaking your leg every day. They can even cut you though. That pays not Indeed. Now I know most of it's not guaranteed, no athlete. Is if you're like, the there are few athletes that are all right. Way off, we're way out the truck anyway. So I say, in this case, you're going to vote against pay forget the committee because we have other board problems to deal with. Which this is a good time to vote against just the pay. And it's not because it's just egregious stocks. And we got to be asking questions about like, how does the Neo hit a higher Target or get a lower Target than the CEO? Who should be held to the minimum standard? I think is a rule. You want to set up a policy rule, whatever the lowest ano performance is by Target, that's what the the CEO should get like they no matter what the other metrics say because that doesn't make any sense. And there's so many things wrong. So I say you vote against pay you vote against Michelle. You say vote against Nancy mcenery Michael Roman? Yeah, that's the proxy. Come down for the week of April. 15th 2024, join us. Next week, we jump back into the alternative democracy pool Forever on the lookout for shareholder sharks floating band, aids and Wayward directors.