Press Release

Egan-Jones 2016 Guideline Changes Implemented

Haverford, PA -- Egan Jones Proxy Services ("EJPS") today announced the implementation of changes to its proxy voting guidelines for the 2016 Proxy Season.

According to Magda Pacheco, Manager of Client Relations at EJPS, "the 2016 Egan-Jones proxy guideline policy changes and updates reflect the wide scope of subjects we examined closely in light of the previous proxy season, important literature on the subject matters, and in-depth discussion within EJPS." The changes and updates include:

  • Overboarding - Perhaps the most interesting and significant guideline change is the implementation of an 'overboarding' policy for CEOs. Overboarding refers to board members who take on too many director commitments simultaneously.  Directors owe a fiduciary duty of loyalty and care to the corporation and stockholders they represent, both to their company of employ as well as outside directorship commitments. Failure to live up to those commitments (breaches of that fiduciary duty) can lead to civil penalties. We believe that introducing a threshold of one outside directorship should greatly contribute to a CEO's commitment to fulfilling his or her role and responsibilities to the company of employ and its shareholders. Thus, EJPS recommends that shareholders WITHHOLD votes from a CEO if he or she holds more than one outside public directorship.
  • Underperforming Board - We have decided to take a very strong approach linking a company's compensation rating result and recommendations on compensation plans with recommendations on compensation committee members. We will recommend that shareholders vote AGAINST compensation committee members if the company obtains a score of either "Needs Attention" or "Some Concerns" both of which are the lowest possible scores on the Egan-Jones Compensation Rating model
  • Shareholder Proposals - Lastly, we have introduced numerous new shareholder proposals regarding health, GMO products, greenhouse gas emissions, recycling, energy conservation and other social and environmental issues. These have been added to all versions of Egan-Jones' Proxy Voting Guidelines.

See detailed Additions and Changes to the respective Guidelines below:

Topic

Standard

Taft-Hartley

SRI

Catholic

ADDITIONS

I. DIRECTORS

 

 

 

 

Separation of Chairman and CEO

WITHHOLD votes from Chairman of the Board if he also serves as the CEO and the company receives a poor Board Score.

no change

no change

no change

If the CEO is on the Board of Directors

WITHHOLD votes from CEO if he holds more than one outside public directorship.

WITHHOLD votes from CEO if he holds more than one outside public directorship.

WITHHOLD votes from CEO if he holds more than one outside public directorship.

WITHHOLD votes from CEO if he holds more than one outside public directorship.

Number of public company directorships

WITTHOLD votes if a director sits on more than six other public directorships.

WITTHOLD votes if a director sits on more than six other public directorships.

WITTHOLD votes if a director sits on more than six other public directorships.

WITTHOLD votes if a director sits on more than six other public directorships.

Independent director - clarification 

should not be the founder of the Company

should not be the founder of the Company

should not be the founder of the Company

should not be the founder of the Company

Underperforming Board Policy

WITHHOLD votes from Compensation Committee members in cases when a company obtains a questionable score on the Egan-Jones compensation rating model.

WITHHOLD votes from Compensation Committee members in cases when a company obtains a questionable score on the Egan-Jones compensation rating model.

WITHHOLD votes from Compensation Committee members in cases when a company obtains a questionable score on the Egan-Jones compensation rating model.

WITHHOLD votes from Compensation Committee members in cases when a company obtains a questionable score on the Egan-Jones compensation rating model.

A vote "AGAINST" the Cash Bonus Plan will consequentially give the Company a negative adjustment to its Board

A vote "AGAINST" the Cash Bonus Plan will consequentially give the Company a negative adjustment to its Board

A vote "AGAINST" the Cash Bonus Plan will consequentially give the Company a negative adjustment to its Board

A vote "AGAINST" the Cash Bonus Plan will consequentially give the Company a negative adjustment to its Board

• WITHHOLD votes from members of the Compensation Committee

• WITHHOLD votes from members of the Compensation Committee

• WITHHOLD votes from members of the Compensation Committee

• WITHHOLD votes from members of the Compensation Committee

Board Accountability

Case-by-case basis for the following:

Case-by-case basis for the following:

Case-by-case basis for the following:

Case-by-case basis for the following:

• Evidence or belief of failure of the board to properly account and prepare for risk (i.e. carbon or cyber issues)

• Evidence or belief of failure of the board to properly account and prepare for risk (i.e. carbon or cyber issues)

• Evidence or belief of failure of the board to properly account and prepare for risk (i.e. carbon or cyber issues)

• Evidence or belief of failure of the board to properly account and prepare for risk (i.e. carbon or cyber issues)

• A low board score, coupled with poor performance.

• A low board score, coupled with poor performance.

• A low board score, coupled with poor performance.

• A low board score, coupled with poor performance.

• Legal or ethical problems in the company or its management.

• Legal or ethical problems in the company or its management.

• Legal or ethical problems in the company or its management.

• Legal or ethical problems in the company or its management.

 

II. SHAREHOLDER PROPOSALS

 

 

 

 

Shareholder Proposal on GMO-Related Issues

AGAINST Shareholder proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products.

AGAINST Shareholder Proposal that requests the Company prepare a report, at reasonable expense and omitting proprietary information, assessing actual and potential material financial risks or operational impacts on the Company related to these genetically modified organisms (GMO issues)

AGAINST Shareholder Proposal that requests the Company prepare a report, on the social, health, and environmental effects of genetically
modified organisms (GMOs)

AGAINST Shareholder proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products.

AGAINST Shareholder Proposal that requests the Company prepare a report, at reasonable expense and omitting proprietary information, assessing actual and potential material financial risks or operational impacts on the Company related to these genetically modified organisms (GMO issues)

AGAINST Shareholder Proposal that requests the Company prepare a report, on the social, health, and environmental effects of genetically
modified organisms (GMOs)

FOR Shareholder proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products.

FOR Shareholder Proposal that requests the Company prepare a report, at reasonable expense and omitting proprietary information, assessing actual and potential material financial risks or operational impacts on the Company related to these genetically modified organisms (GMO issues)

FOR  Shareholder Proposal that requests the Company prepare a report, on the social, health, and environmental effects of genetically modified organisms (GMOs)

FOR Shareholder proposals requesting that a company voluntarily label genetically engineered (GE) ingredients in its products.

FOR Shareholder Proposal that requests the Company prepare a report, at reasonable expense and omitting proprietary information, assessing actual and potential material financial risks or operational impacts on the Company related to these genetically modified organisms (GMO issues)

FOR  Shareholder Proposal that requests the Company prepare a report, on the social, health, and environmental effects of genetically modified organisms (GMOs)

 

AGAINST Shareholder Proposal proposals to eliminate GE ingredients from the company's products, or proposals asking for
reports outlining the steps necessary to eliminate GE ingredients from the company's products.

AGAINST Shareholder Proposal proposals to eliminate GE ingredients from the company's products, or proposals asking for
reports outlining the steps necessary to eliminate GE ingredients from the company's products.

FOR Shareholder Proposal proposals to eliminate GE ingredients from the company's products, or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company's products.

FOR Shareholder Proposal proposals to eliminate GE ingredients from the company's products, or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company's products.

Shareholder Proposal on Greenhouse Gas Reduction

AGAINST Shareholder proposals requesting that a company adopt GHG emissions reductions goals and issue a report by at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

FOR Shareholder proposals requesting that a company adopt GHG emissions reductions goals and issue a report by at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

FOR Shareholder proposals requesting that a company adopt GHG emissions reductions goals and issue a report by at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

FOR Shareholder proposals requesting that a company adopt GHG emissions reductions goals and issue a report by at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

Shareholder Proposal on sustainability Report

AGAINST proposals that request that the Board prepare, at reasonable expense and omitting proprietary information, a sustainability report.

no change

no change

no change

Shareholder Proposal on Tax Payments on Restricted Awards

AGAINST shareholder proposals to adopt a policy that the Company will pay the personal taxes owed on restricted stock awards on behalf of named executive officers.

AGAINST shareholder proposals to adopt a policy that the Company will pay the personal taxes owed on restricted stock awards on behalf of named executive officers.

AGAINST shareholder proposals to adopt a policy that the Company will pay the personal taxes owed on restricted stock awards on behalf of named executive officers.

AGAINST shareholder proposals to adopt a policy that the Company will pay the personal taxes owed on restricted stock awards on behalf of named executive officers.

Shareholder Proposal on Recovery of Unearned Management Bonuses

AGAINST shareholder proposals to adopt an executive compensation recoupment policy.

FOR shareholder proposals to adopt an executive compensation recoupment policy.

FOR shareholder proposals to adopt an executive compensation recoupment policy.

FOR shareholder proposals to adopt an executive compensation recoupment policy.

Shareholder Proposal on Approval the Implementation of the Holy Land Principles

AGAINST shareholder proposals to approve the implementation of the Holy Land Principles.

FOR shareholder proposals to approve the implementation of the Holy Land Principles.

FOR shareholder proposals to approve the implementation of the Holy Land Principles.

FOR shareholder proposals to approve the implementation of the Holy Land Principles.

Shareholder Proposal Regarding Quantifiable Performance Metrics

CASE-BY-CASE on shareholder proposals that request the board adopt the policy regarding quantifiable performance metrics. FOR this proposal in cases when compensation rating model results in an 'Against' recommendation on 'Say-on-Pay' proposal. AGAINST this proposal in cases of when compensation rating model results in a 'For' recommendation on 'Say-on-Pay' proposal.

CASE-BY-CASE on shareholder proposals that request the board adopt the policy regarding quantifiable performance metrics. FOR this proposal in cases when compensation rating model results in an 'Against' recommendation on 'Say-on-Pay' proposal. AGAINST this proposal in cases of when compensation rating model results in a 'For' recommendation on 'Say-on-Pay' proposal.

CASE-BY-CASE on shareholder proposals that request the board adopt the policy regarding quantifiable performance metrics. FOR this proposal in cases when compensation rating model results in an 'Against' recommendation on 'Say-on-Pay' proposal. AGAINST this proposal in cases of when compensation rating model results in a 'For' recommendation on 'Say-on-Pay' proposal.

CASE-BY-CASE on shareholder proposals that request the board adopt the policy regarding quantifiable performance metrics. FOR this proposal in cases when compensation rating model results in an 'Against' recommendation on 'Say-on-Pay' proposal. AGAINST this proposal in cases of when compensation rating model results in a 'For' recommendation on 'Say-on-Pay' proposal.

Shareholder Proposal on Proper Disposal of Pharmaceuticals

AGAINST shareholder proposals on proper disposal of pharmaceuticals.

FOR shareholder proposals on proper disposal of pharmaceuticals.

FOR shareholder proposals on proper disposal of pharmaceuticals.

FOR shareholder proposals on proper disposal of pharmaceuticals.

Shareholder Proposal Requesting a Report on Electronic Waste

AGAINST shareholder proposals requesting a report on electronic waste.

AGAINST shareholder proposals requesting a report on electronic waste.

FOR shareholder proposals requesting a report on electronic waste.

FOR shareholder proposals requesting a report on electronic waste.

Shareholder Proposal Requesting a Report on Renewable Energy Adoption

CASE-BY-CASE on shareholder proposals requesting a report on renewable energy adoption. 'Against' in cases when the Company receives a poor Board score, 'For' otherwise.

FOR shareholder proposals requesting a report on renewable energy adoption.

FOR shareholder proposals requesting a report on renewable energy adoption.

FOR shareholder proposals requesting a report on renewable energy adoption.

Shareholder Proposal Requesting a Report on Climate Change and Business Model

FOR shareholder proposals requesting a report on climate change and business model.

FOR shareholder proposals requesting a report on climate change and business model.

FOR shareholder proposals requesting a report on climate change and business model.

FOR shareholder proposals requesting a report on climate change and business model.

Shareholder Proposal Requesting a Report on Distributed-­‐Scale Clean Electricity

CASE-BY-CASE on shareholder proposals requesting a report on distributed - scale clean electricity. 'Against' in cases when the Company receives a poor Board score, 'For' otherwise.

FOR shareholder proposals requesting a report on distributed - scale clean electricity.

FOR shareholder proposals requesting a report on distributed - scale clean electricity.

FOR shareholder proposals requesting a report on distributed - scale clean electricity.

Shareholder Proposal: Report on Recyclable Packaging

AGAINST shareholder proposals requesting a report on recyclable packaging.

FOR shareholder proposals requesting a report on recyclable packaging.

FOR shareholder proposals requesting a report on recyclable packaging.

FOR shareholder proposals requesting a report on recyclable packaging.

Shareholder Proposal: Report on Nanomaterials

AGAINST shareholder proposals requesting a report on nanomaterials.

FOR shareholder proposals requesting a report on nanomaterials.

FOR shareholder proposals requesting a report on nanomaterials.

FOR shareholder proposals requesting a report on nanomaterials.

Shareholder Proposal on Antibiotics in Livestock

FOR shareholder proposals on antibiotics in livestock.

FOR shareholder proposals on antibiotics in livestock.

FOR shareholder proposals on antibiotics in livestock.

FOR shareholder proposals on antibiotics in livestock.

Advisory Vote on Merger Related Compensation

AGAINST  "golden parachutes" which are abusive, such as those that exceed 2.99 times annual compensation, contain tax gross-ups, or provide for accelerated vesting of equity awards, are triggered prior to completion of the transaction or if the payouts are not contingent on the executive's termination.

CHANGES

Auditor Rotation

No change

Auditor rotation every 7 years

Auditor rotation every 7 years

Auditor rotation every 7 years

Approval of Cash or Cash & Stock Bonus Plans

Change from 'FOR' to Case-by-case basis on cash or cash & stock bonus plans to exempt compensa­tion from taxes under the provisions of Section 162(m) of OBRA.

Change from 'FOR' to Case-by-case basis on cash or cash & stock bonus plans to exempt compensa­tion from taxes under the provisions of Section 162(m) of OBRA.

Change from 'FOR' to Case-by-case basis on cash or cash & stock bonus plans to exempt compensa­tion from taxes under the provisions of Section 162(m) of OBRA.

Change from 'FOR' to Case-by-case basis on cash or cash & stock bonus plans to exempt compensa­tion from taxes under the provisions of Section 162(m) of OBRA.

Shareholder Proposal on Written Consent

Change from AGAINST to FORshareholder proposals to allow or make easier shareholder action by written consent.

no change

no change

no change

Shareholder Proposal on Energy Conservation

no change

Change from AGAINST to FORshareholder proposals to encourage energy conservation and the development of alternate renewable and clean energy resources and to reduce or eliminate toxic wastes and greenhouse gas emissions.

no change

no change

Shareholder Proposal promoting Recycling

no change

Change from AGAINST to FORshareholder proposals promoting recycling.

no change

no change

Shareholder Proposal Regarding Vote Tabulation

change from AGAINST to FORshareholder proposals that request all matters presented to shareholders, other than the election of directors, shall be decided by a simple majority of the shares voted FOR and AGAINST an item and abstentions from the vote count be excluded.

change from AGAINST to FORshareholder proposals that request all matters presented to shareholders, other than the election of directors, shall be decided by a simple majority of the shares voted FOR and AGAINST an item and abstentions from the vote count be excluded.

change from AGAINST to FORshareholder proposals that request all matters presented to shareholders, other than the election of directors, shall be decided by a simple majority of the shares voted FOR and AGAINST an item and abstentions from the vote count be excluded.

change from AGAINST to FORshareholder proposals that request all matters presented to shareholders, other than the election of directors, shall be decided by a simple majority of the shares voted FOR and AGAINST an item and abstentions from the vote count be excluded.



Comments or questions about the Egan-Jones Proxy Guideline should be directed to Ms. Magda Pacheco, Manager, Client Relations at Egan-Jones Proxy Services (mpacheco@egan-jones.com). Note that the full Guidelines are posted at http://www.ejproxy.com/public/methodologies/.


Media Contact:

Kevin McManus
Egan-Jones Proxy Services
61 Station Road
Haverford, PA 19041
+1-703-982-1083 
kmcmanus@egan-jones.com
https://twitter.com/theproxyexperts



Egan-Jones Proxy Services ("EJP") is a leading provider of independent proxy research, voting recommendations and voting services to a variety of institutional investors. EJP assists institutional fiduciaries in determining voting directions as well as assisting in the administrative submission of proxy voting, and provides research, recommendations, voting, and voting record retention services on various shareholder proxy voting matters. EJP was established in 2002 by the Egan-Jones Ratings Co., Inc. ("EJR"), a nationally recognized statistical rating organization ("NRSRO") as designated by the U.S. Securities and Exchange Commission. EJR provides credit rating services for primarily institutional clients. EJP is a related division of EJR, and is not a subsidiary or stand-alone corporate entity. EJP and EJR have physical and electronic safeguards in place to prevent conflicts of interest and the sharing of client data.