Surveys: directors want you to vote them out, plus a vote out at John Wiley and female replacement theory

The silent female retreat

1. The not-so-secret power of the lead independent director

2. An aggressive activist atmosphere is heating up

3. A college professor in a bow tie gets voted out

4. And on the Big Vote, Matt talks Surveys

<TRADE WIRE BUMPER>

Trade Wire - BUY/SELL

Top Stories:

1. proxy countdown_trade wire_2025 - Google Sheets

2. Tracking Noteworthy 8-Ks since September 24th:

1. DIrector comings and goings:

1. Men added: 22

2. Men subtracted: 7

3. Women added: 6

4. Women subtracted: 5

1. Down to 2F:

1. Fannie Mae: Karin Kimbrough resigned

2. Down to 1F:

1. F&M BANK: Daphyne S. Thomas retired

2. Rocket Companies, Inc. (RKT): Jennifer Gilbert resigned; appointing Mr. Jay Bray to serve as a Class II director and Mr. Tagar Olson to serve as a Class I director

3. Pitney Bowes: Milena Alberti-Perez resigned (Julie Schoenfeld resigned in July)

5. Stupidities/Oddities:

1. IDEXX LABORATORIES INC /DE (IDXX)

1. elected Karen Peacock

2. Ms. Peacock will stand for election by stockholders as a Class I Director at the Company’s 2027

2. IonQ, Inc. (IONQ, IONQ-WT)

1. appointed John W. Raymond

2. General Raymond was appointed as a Class I director whose term will expire at the Company’s 2028 Annual Meeting of Stockholders

3. Rocket Companies, Inc. (RKT)

1. appointing Mr. Jay Bray to serve as a Class II director until 2028

2. Mr. Tagar Olson to serve as a Class I director until 2027

4. F&M BANK CORP: Daphyne S. Thomas: Upon reaching the mandatory retirement age, Ms. Thomas became an honorary director and will continue to function as such until she tenders her resignation to the board or until the board requests that she tender her resignation. Under Section 2.11 of the Bylaws, an honorary director may attend board meetings but is not entitled to vote.

2. NEOs

1. Disney: Sonia L. Coleman, the Company’s Senior Executive Vice President and Chief Human Resources Officer, changed title was to Senior Executive Vice President and Chief People Officer

1. increased Ms. Coleman’s annual base salary to $1,000,000; increased her target annual bonus opportunity to 175% of her base salary; and increased her target long-term equity incentive annual award value to 375% of her base salary

3. CEOs

1. COMCAST CORP: Michael J. Cavanagh will be appointed Co-CEO along with current CEO and Chair Brian Roberts, the son of Comcast founder Ralph Roberts

2. VERIZON COMMUNICATIONS: lead director Daniel H. Schulman succeeding Hans E. Vestberg

4. Money

1. Norfolk Southern: One-time cash retention to all NEOs

1. Mark R. George—$4,000,000; Jason A. Zampi—$2,250,000; John F. Orr—$3,000,000; Claude E. Elkins—$2,000,000; and Anil Bhatt—$2,000,000

2. Pepsi CFO Golden Hello: $9M

3. Strategy Inc: increase to the annual cap for the security program maintained for Michael J. Saylor, Executive Chairman/former CEO/co-founder, under which the Company covers certain security-related costs. Previously, the annual cap for this program was $1,400,000; effective in calendar year 2025, the cap will be increased to $2,000,000

4. Dell Technologies: one-time performance-based stock option award to COO Jeffrey Clarke valued at $132.4M

5. CSX CORP: appointed Stephen Angel as CEO; $10.1M golden hello

<PROXY CAGE MATCH BUMPER>

PROXY CAGE MATCH

1. Activist investors launched a record number of new campaigns in Q3, with 61 new campaigns, up sharply from 36 a year earlier.

1. Barclays’ new data show that activism is accelerating globally, with a 90% quarter-on-quarter increase in the U.S.

2. Year-to-date figures indicate nearly 191 campaigns targeting 178 companies, with activists securing 98 board seats and driving approximately 25 CEO departures thus far

2. Japanese game company GungHo Online Entertainment, has rejected a proposal from activist investors to dismiss its longtime CEO Kazuki Morishita

1. The proposal was put forward by Strategic Capital, a Tokyo-based investment fund which controls over 11% of GungHo’s voting rights.

2. During an extraordinary shareholders’ meeting held at its request on September 24, the activist pushed for: 1) the requirements for ousting an executive to be relaxed 2) for Morishita to be fired from his position as CEO.

3. While the first proposal was accepted, the attempt to remove Morishita failed, not gaining enough votes from majority shareholders. 

3. Irenic Capital Management, which owns about 2% of Workiva, wants board and governance changes:

1. Specifically, the hedge fund is urging the company to collapse its dual-class share structure, make all board members stand for election every year and add two newcomers, including Irenic executive Krishna Korupolu, to the board.

2. The hedge fund also expressed considerable concern about the company's governance, noting that five of its seven directors have served on the board since 2014.

4. Acadia Healthcare has appointed Todd Young as CFO, amid growing pressure from activist investors  Khrom Capital and Engine Capital — which together own more than 8% of the company

<VOTE RESULTS BUMPER>

VOTE RESULTS TABLE 

1. Freedom Holding Corp. (FRHC)

1. 0 SHP

2. classified; Philippe Vogeleer 99.2%

2. FEDEX CORP (FDX)

1. 1 SHP: independent board chairman 43% yes

2. 97% yes; Smith 10% NO

3. 37% NO pay

1. PAUL S. WALSH (CHAIR) 94%

2. Silvia Davila 97%

3. Susan Patricia Griffith 98%

4. Amy B. Lane 99.5%

5. Susan C. Schwab 96%

3. GENERAL MILLS INC (GIS)

1. 2 SHP

1. Regenerative Agriculture Practices Within Supply Chain 27% YES

2. Separate the Board Chair and CEO Roles 36% YES

2. avg 97% YES

4. RPM INTERNATIONAL (RPM)

1. 0 SHP

2. 99.7% YES Craig Morford; 9/12 up for election as company in process of declassification

5. CARPENTER TECHNOLOGY CORP (CRS)

1. 0 SHP

2. Classified

6. at John Wiley & Sons:

1. 54% said NO to Governance Committee Chair Brian Hemphill

1. The Board, upon recommendation of the Governance Committee, determined not to accept Mr. Hemphill’s resignation: “The Board concluded that the voting outcome reflected proxy advisory firm recommendations unrelated to Mr. Hemphill's individual performance or contributions. The Board determined that Mr. Hemphill's continued service is in the best interests of the Company and its shareholders”

<THE BIG VOTE BUMPER>

THE BIG VOTE PICKS

DAMION

Upcoming Meetings September 29-

AGM Date

Company

SHPs #

Notes

10/13

MillerKnoll Inc

0

Classified: 3 dirs

10/14

Procter & Gamble

1

As You Sow: Plastic Packaging 23%

10/16

Medtronic

0

Irish

10/16

CACI International

0

no Say on Pay; 3 directors

Matt

SURVEY SEASON

Executives

PwC Board Effectiveness Survey - August 2025

• All NEOs, ~500 of them

• Biggest representation in tech/media (23%)

• Mostly mid (35%) and large (26%) companies

Directors

PwC Annual Corporate Directors Survey - October 2025

• More than 600 directors surveyed

• Mostly mid cap (33%) and large cap (37%)

• Mostly men (65%) - and no question about race/ethnicity

• Mostly longer tenured (6+ years, 56%)

Asset Owners

Morningstar’s Voice of the Asset Owner Survey 2025 - October 2025

• 500 asset owners, 19tn in assets

• Mostly EU and APAC, 20% US

• Mostly 1-100bn in assets

SURVEYS SAY…

How important is voting out a director?

• Executives: 93% of executives say at least one director should be replaced, 78% say 2 or more

• Directors: 55% think AT LEAST ONE should be replaced, and 7% of directors - nearly 1 in 10 - think MORE THAN TWO directors

• Investors: 35% said they voted - IN EITHER DIRECTION - at all

• To put that in perspective, investor voter turnout is roughly equivalent to voter turnout in Syria (37%)

Are boards any good?

• Executives: 35% of executives rate their boards as “excellent” or “good”

• IT executives think their boards are the WORST - only 21% think they’re effective at all, and 40% think they’re straight up “Poor”

• Directors: 68% of board Boards think they have an effective assessment process

• Investors: only 35% of investors said board composition was material AT ALL, much less worrying about how effective those boards were

Are we culling directors that suck?

• Executives: 50% of executives feel confident a board will remove an underperformer

• Directors: 34% of directors think the chair/lead director is “very effective” in dealing with underperforming directors - the lowest of the options

• Investors: Only 35% even VOTE, and the average vote for a director is 96% in favor - 0.2% of directors annually are voted out

Why aren’t we cutting directors exactly??

• Executives: 57% said “Board leadership is unwilling to have difficult conversations with underperforming directors”, while 48% say “Individual director assessments are not performed”

• This checks out - only 27% of directors said as part of the assessment process, they did individual assessments

• ACTION ITEM: USE DATA TO DO INDIVIDUAL ASSESSMENTS

• Directors: The main reason why they haven’t been replaced is “personal relationships with board members”

• Investors: Only 35% even VOTE, but 52% do vote on shareholder resolutions - maybe if there was a shareholder resolution that said “do a report on individual director assessments, focusing on old, long tenured, underperforming directors”, they might actually approve a report on it since they won’t vote against a human?  

What makes a sucky director?

• Executives: advanced age, overboarding, long tenure, and unprepared for meetings

• When asked what a coaching a board chair should give underperforming directors: 36% say “not actively participating in discussions”, and 33% say dominating discussions

• Directors: “does not meaningfully contribute to discussions” and “long tenure”

• Investors: only 14% of asset owners find it “very useful” to do stewardship, which includes voting proxies, and 16% said they “don’t know” if it’s useful - the only time we see votes against consistently is for attendance and overboarding (like SUPER overboarding)

What’s the most important issue?

• Executives: Executives are asking boards to spend more time… on ESG?  50%, the highest overall ask. What keeps them up at night is talent management (18%)

• Directors: 34% said they plan on adding “industry expertise” - which suggests 1 in 3 boardrooms might have none?

• Investors: Business ethics remains number 1, and is the TOP RANKED material issue of every issue they asked - 68% of asset owners agreed

What do boards need?

• Executives: 37% said more education

• Directors: 45% said more education

• Investors: Not asked because they don’t care

Other fun survey tidbits…

• Only 15% of executives think the board has sufficient gender/racial/ethnic diversity, while…

• 25% of directors thought they could improve the board by seeking “more diverse viewpoints”

• Boards think - at a 94% plus rate - their interactions with management were very or somewhat effective, including “developing relationship with management outside of the boardroom”

So what do you do with this, investors?

• Executives WANT YOU TO VOTE OUT DIRECTORS

• Directors ALSO WANT YOU TO VOTE THEM OUT

• ACTION: VOTE OUT DIRECTORS - find underperformers, long-tenured or over-aged directors and swap them - only directors care about “collegiality”, executives don’t care because they need diverse viewpoints

• ACTION: Stop obsessing over shareholder proposals - they don’t matter nearly as much as you think they do investors

• Directors themselves seem like they don’t have enough expertise on the industry where they’re a director, and investors are worried directors are in it for themselves (ethics) while executives need them to think about exogenous risk (ESG)

• ACTION: It’s time to marry skills of directors to companies, looking for the exogenous long term risks facing an industry - use data to find them!

• ACTION: Don’t ask about AI skills on the board, they have to manage ALL exogenous risks over the long term, AI among them - when you myopically focus on just one, you miss the next wave of risk