The Big Vote at Darden, plus Starboard shakes Southwest, Norfolk Southern’s CEO problem, and a bo...

this is proxy countdown welcome to the Big Show for the week of september9 2024 alongside my tag team partner Matt Mardi I'm Damen RIS on today's countdown Anor Holdings finally gets its man at norick Southern the Southwest Airlines board is now up for grabs Darren Woods is now exxon's Chief threatening officer the only shareholder who agrees with Logitech founder Daniel boret is Logitech founder Daniel bore and on the big vote we draft a whole new board for Darden [Music] Restaurants let's get to our top stories on our trade wire the board of directors of Norfork Southern terminated CEO Allan Shaw in connection with an ongoing investigation that determined that Shaw violated company policies by engaging in a consensual relationship with the company's Chief legal officer nabanita nag this is their language by the way it said in their filing that they terminated Alan Shaw that's what it says very aggressive didn't terminate his contract didn't terminate his position just terminated Allen Shaw and you know they are pissed because he was terminated for cause which means no severance and he can kiss his outstanding Equity Awards bye-bye the company yeah I I can at what point does Anor take a Victory lap here uh yeah they deserve one uh the company also announced that Mark George the current CFO will be the new CEO and will join the board I didn't see the interim title anywhere so this sounds serious uh for now I guess and Jason zamp becomes the acting CFO and of course uh Chief legal officer nabanita nag is is fired so yeah as you said Matt a victory for anchor Holdings and uh maybe a slap in the face of the Jeff sonnenfeld a little bit Jeffrey sonnenfeld touted two big CEOs this year in in lengthy reports uh first one was Dave Calhoun at Boeing who is gone and the second one was uh alen Shaw at norick Southern who was just been fired for violating company policy I would say if Jeffrey sonnenfeld wres something about you and you're a CEO of a Fortune 500 company just watch your back xpedia group Vice chair Peter Kern stepped down in an director Mike drop moment quote the board eliminated the seat previously held by Mr Kern you know you're good when they just take your chair away uh Bentley systems added CEO Nicholas cumins to the board my dream of keeping CS CEOs off all American boards continues to die slowly workday has appointed Ronda Morris as a Class 2 director to join the board in early 2025 since the board is classified she won't stand for her first election until roughly June of 2026 in the meantime she will get $750,000 in equity 1/4th of which will vest even before shareholders have a chance to give their opinion on her she'll be there for about a year and a half before they have a chance of voting her why why are directors allowed to serve for uh their first meeting vote I don't understand so we we covered this in in another proxy countdown a year and a half the average tenure of a director is 7 years that means she will serve 21% of her term if she is the average director before she even gets voted on and she will uh one quarter of her Equity her son on Equity will vest already before they vote on her I mean it's already kind of comical that they're announcing she's going to join the board early 2025 there so I mean we're already three months before she even joins they're announcing she's going to join and then she doesn't officially get a vote for another year and a half after that it she's going to be effectively be there almost two years before anyone even like notices two companies are joining the modern world and have appointed their third female director that's Mary Puma at enter enteris and Lisa Campbell at Dino Trace uh ENT Integris and Lisa Campbell at Din Trace Lisa Campbell has also been appointed to the cyber security Committee of the board despite her long career as a marketing executive that that one puzzled Me Maybe She markets cyber security and finally here is the entire filing from sempra quote on September 5th 2024 Bethany J Meyer resigned as a director of sempra effective the same day and quote yep that's all you need to know shareholders by the way according to our data she's the highest performing director on that board with a 665 average overall and has only served since 2019 and yet sea is not telling us anything about why she's stepping down highest performing director at sbra okay that's it for the trade wire moving over to our proxy cage matches we have a a few things to talk about this week first of all a big story out of Southwest a lines uh after activist investor pressure from Elliot Investment Management which has been going on for well over a month Southwest Airlines agrees to Big Board overhaul so Southwest Airlines executive chair and former CEO Gary Kelly has given up and will step down from his role at the company's 2025 annual meeting meanwhile six other directors have resigned and will leave the board in November that's David Beagler Jay Veronica Biggins Roy blunt William Cunningham Thomas Gilligan and Jill salow so uh four new directors will be appointed at that at that time so what does this mean overall it means that the board is losing 62% of total influence according to our data that includes 21% influence from former CEO and chair Gary Kelly uh the board's also losing four directors who are about 80 years old and three directors who've been on the board since before the uh first Obama administration so that's what's going on over there at Southwest it's hard to say that Gary Kelly is giving up and stepping down he's been there for 20 years he didn't I don't think he wanted to leave at some point although what this does do is it ruins our case study of Southwest because we did a whole case study about Bill Cunningham and Gary Kelly and how Southwest basically has been making bad decisions forever so I I'm a little angry at Elliott for ring study they just listen to us uh activist investors seian ups at stake in Swiss insurance company BW to 9.4% as a result bw's chair Thomas van planta said the company is considering changes in its board of directors of course quote we want to strengthen the insurance expertise on the board end quote what an incredible concept for an insurance company but he's not wrong mat according to our data nearly 2third of the board's influence is represented by the following skill sets economics and accounting building and construction and Mathematics that doesn't sound too bad it does strike me though why is it that board strengthening only happens when that doesn't this suggest that boards are generally weak and are waiting for an activist to step in to strengthen I mean absolutely it doesn't make any sense News Corp uh investor starboard value said it plans to challenge the company's dual class share structure that gives control to rert Murdoch and would did transfer it to four of his adult children the problem is that James Elizabeth prudence and laan uh Rupert's kids uh lachan is the chair of News Corp as well as the CEO of Fox they may not actually agree on how to run the family business creating uncertainty that represents a risk of shareholders according to Ser board value the Dual class voting shares allow the family to control News Corp with a relatively small economic stake which I think is only about 14% of actual share ownership the quote from starboard value is worth repeating here while we can understand how some could see a benefit to a Visionary founder retaining outsize control for a limited duration of time that potential understanding vanishes as super voting power and the associated protections transition to others the four Murdoch siblings with voting rights within the trust are reported to have widely differing World Views which collectively could be paralyzing to the Strategic direction of the company more importantly we are not sure why their perspective should carry greater weight than the views of other shareholders I mean you could fill in a lot of other media and tech companies into these into the uh starboard values thought process here you not only could you but um you should Keith rert Murdoch is trying right now in Nevada to give full control Lan to laand by you the trust that owns the super voting shares he's trying to create super voting shares of the trust that he gives to laan so he's literally going to have dual class on top of a dual class structure in order to maintain that Vision to answer that question but it notwithstanding the fact that there are other shareholders who own more of the company yeah well 86% of they own 86% of the company not the voting the murdocks only own 40% of the voting right so it's possible to outvote them and lastly Exxon CEO Darren Woods is back at it he is now openly threatening activist shareholders thinking to emulate follow this in Arjuna Capital who filed a climate related resolution at the company's annual meeting this year Exxon sued those investors um and woods is now pre- scolding his shareholders quote we hope we don't have to use that action in the future but if we find people continue to abuse the process we're going to hold them to the rules so he's threatening his shareholders ARA followed the rules they that they followed the rules that that that was the rules Darren Woods is mad at something else and and and suing his shareholders to to prove it an example uh okay let's move over to our vote results table they're not they not a ton of uh elections going on right now but there's a few notable stories this week first of all the winner of the week is as space mobile director Christopher sambar who is beloved by 99.96% of shareholders that's a incredible incredible vote tell there's a lot of love at Nathan's Famous yes the hot dog company 30% of shareholders were against directors Howard lber and AF Petrelli Howard lber has been executive chair since 2007 with a higher total compensation even than the CEO Eric G Goff he's been a director since 1987 and is the company's largest shareholder with 24% of the voting power so really what this means is that essentially half of all shareholders not named Howard lber uh want him gone so there you go uh also AF Petrelli is 80 and has served on the board since Bill Clinton's first Administration so oh that's not that long Nathan's Famous sharehold is getting a little uncomfortable there at grien digital mining Jessica Billingsley received nearly a million more votes against her reelection uh it's a total of 52% against her reelection but was nonetheless elected as a class three director to the board for a three-year term because of the company's plurality voting standard which means effectively that in an uncontested election directors need only one single vote to be reelected yes this is still a voting standard at many US companies I'd love to be in a place where the director didn't get that one vote one vote and finally at Logitech Daniel Burell one of the three people who founded Logitech in 1981 and who still owns a 1.2% stake kind of like Howard Schultz he failed in his attempt to ous chairperson Wendy Becker so he really wanted Wendy Becker gone but 86% of shareholders voted for the re-election of Becker as the company's chair um the the weird part of the story is that Daniel Burell he wanted board member guy geek to replace her but guy gek said even before the meeting that he would not accept the position of chairperson if he was elected so this is just a crazy story I mean he's a the founder is anointing someone who doesn't even want to take over the role of chair I just a just a mess over there at Logitech did Guy GE get enough votes to get reelected well so there were what there were were there were two separate votes first there was a just a normal board vote where yes guy G was reelected and so was Wendy Becker but there was also this sub kind of shareholder special shareholder vote this is a European company have slightly different voting uh um votes there's a separate shareholder vote which asked shareholders if uh Wendy Becker should be reelected as chair or should it beat guy geeked and in that vote Wendy Becker beat guy geeked 86 to 14% so again guy geek wouldn't even even accepted that vote so he you think the founder could have asked him if he was willing to take over the first I think they should have done like a thumb war for the chair roll uh that's all I have uh moving on to the big vote uh for the week of September 9th 2024 is Darden Restaurant which hold its annual meeting next week uh on Wednesday um before I hand it over to you my quick very quick observations are first of all uh over 40% of this stock is held by institutional share shareholders including Capital which owns 22% it's a considerable amount uh overall this is another a very average company hitting 508 overall we've seen a lot of average companies on the big vote like this uh looking at the director's skill sets only only 10% of influence is actually represented by food production which may or may not be concerning for a massive restaurant uh brand and finally the only other observation I wanted to point out before I hand off to you Matt is here's my big concern with Darden Restaurants you've covered a lot recently some of the uh anti- Deo flip-flopping board directors who have basically stabbed uh most of America in the back by getting rid of their Dei policies uh one of those companies was Tractor Supply right Tractor Supply MH the CEO of Darden Restaurants uh Ricardo cardus and the chair cyony Jameson have both at one point served on the boards of tractor supply companies I'm a little bit worried that Darden Restaurant which is big in the midwest might be another Target for anti- Dei flop flip flop there is some definite Dei coward on this board um but but honestly um so all right here's how I approach D do um I starting from the market first of all I didn't know the company that owned Olive Garden had a$1 199 billion market cap I mean it's a it seems like a fairly big company for what I associate with effectively strip mall restaurants right like steak Italian Chris um uh yeah Texas Longhorn I believe Longhorn um uh Capitol Grill um it's a dividend payer um 61% of analysts say it's a strong buy or a buy so because of the dividend the market likes it yeah I think in part because of the the dividend but if we're honest the business model here is it's a carbon beef delivery system that's all it really does it serves you steak and pasta very Midwest it's 93% vertically owned the only um things that are most of the franchised restaurants are the um Ruth Chris restaurants what they purchased last year um Olive Garden makes up 44% of the restaurants so and Longhorn is 27% those are the big two the others the rest um the markups are by far the highest at Olive Garden and when you think about it it's really just pasta and cheese and and bread sticks right like these are these are cheap things but um the other restaurants offer more alcohol they offer a lot of beef more expensive expenses are 50/50 food and labor so if I'm cutting this down right the risk is basically food safety and labor issues those are the risks so if you're looking at the board the things you want to be thinking about is is are the is the board managing those risks right there's 191,000 team members with a 94% of them are hourly and it's an 80% turnover rate annually well you know that that figure shows in the CEO pay ratio where cardus is making 527 times more than the median worker who's only making about $23,000 and they disclose that as one of the best hourly wages CU they say they average hour hourly wage with tips is $23 an hour and one of the lowest turnover rates in the industry oh despite what what turnover rate did you 80% turnover is one of the lowest they that's what they disclose right um and but it's clearly that that people are not making enough they started a program called Darden Dimes in the 90s where they give they take 10 cents out of an hourly workers paycheck they put it in a fund and then they use that fund to pay other hourly workers who are in financial distress that fund still exists today the CEO made 12 million last year and they paid out um of this fund 1.7 million to people in financial distress it just makes me wonder right if you took like you know the equivalent of 10 cents out of the you know uh the CEO's pay whether or not cover the whole fund um but when I look at the board if we know that the risks here are labor and uh food safety right you'd expect on the board to see people as you mentioned food production backgrounds maybe some labor backgrounds HR maybe something like that yeah except you don't to be fair at at D restaurants you don't see really labor backgrounds HR backgrounds in any of these type of companies you might see more food production but you really don't see a lot of HR and the first thing that struck me about this board well the first thing that struck me is why don't they have their favorite menu item listed like Starbucks does I I was I was actually upset by that that's a great idea yeah I I wanted to know which one gets like the ravioli carbonara or whatever or just like seven raw Stakes but the the when I looked at the board members the what struck me is actually everyone and I do mean basically everyone all but one or one director I think has had experience being with bankruptcy or being bankrupt adjacent as in company is failing and they had to sell the company or the company like was in bankruptcy and they were running it out of bankruptcy or it went bankrupt under their watch Yeah you mentioned this to me earlier in the week and my first observation was um maybe this is a good thing because when I think of of of giant restaurant chains in the United States they're they are prone to frequent bankruptcy so may so so maybe it's a good thing maybe they're they're trying to prevent the bankruptcy I don't know well that's that was or maybe it's inevitable maybe it's their Destiny question right like it might be their and if it's their Destiny that's not great for shareholders because what I'm thinking too is that they all pick from the same gene pool of similar type Industries right they they find their directors from the same networks of people and those people just happen to come from bankruptcy kind of companies right but here was the problem that would be true if they were picking from the genan pool of other restaurants right or Hospitality or something restaurant adjacent but what they are and I mean this in the most literal sense I can is strip mall board directors okay the the director lot of bankruptcies and strip malles the ex CEO of U Mena who is the ex CEO of Long John Silvers when it declared bankruptcy the chair Jameson she calls herself a turnaround CFO she's currently on the board of Big Lots and has been since 2015 they just declared bankruptcy um she's also on the board or was on the board of Office Depot which has been trying to stop existing for the last 10 years like it's been still existed frankly um Fogerty was the president of lhan Brothers after bankruptcy was declared but was also the CEO of Orchard Brands when they declared bankruptcy incredible really it's an incredible I yeah I do Wonder like a little bit of uh hedging their bets I'll call it Atkins was at Sears until 1999 anyone remember Sears like that they they she was there for the largest loss ever by a retailer in the 9s the more the more you mentioned these I it really makes me think that they're they have a very limited network at which they draw new directors from but the it would make sense to me if they're drawing new directors from a pool of people that were at least industry relevant but they're pulling from directors that's a pool of there's no other way to think of this except fail uppers or or ex failers or fail adjacent like there's so so and I I haven't even gone through all of them like I have a extensive list here of all of these things so the basic but the basic question was to your point is this normal for a restaurant company right like would you is this who you expect so I went and I found the closest comp company that I could think of because these directors have all been rubber stamped 40% of the of the outstanding shares are held by Capital group Vanguard and black rock yeah basically they are picking the directors that's it and they are for the last three years four votes for everybody yeah you can see that very clearly in the data that that the shareholders don't have any interest in making a decision on directors so is this normal and the closest comp I could come up with suggested yes this is very normal I looked at bloomen Brands which is another restaurant company basically strip restaurants Outback Steak House Steak House is there big one they have an Italian joint they have all the same same right the same things the board is basically exactly the same including that board has an ex Darden executive on it which at least is some food experience they have board member history overlap Chico Michaels Walmart starboard um value who you mentioned at the top um also has dealt with both bloomen brand is right and they been on both Boards out of curiosity does does bloomen brands also have directors attached to the gambling industry I noticed that there are two directors here with ties to the gambling industry which I don't quite get either the closest they get is Six Flags which to me is basically a form of basically like yeah it's basically what do they call that uh expense uh discretionary spending entertainment spending Best Buy is on the board um staples instead of office Depot Urban Outfitters instead of Orchard Brands there is just company after company kind of mall mall area Brands yeah I just went to a New Jersey mall that's what it feels like again uh mall area Brands tend to to file for bankruptcy so again I mean you do have to wonder is it's a start a smart strategy or are they just fulfilling their own destiny I right so so either this is high beta Industries High Risk Industries with razor thin lines to failure attract these kind of directors or they the nature of the business necessitates these people as experts right like it's one or the other either failers can go to these places because they're known entities but they just fail repeatedly or they're chosen on purpose because they're the ones who are experts and possibly keeping this alive or understanding the business of failure the one thing that really stands out from everything you're saying to me is is the future like how how with these skill sets and in these backgrounds how does a company like Darden Restaurants like bloing Brands how do they innovate how do they change how do they transition how do they res how do they respond to all I mean the restaurant world forget I mean even putting the pandemic aside which is a lot the restaurant world has gone under an incredible amount of change in the last decade do any of these directors have any ability to react to change that to me is the is the core sort of forward-looking question like the what to do now question is should we just accept the fact that restaurants are high failure risk and this is a restaurant company on the S&P 500 or should we go at this and say you need to you need to innovate you need to be different you can't draw from the same pool of sort of EX failers and failure adjacent directors and Executives you got to do something different so what I did yeah was I decided to test the data and draft a whole new board now everybody out my recommendation here is not everybody out my recommendation would be you vote against Jameson who's the board who calls herself a turnaround CEO CFO the turnaround CFO who's on the Big Lots board that is currently declaring she didn't really turn it around since 2015 declaring bankruptcy now the one by me is is closing willmot is a vote against there's no need for pen pen gambling you know you don't need gambling I don't understand the overlap between gambling and Olive Garden unless they mean to suggest that every time I eat a bread stick I don't know what's in it g especially in like uh that the nomination chair Juliana chug is uh also from gambling Caesar's entertainment Corporation and I think Fogerty isn't against um because I I don't he he basically has failed in four separate places right like and I'm not sure exactly what we need that for so in in the short term there are three directors that I suggest voting against they've been there long enough I don't understand the skill set and you would keep the rest but in the long long term here I think the goal is to actually look at this and say what are the positions that I want like if this was a sports team if you have people who are just all failure ex failure failure adjacent they're likely to just play defense not not any innovation no offense so what is ideal and this is here's and this is a good exercise that could happen in a lot of companies that we cover well I think actually um and you and I talked about this um in pre-production there's it's possible to think of this as in a world where you can trade directors where you can look around the traded publicly traded universe and take one of your directors and trade it for another where you can attract directors with signing bonuses you think of them as Talent attract them with um titles to to committees um you know things like that you can give them Equity gr you know uh Equity grants that are attractive so that they come to your company I think if you think about a board like a sports team that way and you want top talent then this is this is actually not as far-fetched as it's going to sound not what ideal would look like on this board to me is you want at least two directors that food consumption food production backgrounds I would think I mean at a bare minum minimum at a bare minimum right you want somebody with Logistics background right like somebody transporting food around in supply chain understanding whatever um the biggest asset for restaurants is just the real estate it's nothing they're trademarks and real estate that's all they really are yeah there you want somebody who understands labor right yeah at least at least one person I would say two I mean this is a big deal moving forward it's a it's a huge deal deal you're all hourly workers you're at the you're at risk of changing in hourly wages you're at risk of people walking out or strikes if you don't treat them well you're at risk of the financial instability of your workers they don't can't can't show up because you don't give them anything yeah I really look workers more and more who are are Keen to the fact that they're not earning a living wage and really can't pay all the all their bills and are are going to be less inclined to stay at places like Olive Garden and ruths Chris right they they I think they need every Board needs an account on it everyone gets an account because you need them on the audit committee and then I think you actually want some tech people yeah why not like because I think you need some people who are used to thinking differently even if it's inside of a different box different box at least and I S I suggest it as the final sort of role someone who's super networked I mean look you what you're really describing could be a great board for I maybe you swap out food production for something else for another company but really what you're suggesting is a really great balanced board for most companies yeah you're playing a little offense you're playing a little defense you need to understand the risk but you have to measure the opportunities I think all those things need to be true and this is a point that is lost uh to shareholders because Pro proxy after proxy after proxy what you see in the skills Matrix that the companies present is that everybody's kind of miraculously has skills in everything they don't even take the time and effort to kind of break it down the way you are which is to say you know we've identified seven key areas and we've we've brought in directors who represent these areas they just sort of magically give you a board slate where everyone knows everything so we're all good here my favorite is when they make diversity of skill I've seen that in multiple proxies But but so I'm not going to go through I drafted effectively quot we can post this nine directors post this on our website. LC and I and and I'm going to make it a data drop for next week um so you can see this but I'm walk through a couple of these just give me some highlights because you have a lot of I see a lot of information here I I got all their bios so you can see like what they're saying about themselves where they are but just let's just take like first and foremost I want to find somebody who's in food consumption there's an idea um just that food consumption as a knowledge base basically means restaurants you somebody else who's done successful restaurants and at the top of your head who is that current representative now on their board do they have one it's just Rick cardus right which is which is not count because that's not the board is there to provide oversight for management it's not his board I mean exactly um so the method I used was I went through and this is all free float data um I went through and I looked at directors in the entire universe who we tagged as having food production as a basic skill a basic knowledge right and when I say basic knowledge I mean they majored in agriculture they their executive experience was at an agriculture company but in an operations capacity not like you're the head of HR at ConAgra you're you're you are operations right like you you know how to operationalize you know food production uh or you worked at a restaurant company in an executive capacity I chose food production I chose mechanical skill mechanical skill is often associated with people who are good at production in general and process in general making sure things are operationally tight and sound and efficient um I avoided anyone with an economics background I didn't want some someone who got an undergrad degree in economics and then got their MBA and then joined a restaurant company in a as a vice president or something yeah exactly I I didn't want any of that right I'm trying to avoid that but I I I wanted to pull pull from a pool of large cap directors existing directors so that you know they have Bo experience dat at large companies and I wanted them to actually be top performers they I only picked people who had greater than 500 batting average in earnings and greater than 500 batting average in TSR meaning the places that they've been they have this knowledge set and the output is the companies where they've sat on boards outperform yeah I'm assuming very minimum average but they outperform and I'm assuming American directors All American all us-based I one without it the the result was I got Deborah crew who's on the diio board okay she began her career at craft Foods all you got I'm sold she she's she's done marketing she's done operations she's been at Pepsi she's been at um she's she's even done uh uh uh I mean diio is a alcohol company right um uh so she's got that experience on the board she actually is a i wrote this down in my notes she has a deep knowledge of vices is there is there anything you want more from I mean like well let's be fair let's be real I mean a Darden Restaurant is a vice company right because I mean you're going to the mall you're having a bunch of bread sticks you're having a big steak and whiskey like it's a vice it's basically vices I mean she worked at RJ Reynolds for a while like she does she does vice really really well hey I'm sold Deborah crew but it's all food and consumptive VI she's US based but she's worked for a UK based company so she has International exposure and part of what I wanted to say is how do they do it different because all of these directors have been us-based companies only how do they do it different in other jurisdictions in other countries restaurants they don't have the same labor problems they don't have the same but they think differently right um and she covers both marketing and food so I'm getting two for one in a way so who else yeah all right here's another one right um I wanted transp I wanted Logistics I'm talking about like supply chain Logistics so all I did this one was really simple I just chose Transportation knowledge us-based and all performance metrics above batting 500 fun game I'm enjoying this game by all I mean earnings TSR carbon and controversies I don't want somebody who worked at a transportation company that ran over 17 people or um spew a lot of carbon because carbon is a big issue in in logistics and transportation here's who I got and these are people when I short list these they ended up being you know 5 to 10 to 20 depending on the short list 20 directors and I literally eyeballed for where they were what's in their bio and I picked them at random none of this and this is important not one of these data points I used is a demographic data point I didn't say I want women I didn't say I want you know like people of color I didn't say any of that I'm just going strictly on knowledge base and performance metrics what I got was George Willis of Vulcan Materials board right now he actually was at UPS for 20 years or longer ups for a long time he was the president of US operations at UPS sold he know if there's anybody who knows how to get a thing from point A to point B it's somebody who worked at a company like ups but because he's at Vulcan Materials he actually has a lot of knowledge about Commodities commodity pricing all sorts of other things related to Commodities he is on the board of Huber which is Works um on sustainable Commodities uh and and many of the things they do like packaging and stuff like that all actually relevant for a Darden and beyond that two things I've noticed is that as an example George Willis Vulcan Materials board uh Vulcan Materials is headquartered in Bur Birmingham Alabama you also had um Elizabeth Keller for food production she's on Murphy Oil board which is in Texas these are good cultural fits for Darden Restaurants which is in Orlando Florida so these are these are these are I don't know that you actually looked at that but uh for as far as a board being you know being able to like get along and having a good cultural fit have good conversation these are these are not outlandish picks they're not at all um in fact some of the picks what um were they worked at related companies so they're not totally unknown like um I ended up getting Pamela per year she's at Spartan Nash which is a a military food supplier actually they have you know they work with a US military on on food supplying sounds about the same to me but she worked in a human resources capacity in fact for that I looked for personnel and Human Resources knowledge therapy knowledge exposure to unions or low wage workers and she had she worked at um she's on the board of Spartan Nash but she's she's worked at fizer as a chief Talent officer she's worked at Walgreens which is you know it's half of that is low wage you know a low-wage Workforce um she's worked across multiple Industries in that capacity she has an MBA um and a degree in Psychology and a degree in organizational psychology a PhD in it yeah um and she's on a food provider board so yeah I was say once again perfect cultural fit Spartan Nash uh Michigan located in Mich when I was done with this and there are a couple of good ones in here I won't belabor them yeah now remember I said I put in no demographic data one of the fun things that came out of this was I ended up with a board that had three white women MH one black woman one black man one Asian man and three white guys perfect it would be one of the most diverse boards in the sector if not the most div diverse and I am not doing this with any demographic this is purely performance for every single one of these I chose they had to be on boards that outperformed as as a criteria outperformed in some aspect right that means it's totally possible that the there's ways to find cultural fit there's ways to find knowledge fit right and all you need is the data to do it which we end you can end up with a board analytics.com that that actually is fit for purpose yeah I love this so again this uh this entire board slate for Darden Restaurants will be available on free float. LLC right a data drop and it it'll be all there on a data drop and uh the key takeaway here though is uh a vote against remind me who Jameson chair so the vote is against the the chair of the board Jameson Cynthia Jameson the vote against Wilmont um who's who who's currently uh compensation committee chair Timothy Wilma who comes from from Pen National gaming of all things and Fogerty I think his name is John J FY who comes from Beauty Brands and uh pharmaceutical Brands and so it's yeah again kind of an odd fit there but I think the goal here is to think differently about how you construct your boards and to if you could engage with the board on a level or at least a third party on a level and do a universal proxy card in which you're attracting talent and putting them on the board rather than thinking about who did management give me I'll tell you this process took me one day I I'll tell you this too you know we get a lot of feedback that our process is negative because we're we're targeting directors to vote against or targeting uh directors to get rid of that's that's not en entirely that's that's like a part of the truth of what we're doing here really what this suggests is that this is a positive process of finding the and championing the right directors who will actually make a contribution to the boardroom and and you're right to point out that we could see these people as high performers we could we could offer them signing bonuses this is does not have to be a negative process it's just finding the right directors and finding the right fit for your company so uh other than that Matt we have um SE on pay up for vote at Darden Restaurants we actually have uh one two four share proposals is anything stick out to you that you want to talk about before we wrap up today's show there was nothing that stuck out to me I was against pay um I I think as a general rule I'm going to be against pay when the the pay ratio is above average 250 to one especially when you especially when you have a a policy where you're taking a 10 cents out of your workers paychecks to that's a little it's a little awkward it felt weird what about Sher proposals we have a bunch on we've one on chicken one I'm pork I actually thought the chicken and the pork uh Sher The Proposal both well-meaning I don't disagree with them but in general I feel like Miss the fact that they do beef and pasta right like um it felt weird to me to focus on it's not like they don't do those things yeah but there are other bigger things that I feel like if you're going to spend time on a shareholder proposal the other bigger things matter where where I will disagree with you on both of those um is that these seem to be purely about disclosure in that the company H has promised um to to to do certain things like for instance to um uh uh to to release key welfare indicators related to bro or chickens I don't know a lot about this subject but if you're going to purport to to change something D promis to change something to improve something um by a certain year release all this the human just want they just want the data they just want to see the process they want to see the progress right that's great I don't disagree with that but as we just saw with Tractor Supply right and that's is where that becomes relevant these these u-t Turners if you are willing to u-turn on something like humans in your company you're right right u-turn on hitting a target for Broiler chickens is not something that's high on your agenda right you that's where the people matter and what you've learned about these people is you can't ask them to give you a report or hit a Target because they don't care about that if you don't like it replace them we had these are misplaced to me we had a fascinating request from a client this week that you told me about where where they were interested in our data on the flip floppers the Dei flip floppers right right and and their question was was really pretty simple but kind of Genius which is well if they're going to change your minds here where else where else are they going to change your minds like if they don't take this seriously what else don't they take seriously and this is the part that all again all the business news reports miss out on they they don't cover that particular aspect of these stories yes they cover that the company is is resending its Dei policies but they what they don't cover is that this is actually just a handful of human beings making this decision in a boardroom changing their minds for no apparent reason just because of activist pressure so where else are they going to change their mind uh so yeah I thought that was an interesting request from a client so in the end I I I basically said I thought to myself those don't they're not the biggest risks in the first place and they don't if I think you vote against the directors I think I think if there there and there are directors on this board who were there when they set these targets if they're going to flip-flop on the target they're not going to give you reporting on it vote them out I don't know why you would ask in Char The Proposal anymore the people are the are what matter so um but otherwise nothing stood out to me yeah it looks like you're voting for um uh requesting the company to comply with who guidelines for antimicrobials for food producing animals in the supply chain that's a mouthful that one comes from uh Mercy Investment Services and finally from the S The Sisters of the order of St Dominic Grand raids you also supporting their proposal which is request ing the company issu a report on uh reducing greenhouse gas emissions in alignment with uh paris's 1.5 degree goal right so yep that's it uh a lot going on at Darden Restaurants Believe It or Not uh again we are going to drop some of this data on our website if you want to hear more about this it's actually quite interesting it's quite fascinating this board that you drafted for Darden um I'm hoping that you will send this to Darden itself why not right uh that's the proxy countdown for the week of September 9th 2024 join us next week when we jump back into the alternative democracy pool Forever on the lookout for shareholder sharks floating Band-Aids and Wayward directors [Music]