Trade Wire - BUY/SELL

Top Stories:

CBRE Group’s COO Vikram Kohli received a one-time cash retention bonus of $1.45 million for not quitting. If the Company terminates Mr. Kohli without Cause or he resigns for Good Reason, there is no obligation to repay the Retention Bonus.

Ball Corporation announced that CFO Howard Yu is stepping down after less than two years at the job.

Hoawrd will receive severance benefits consistent with the Company’s previously disclosed executive severance policy: about $2.2M

Additionally, his outstanding time-based new hire equity award will continue to vest on its existing schedule.

His performance-based RSU and long-term cash awards granted in 2024 will continue to vest on a time pro-rated basis and subject to performance to ensure a seamless transition given his contributions during the performance period.

And finally the company said that it “appreciates Mr. Yu’s contributions during his tenure and wishes him the best in his future endeavors. The departure is not related to any disagreement with the Company on any matter relating to its accounting practices, financial statements, internal controls, or operations.”

The ‘Down to 2F’ trend continues: Nancy Tellem stepping down at Rocket Companies

On the other hand, there’s a woke power shift at Deckers Outdoor where Cindy Davis takes over as board chair from Mike Devine III. As the company itself already points out in its proxy statement, 2 of 3 committees are chaired by women and the 3rd is chaired by person of color Juan Figuereo.

The proxy also states that the board is “45% ethnically diverse” and “55% from underrepresented communities.” This is all to point out that ditching DEI because of a hateful, bloated President is not in fact a listing requirement. 

And finally, on May 21st, about a month after its 2025 proxy statement, Thermo Fisher Scientific announced a $60M retention equity award for CEO Marc Caspar “to secure his continued leadership through at least May 2030.”

On that same day, shareholders resoundingly rejected Thermo Fisher’s Say on Pay proposal: 65% NO

Pay Committee chair Dion Weisler (13% NO), R. Alexandra Keith (2% NO), James Mullen (2% NO), Scott Sperling (6% NO)

PROXY CAGE MATCH

Pitney Bowes has appointed activist investor and Pitney Bowes director Kurt Wolf as its new CEO: Wolf is the Chief Investment Officer of Hestia Capital Management, a hedge fund that owns approximately 9% of Pitney Bowes and has been instrumental in reshaping the company's board since 2023 due to concerns over performance.

He replaces Lance Rosenzweig, who was CEO since only 2024 and will serve as a consultant until September 2025.

HG Vora Capital Management, which owns about 5% of Penn Entertainment, has escalated its campaign for boardroom change by accusing CEO Jay Snowden of using the company's private jet as a "personal Uber service."

HG Vora is seeking to get three new directors elected to the board, though Penn has only put two up for nomination and says the third seat “does not exist” after it shrunk the size of its board from nine members to eight.

Rhode Island-based AstroNova is embroiled in a proxy cage match with Texas-based activist investor Askeladden Capital Management, which owns a 9% stake in the company

Askeladden has nominated five bro-candidates to replace the majority of AstroNova's six-member board, citing concerns over governance failures, strategic missteps, and declining shareholder value.

VOTE RESULTS TABLE 

Here are the highlights from 81 large-cap annual meetings over the past week:

55 total SHPs: and from only 31 companies, meaning 50 meetings had zero SHPs

15% (8) of these came from one company: Amazon

47 of 81: zero shareholder proposals and zero shareholder dissent.

Only 6 wins overall:

Say on Pay

THERMO FISHER SCIENTIFIC: 65% NO

Act by Written Consent

CDW Corp (51% YES)

But then why is Verisign, as an example, 6% YES?

Call special meeting (15%)

US Foods Holding Corp. (86% YES)

Declassification

Charles Schwab: John Chevedden, on behalf of James McRitchie (84% YES)

Phillips 66: MGMT Proposal: declassification 97% YES

Simple Majority vote

EPAM Systems (52% YES)

MARKEL GROUP INC. (71% YES)

7 “moral” victories (over 30%): 

Annual director resignations

Phillips 66 (33% YES)

Shareholder approval on excessive golden parachutes

TRAVELERS COMPANIES (42% YES)

Simple Majority vote

SOUTHERN CO (45% YES)

Shareholders ability to call a special meeting

HARTFORD INSURANCE GROUP (40% YES)

Act by written consent

EQUINIX INC (35% YES); also 40% NO to issue 3.3M shares

Independent board chair

JPMORGAN CHASE (37% YES)

The shareholder disconnects:

THERMO FISHER SCIENTIFIC Weisler 13% NO; 96% Average: Pay 65% NO

AMAZON COM: lowest 94% 22% NO Pay

The directors (over 20% not in a proxy cage match): only 4 higher than 20%, 0 over 30%; (about 800 directors: 0.5% over 20%)

PLAINS ALL AMERICAN PIPELINE: Christopher D. O'Leary (24% NO); George W. Off (26% NO)

Global Net Lease: P. Sue Perrotty 22% NO

FIRST BANCORP: Roberto R. Herencia 28% NO

Phillips 66 proxy cage match:

Company: A. Nigel Hearne (55% FOR); John E. Lowe (42% FOR); Robert W. Pease (55% FOR); Howard I. Ungerleider (47% FOR).

Elliott: Brian S. Coffman (52% FOR); Sigmund L. Cornelius (56% FOR); Michael A. Heim (53% FOR); Stacy D. Nieuwoudt (36% FOR)

The oddities:

The oddities:

Draftkings: board matrix disclosure 4% YES: The Comptroller of the City of New York

The Board believes that adopting the shareholder proposal would not be in the best interests of the Company or its shareholders and further believes that the Company’s existing skills and diversity disclosure and practices as to Board composition and recruitment achieve the objectives of the proposal.

the Board acts as a collective body, representing the interests of all shareholders. While individual directors leverage their experience and knowledge, we believe that Board decisions should reflect the collective wisdom of the group. Our disclosures are focused on emphasizing the collective strength of our Board.

We believe Ms. Mosley is qualified to serve on our Board due, among other things, to her extensive investment experience and background, including her experience serving as a member of the boards and committees of several large U.S. public companies.

CHARLES RIVER LABORATORIES INTERNATIONAL: report on non-human primates: PETA (8% YES) vs. TENET HEALTHCARE : strategies and programs for improving maternal health outcomes (5% YES): The New York State Common Retirement Fund

Phillips 66: annual director resignations 33% YES

ServiceNow: right to cure purported nomination defects 3% YES: James McRitchie

When reviewing one corporation’s advance notice bylaw, a Delaware judge noted that disclosures required of a nominating stockholder “would choke a horse.”

Mondelez International, Inc. (MDLZ) 5: 104,335,296/129,168,677/112,402,885/129,438,060/111,936,812 (about 12%)

Builders FirstSource: MGMT Proposal: Remove Limits on the Size of our Board of Directors 63% NO

Auditor dissent?!

THERMO FISHER SCIENTIFIC: Auditor 12% NO

The bullshit:

The Domino’s Pizza competing proposals dirty trick: where the board proposes a version of the shareholder's proposal that is slightly more onerous: in this case, 25% vs. 15% of shareholders having the the ability to call a special meeting:

Verisk Analytics: 25% (91% YES) vs. 10% special meeting (43% YES)

Equitable Holdings 25% (99% YES) vs. 10% special meeting (27% YES)

THE BIG VOTE PICKS

MATT

Netflix

So what is independence really?

Listing exchange (Nasdaq) says:

"Independent Director" means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

a director who is, or at any time during the past three years was, employed by the Company

a director who accepted or who has a Family Member who accepted any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence

That doesn’t include SEC redefinition…

James Craigie, CEO of Church & Dwight, decision from SEC, was considered independent by 2019 after leaving the CEO role in 2015 but staying on the board

Board “affirmatively” determined that Craigie was independent and had no material relationship with company

The SEC said Craigie “failed to disclose” to the board a close personal friendship with an executive of the company

He was chair of the board at the time, they vacationed together

SEC defined it as “social independence” from the company - but ignored independence from other board members

5 of the 11 board members had been on the board when Craigie was CEO, then executive chair, the independent board member - two of them know him for almost 20 years in a board capacity

Free Float definitions

There’s social independence - lack of connections between directors that are clear and obvious through non profit and other board interlocks - and there’s demographic independence - lack of overlapping experiences or demographic connections, including CEOships, same or similar schooling, race/ethnicity, gender, age overlaps

There’s also the idea of joint probability - we measured for this show the probability that any director got on this board by chance - using connections between directors and work histories

Let’s focus on that for Netflix

Connections:

81% of the Netflix board is connected inside 2 degrees through other public boards and non profit boards alone

Leslie Kilgore was an employee under Hastings until for 12 years until 2012, joined the board right after retiring as an employee, has now been on the board for 13 years

Doesn’t qualify as independent in the UK, but what are the chances she feels like she’s Reed Hastings’ boss?

Jay Hoag is the lead “independent” director who’s been on the board since Clinton’s last year in office, 1999 - he was an original investor in Netflix and sits on 3 other active public boards

What are the chances you’re independent after 25 years on the board?  A quarter century?

Richard Barton was also a VC and investor, he’s been on the board since Bush Jr in 2002 - and at age 57, it means he was 34 when he joined the board when Hastings ran the company and was 41 - might as well be his father

Ann Mather has been there for 15 years and is a longtime tech board member - and is listed as a governance expert

TWO co-CEOs on the board - Ted Sarandos and Greg Peters, both brought up under Hastings

So with Hastings, that’s FOUR Netflix employees or ex employees and TWO early investors in Hastings on a 13 person board - literally half the board has basically worked for Hastings

Mather was is two degrees separated from Kilgore and Hastings, Hoag to Sarandos, Kilgore, and Mather, Dopfner to Mather, Sarandos, and Brad Smith

Even Strive Masiyiwa, who is on no other public boards and is from Africa, is connected to Hastings through the Gates Foundation/MSFT where they had overlapping people in common

Non profits - American Academy in Berlin, American Film Institute, Gates Foundation, and Academy Museum Foundation - is a source of connection between otherwise seemingly unrelated directors

Now Hastings is moving to be non-executive (in 3 years, it would qualify him potentially to be considered “independent”): On April 11, 2025, Reed Hastings informed the Company of his intent to transition from his executive officer position. Effective April 17, 2025, Reed Hastings will transition to serve as Chairman of the board of directors of the Company (the “Board”) and non-executive director.

Probability it’s random

77% of Netflix directors have a 0 or near 0 percent probability of being added to the board through random search - they are hand selected or have clear connections

It ranks in the top 10% of US large cap companies for how non-random the board is

The average company in Netflix sector at their size is 54% random (ie, we don’t know on paper the connections between directors)

Right now, we can’t account for Susan Rice - the newest director

Action Items

So who does a board stacked with non random, hand chosen people represent?  Investors?

From Nasdaq: “It is important for investors to have confidence that individuals serving as Independent Directors do not have a relationship with the listed Company that would impair their independence.”

Netflix is a dominant company, just announced a partnership with OpenAI to predict what you’ll want to watch, and Reed Hastings joined the board of Anthropic

It’s hard to want to vote out a director - but remember, this is the Reed Hastings show

What you want is a COUNTER BALANCE to Hastings as he transitions out - and having two CEOs and an ex exec on the board isn’t that, they’re just Hastings lite

Time to vote out Hoag (longest tenured) and Barton, and pick ONE CEO to be on the board - vote out Peters

Increase independence of directors as founder exits

Netflix SHP #5

The ask

Bowyer Research filed a SHP asking for a report on Charitable Giving and whether it discriminates against particular viewpoints.  

Without irony, they filed on behalf of… Oklahoma Tobacco Settlement Endowment Trust (TSET)

Isn’t a settlement fund from a lawsuit about tobacco designed to combat cancer by definition pretty woke??

Read the footnotes

The SHP cites the 2024 edition of the Viewpoint Diversity Score Business stating: “[it] found that 62% of some of the largest companies in America, including Netflix, support non-profits that are influencing public policy by actively attacking free speech and religious freedom.”

Case study in why the details should be differentiating in SHPs:

The report was written ostensibly by JeremyTedesco of the Alliance Defending Freedom, an anti ESG, anti DEI, religious group

On the advisory council is… Jerry Bowyer, founder of Bowyer Research - he cited basically his own report

Report heralds “wins” for viewpoint diversity that include being cited in two dozen shareholder proposals in 2023-24… in 2025, Bowyer was the only one to cite it, in 2023-24 it was NCPPR and Inspire Investing and other co-anti-wokers in a coordinated effort

Downloading the report - maybe I was the only one? - revealed the report… does not cover Netflix at all

The score itself is the most ESG report I’ve ever seen - it uses “Key Issues”, measuring “subjectivity” and “vague” language in policies, considers “reputational risk” to certain policy omissions and conduct, and loves to identify language that restricts viewpoints… like this at Adobe is bad: "Ads may not capitalize on or lack reasonable sensitivity towards any natural disaster, conflict, death, epidemic, pandemic, tragic event, or public fear."

Then uses public proclamations of religious tolerance, actual support to non-profits that promote “free speech”... like AdF Foundation and Alliance Defending Freedom”, and company policies on how employees can talk.

None of this research covered Netflix

Footnote 2 links to a website not associated with the text (Benevity is mentioned - a private company founded by Bryan De Lottinville - is NOT Double the Donation in the link founded by Adam Weigner), the rest are basically links to Robby Starbuck articles and Heritage Foundation collateral

The data

Netflix doesn’t actually donate much - the employees do - so the ask for Netflix to detail the company risks of charitable giving misunderstands how Netflix charitable giving works

So I pulled employee locations and data on the “most religious states” based on Pew Research polling to figure out what percentage of Netflix employees are likely to say religion is “very important in their lives”

80% of headcount is in California, where less than half the population views religion as very important

Overall, I estimate that 4,907 of Netflix’s 10,405 employees are religious based on a state by state headcount multiplied by the percentage of individuals who identify as strongly religious - that’s 47%

How many religious donation offerings would you expect where the MAJORITY of the staff isn’t religious?

I’ve spent too much time on this - vote no