Marrone Bio Innovations (MBII): is one of the stocks in my portfolio. Their annual meeting is coming up on 5/29/2014. ProxyDemocracy.org had collected the votes of two funds when I checked and voted on 5/23/2014. I voted with management 33% of the time. View Proxy Statement. Read Warnings below. What follows are my proxy voting recommendations for MBII.
Compensation
MBII’s Summary Compensation Table shows CEO Pamela G. Marrone, Ph.D was the highest paid named executive officer (NEO) at about $1.4M in 2013. I’m using Yahoo! Finance to determine market cap ($177M) and Wikipedia’s rule of thumb regarding classification. MBII is a micro-cap company. According to Equilar (page 6), the median CEO compensation at amall-cap corporations was $2.5 million in 2012, so it is hard to tell, but I think is paying within median but we are not given the opportunity to vote on it anyway. MBII is a new company. Their shares have underperformed the NASDAQ over any period I could pull up.
Additional Analysis
GMIAnalyst doesn’t appear to cover MBII yet, so my sources are limited… as is my time to analyze. Insiders own about 46% of the company and they just came out with another public offering that diluted the value of my stock further. This time, I am just going to vote along with Calvert to send a message the corporate governance reforms are needed. At least they don’t have a combined CEO and board chair. I hope to learn more about the company be attending the meeting on 5/29.
CorpGov Recommendations Below – Votes Against Board Position in Bold
| # | PROPOSAL TEXT | CorpGov | ||
1.1 | Withhold | Withhold | Withhold | |
1.2 | Withhold | Withhold | Withhold | |
2 | For | For | Against |
Mark your Calendar
To be considered for inclusion in next year’s proxy materials, your proposal or nominee as a director must be submitted in writing between February 8, 2015 and March 9, 2014 to our Corporate Secretary at 2121 Second St. Suite A-107, Davis, California 95618. If you wish to submit a proposal that is not to be included in next year’s proxy materials, you must do so by December 26, 2014. You are also advised to review our bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
Issues for Future Proposals
Looking at SharkRepellent.net: - Classified board with staggered terms.
- Plurality vote standard to elect directors with no resignation policy.
- Board is authorized to increase or decrease the size of the board without shareholder approval.
- Directors may only be removed for cause and only by the vote of 66.67% of the shares entitled to vote.
- No action can be taken without a meeting by written consent.
- Shareholders cannot call special meetings.
- Supermajority vote requirement (66.67%) to amend certain charter provisions. Supermajority vote requirement (66.67% or 80%) to amend all bylaw provisions.
- Board is authorized to adopt, amend or repeal bylaws without shareholder approval.
Warnings
Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime).I generally vote against pay packages where NEOs were paid above median in the previous year but make exceptions if warranted. According to Bebchuk, Lucian A. and Grinstein, Yaniv (The Growth of Executive Pay), aggregate compensation by public companies to NEOs increased from 5 percent of earnings in 1993-1995 to about 10 percent in 2001-2003.
Few firms admit to having average executives. They generally set compensation at above average for their “peer group,” which is often chosen aspirationally. While the “Lake Woebegone effect” may be nice in fictional towns, “where all the children are above average,” it doesn’t work well for society to have all CEOs considered above average, with their collective pay spiraling out of control. We need to slow the pace of money going to the 1% if our economy is not to become third world. The rationale for peer group benchmarking is a mythological market for CEOs.
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