Amazon 2018 annual meeting is May 30th. View proxy. I do not have time to go through my usual voting rationale. I am too busy with companies where I have a proposal. However, I want to bring to your attention a very important proposal from Bruce Herbert at Newground Social Investments, starting at page 18. The topic is vote counting for shareholder proposals and it goes to the heart of democracy, or lack thereof, at Amazon. Vote today, especially for item 6. Do no let Amazon’s Board rig the vote.
Amazon 2018 Proposal 6: Adopt/Amend Voting Policy
Proposal 6 seeks better governance in the form of equal treatment, transparency, and clarity around how our company’s independent stockholders vote on matters in the proxy.
This proposal is especially important at companies where a disproportionately large number of shares are controlled by founders and senior management, as is the case with Amazon.
The crux of the issue is this:
- Amazon uses a lenient vote-counting formula for its board election.
- It uses a more stringent formula for shareholder items, which depresses the vote.
- This differential treatment harms shareholder interest.
- Amazon’s voting policies are opaque and difficult to understand. ( A sample survey of institutional investors reveals that 90.1% find Amazon’s description of its voting policies to be convoluted and unclear – counter to the board’s assertion that “shareholders are clearly told the effect of an abstaining vote.”)
- In the past ten years, more than 100 shareholder-sponsored items at US companies have been subverted – achieving a true majority when counted as board elections are counted, but failing when counted with the more stringent formula imposed by management on shareholder items.
- ISS printed Amazon’s categorical statement that “vote counting methods apply identically to shareholder-sponsored and management-sponsored proposals,” only to later admit that the board election (a management-sponsored item) is counted differently.
ISS states in its recommendation that: “A simple majority of voting shares should be all that is necessary to effect change regarding a company and its governance provisions,” then failed to object when Amazon included abstentions in the formula for shareholder items. Unfortunately, too many institutional investors have failed to analyze this issue on their own and are blindly following the misinformed recommendation of ISS.
ISS did not interview the proponents of #6, its recommendation employs contradictory logic, and its analysis lacks rigor.
The fact is that Amazon deploys “Formula Swapping” to count certain management items in the proxy differently than shareholder items. Read that article to get the full explanation of how they do it.
For these reasons, please vote FOR Proposal 6 – simple majority vote-counting – on the Amazon proxy.
In voted right in line with the recommendations of proxy advisor Egan-Jones.
- Directors: AGAINST 1A) Jeffrey B. Bezos, 1B) Tom A. Alberg, and 1G) Thomas O. Ryder
- Ratify Auditor: AGAINST
- Advisory Vote on Executive Compensation: FOR
- Shareholder Proposal Regarding Diverse Board Candidates: FOR (Amazon’s board adopts shareholder-backed diversity proposal)
- Shareholder Proposal Regarding a Policy to Require an Independent Board Chair
- Shareholder Proposal Regarding Vote-Counting Practices for Shareholder Proposals