Eliminate Supermajority Voting Requirements
Proposal #6 asks the Board to eliminate supermajority voting requirements, seeking instead, that decisions by shareholders be made based on a majority of the votes cast for and against proposals.
The Board of Salesforce argues the following items should require a 2/3 vote: (i) removal of any or all directors; (ii) adoption, amendment or repeal of the Company’s bylaws; and (iii) amendment to certain provisions in the Company’s certificate of incorporation. I disagree and so do most boards. For example, only 16% of S&P 500 companies require a supermajority to remove directors.
The Council of Institutional Investors has the following policy:
A majority vote of common shares outstanding should be sufficient to amend company bylaws or take other action that requires or receives a shareowner vote.
Most funds don’t announce their votes in advance but all four that have, voted in favor of this proposal (Texas Teachers, CBIS, Calvert, Trillium)
Looking at our largest institutional investors (Fidelity, Vanguard, T. Rowe Price, BlackRock and State Street) — all have policies favorable to a simple majority standard:
Fidelity will vote against supermajority vote requirements.
Vanguard will support proposals to remove supermajority requirements and oppose proposals to impose them.
A simple majority vote will strengthen our Company’s corporate governance. Contrary to supermajority voting, a simple majority standard will give all shareholders equal and fair representation based on the number of shares we own.
Vote FOR Proposal 6
Eliminate Supermajority Voting Requirements and Enhance Shareholder Value
See prior post, Salesforce 2018 Needs Governance Tweaks.