Marrone Bio Last Chance to Vote 2020

Marrone Bio Last Chance to Vote

Marrone Bio Last Chance to Vote

Marrone Bio Innovation’s AGM is tomorrow, October 29th at 9 AM Pacific. Unless you attend the meeting and vote quickly, today is your last chance. See my voting recommendations.

I (James McRitchie) will present my proposal. It appears on the proxy as follows: #5 “To Consider a stockholder proposal if properly presented at the Annual Meeting.” Yes, that doesn’t tell shareholders what it would do. It is intentional and illegal vote suppression. If you leave an item blank it is automatically filled in as management wants. That’s what they want.

Below is a draft copy of my presentation.

Presentation of Item #5 Phase in Simple Majority Vote Standard

My proposal asks Marrone Bio to phase out supermajority voting requirements over the next four years. Entrenching devices, like supermajority provisions, are associated with lower shareholder valuations.

The top three shareholders at our company are private equity firms. They own close to 110M shares. The combined holdings of the largest two fund families (BlackRock and Vanguard) is only 3.5M shares.

Marrone Bio will remain unattractive to institutional investors as long as amendments require a supermajority vote. And these aren’t just supermajority votes cast, but votes eligible to be cast.

Mainstream funds pay a premium for companies where they have a voice and can hold them accountable. Marrone Bio is missing the mechanisms that allow shareholders to hold the Board accountable. For example, Marrone Bio has:

  • A staggered board
  • No proxy access to run our own candidates
  • Directors can only be removed by shareholders for “cause,” like a crime. Even then, it requires a 2/3rds majority
  • We can’t call special meetings
  • We have no policy requiring directors to ever retire

Founded by a woman, Marrone Bio only has one on the board. That’s ½ the proportion of mainstream firms.

I started buying Marrone Bio seven years ago. I keep hoping it will become profitable. But maybe our private equity overlords make more refinancing our company than if we were profitable.

I hope I’m wrong but we had an expensive accounting scandal due to a lack of oversight. This year, Marrone Bio clearly broke the law, listing my proposal as “To Consider a stockholder proposal, if properly presented at the Annual Meeting.”

SEC rules require proxies to “identify clearly and impartially each separate matter intended to be acted upon.”  Marrone Bio’s description doesn’t come close.

Years ago several companies used this tactic of vote suppression. We got the SEC to issue staff guidance notifying companies to properly identify proposals. The example the SEC used as unacceptable is almost identical to the language Marrone Bio used in describing my proposal. We shouldn’t have to go to court to make our company follow the law.

Let’s bring some accountability to Marrone Bio’s board. This is difficult to do overnight, so my proposal asks for the change to happen over the next four years. Let’s move Marrone Bio into the mainstream. Make it more attractive to investors and more profitable through enhanced accountability.

Vote FOR proposal #5, phase in simple majority vote standards.


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