NextEra Energy 2021 annual meeting is May 20, 6 AM Pacific Time. To attend, vote, and submit questions during the Annual Meeting you will have to go to 20455 State Highway 249, Suite 200, Houston, Texas. The Company will provide a live audio webcast of the annual meeting from its website. Of course, I recommend voting in advance. To enhance long-term value. Vote AGAINST Barrat, Carmaren, Dunn, Lane, Robo, Schupp, Wilson, Auditor, Pay, and Long-Term Inventive. Vote FOR Written Consent.
NextEra Energy, Inc., through its subsidiaries, generates, transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, and fossil fuel, such as coal and natural gas facilities. NextEra Energy, founded in 1925, is headquartered in Juno Beach, Florida. Most shareholders do not vote. Reading through 105 pages of the proxy takes time but your vote could be crucial. Below, how I voted and why.
If you have read these posts related to my portfolio and proxy proposals for the last 25 years and trust my judgment, skip 7 minutes of reading. See how I voted my ballot. Voting will take you only a minute or two. Every vote counts.
NextEra Energy, Inc 2021: ISS & Sustainalytics Ratings
From the Yahoo Finance profile page: NextEra Energy, Inc.’s ISS Governance QualityScore as of April 30, 2021 is 3. The pillar scores are Audit: 1; Board: 8; Shareholder Rights: 2; Compensation: 5.
Nextera Energy 2021: Board Proposals
Egan-Jones Proxy Services recommends against 1B) JAMES L. CAMAREN, 1C) KENNETH B. DUNN, 1H) JAMES L. ROBO, AND 1I) RUDY E. SCHUPP. Directors who served for longer than 10 years are not independent. Robo, as Chairman of the Board (and CEO, in this case), should be held responsible for inadequate cybersecurity. Additionally, I voted against members of the compensation committee, since I voted against Pay: Hachigian (Chair), Sherry S. Barrat, James L. Camaren, Amy B. Lane, Darryl L. Wilson.
Vote: AGAINST Barrat, Carmaren, Dunn, Lane, Robo, Schupp, and Wilson.
I have no reason to believe the auditor engaged in poor accounting practices or has a conflict of interest. Egan-Jones recommends voting against the auditor if they served for seven years. Independence becomes compromised by that time. Deloitte and Touche served 71 years. No other issues appear significant
NextEra Energy Summary Compensation Table shows the highest paid named executive officer (NEO) was CEO James Robo at $23.7 M. I’m using Yahoo! Finance to determine market cap ($146.2 B) and I define large-cap as $10B, mid-cap as $2-10B, and small-cap as less than $2B. Nextera is certainly a large-cap company.
According to MyLogIQ, the median CEO compensation at large-cap corporations was $13M in 2020. CEO James Robo’s pay at $23.7M is above that amount. Nextera shares underperformed the Nasdaq over the most recent one-, two-, and five-year time periods. The ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees was 155 to 1.
Egan-Jones Proxy Services found pay aligned with the long-term interest of its shareholders. They recommend voting For. Given my concern for the growing wealth disparity, underperformance, and high pay ratio, I did not. That also led me to vote against members of the compensation committee.
Egan-Jones recommend For. Since I voted Against Pay and see CBIS and Trillium voted Against this item, I did as well.
NextEra Energy 2021: Shareholder Proposals
This good corporate governance proposal comes from Myra Young. I, James McRitchie, wrote it. Of course, we voted FOR. Egan-Jones also recommends For. Our similar proposal won more than 45% of the vote last year when both ISS and Glass Lewis recommended For.
Many boards and investors assume a false equivalency between rights of written consent and special meetings. However, any shareholder, regardless of how many (or few) shares she owns, can seek to solicit written consents on a proposal.
By contrast, calling a special meeting may require a two-step process. A shareholder who does not own the minimum shares required must first obtain the support of other shareholders. Once that meeting is called, the shareholder must distribute proxies asking shareholders to vote on the proposals presented at the special meeting. This two-step process can take more time and expense than the one-step process of soliciting written consents.
Proxy Insight reported no votes when I last checked.
In looking up a few funds in our Shareowner Action Handbook, I see Norges voted Against Robo: For all other items. Calvert voted Against Barrat and Robo; For all other items. CBIS voted Against the auditor and stock plan; For all other items. NYC Pensions voted For all items. Trillium voted Against all items except Utter, Auditor, and Written Consent. They voted For those items.
- Directors: AGAINST Barrat, Carmaren, Dunn, Lane, Robo, Schupp, and Wilson.
- Auditor: AGAINST
- Executive Pay: AGAINST
- Long Term Incentive Plan: AGAINST
- Shareholder Right to Act by Written Consent: FOR
NextEra Energy 2021: Issues for Future Proposals
Looking at insightia for anti-shareholder provisions:
- No requirement to separate CEO and Chair
- Written consent not allowable
NextEra 2022: Mark Your Calendar
Rule 14a-8 proposals for the 2022 annual meeting of shareholders must be received by the Corporate Secretary at our principal executive offices by December 1, 2021. The submission of such proposals by shareholders is subject to regulation by the SEC pursuant to Rule 14a-8.
Shareholder proposals must be sent to the attention of the Corporate Secretary by mail (U.S. certified mail in the case of proposals required to comply with the advance notice provisions of the Bylaws), by personal delivery to NextEra Energy, Inc., P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420 or by facsimile to 561-691-7702.
Be sure to vote for each item on the proxy. Any items left blank get 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.” Peer groups are often chosen by aspiration. The “Lake Woebegone effect” may be nice in fictional towns, “where all the children are above average.” However, corporations live in the real world. All CEOs are above average. Ignoring that fact partly explains why their collective pay spiraling out of control. We need to slow the pace of money going to the 1% or our economy will fail to serve the majority. The rationale for peer group benchmarking is a mythological market for CEOs. For more on the subject, see CEO Pay Machine Destroying America.