Impinj 2021

Impinj 2021 Vote Proxy Access

Impinj 2021 annual meeting is June 10, 9 AM Pacific Time. To attend, vote, and submit questions during the Annual Meeting visit here. You will need the 16-digit control number provided on your proxy card or voting instruction form. I recommend voting in advance. Enhance long-term value so that Impinj lives up to its full potential. Vote FOR All Directors, Auditor, and Proxy Access. 

Impinj, Inc. operates a cloud connectivity platform. Its platform, which comprises multiple product families, wirelessly connects individual items and delivers data about the connected items to business and consumer applications. Most shareholders do not vote.  Reading through 35+ 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.

I voted with the Board’s recommendations 80% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).

Read warnings below. What follows are my recommendations on how to vote the proxy in order to enhance corporate governance and long-term value.

Impinj 2021: ISS Ratings

Impinj, Inc.’s ISS Governance QualityScore as of April 30, 2021, is 9. The pillar scores are Audit: 5; Board: 9; Shareholder Rights: 5; Compensation: 10.

Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk. We need to pay close attention to Board and Compensation.

Impinj 2021: Board Proposals

1. Directors

Total compensation last year for our CEO Chris Diorio was $3.2M, less than the median $3.8 to small-cap CEOs. Additionally, Impinj has outperformed small-caps during the latest 1, 2, and 5-year periods, so the pay is at least crudely aligned with performance.

Vote: FOR all directors.

2. Ratification of Independent Auditor

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. Ernst & Young has only served one year.

Vote: FOR

Shareholder Proposals

3. Proxy Access

This good corporate governance proposal comes from me, James McRitchie, so of course I voted FOR. The Board takes no position.

In 2002 I petitioned the SEC to allow proxy access proposals. It took 8 years for the SEC to finally agree and adopt a rule allowing shareholders to request it at individual companies.  By now, 77% of S&P 500 companies have now adopted and proxy access is spreading to smaller companies like Impinj.

Proxy Access in the United States: Revisiting the Proposed SEC Rule, a cost-benefit analysis by CFA Institute, found proxy access would “benefit both the markets and corporate boardrooms, with little cost or disruption.” It would do that by raising US market capitalization by up to $140.3 billion. Public Versus Private Provision of Governance: The Case of Proxy Access found a 0.5 percent average increase in shareholder value for proxy access targeted firms.

However, the evidence is in. Although proxy access initially raises the value of companies that adopt it, implementation has been problematic. Most place a limit of 20 on the number of shareholders that can participate in a nominating group. Look at the largest shareholders at Impinj. Most have never even filed a shareholder proposal. They are unlikely to form a group to nominate directors. Because of the common 20 member group limit, proxy access has not been used and its true value has not been realized.

This proposal is likely to pass. When it does, it is important that Impinj respect the central request of the proposal, which is to implement proxy access with no limit on the number of shareholders forming a nominating group. That is crucial in providing shareholders a stronger voice. Real proxy access creates a more competitive environment for directors. They know if they fail, shareholders can replace them. I do not expect that need to arise at Impinj but having proxy access in the toolbox in case we do eventually need it is a good idea. Proxy access increases the value of your shares by keeping directors focused on shareholders.

Vote: FOR

Impinj 2021 CorpGov Recommendations

Proxy Insight

Proxy Insight reported no votes when I last checked. 

In looking up a few funds in our Shareowner Action Handbook, Calvert votes Against Gibson based on less than 40% diversity and failure to address supermajority requirement; For all other items.


CorpGov Votes:

  1. Directors: FOR all
  2. Auditor: FOR
  3. Proxy Access: FOR

Impinj 2021: Issues for Future Proposalsinsightia

Looking at insightia for anti-shareholder provisions:

  • No requirement to separate CEO and Chair.
  • Written Consent not provided for shareholders.
  • Special Meetings cannot be called by shareholders.
  • Shareholders have no right to Proxy Access.
  • A Supermajority vote is required to amend bylaws.

Impinj 2022: Mark Your Calendar

To be considered for inclusion in our proxy statement for our 2022 annual meeting of stockholders, our corporate secretary must receive the written proposal at our principal executive office not later than December 30, 2021. Stockholders should address proposals to: Impinj, Inc., 400 Fairview Avenue North, Suite 1200, Seattle, WA 98109. Phone (206) 517-5300

Related Posts

Invitae 2021 Proxy Votes

NCR: Proxy Access & Pay Issues

Warnings

Be sure to vote for each item on the proxy. Any items left blank get automatically 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.

   

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