Lantheus Holdings 2022 annual meeting is on April 28, 2022, at 7:00 am Pacific. To attend the meeting virtually on the Mediant platform you will need to register in advance using your proxy control number. Be prepared to provide broker name, number of shares held as of record date, etc. You also have the opportunity to ask questions. Inspired by John Chevedden, I asked, “What have been the primary sources for successful director nominations during the last 5-years?”
I recommend voting in advance, especially since they have made it very difficult to vote at the meeting (obtain a legal proxy and e-mail it to DSMSupport@mediantonline.com) and maybe even to enter the meeting. The physical meeting will be held at the Boston Logan Airport Hotel. I am happy to see they are holding a hybrid meeting. I just wish attending and voting virtually was less onerous. To enhance corporate governance and long-term value, vote Against Ber, Leno, Equity Plan, Auditor. Vote FOR #5 Proxy Access, Heino & Pay.
Lantheus Holdings, Inc. develops, manufactures, and commercializes diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of heart, cancer, and other diseases worldwide. Below, is how I voted and why.
I voted with the Board’s recommendations 50% 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.
Lantheus Holdings 2022: ISS Rating
From the Yahoo Finance profile page: Lantheus Holdings, Inc.’s ISS Governance QualityScore as of April 1, 2022 is 4. The pillar scores are Audit: 4; Board: 6; Shareholder Rights: 5; Compensation: 3.
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.
Lantheus Holdings 2022: CorpGov Proxy Voting Recommendations
| Item | Egan-Jones Recommendation | CorpGov.net Recommendation |
|---|---|---|
| 1.1-1.3 – Election of Directors | FOR, EXCEPT 1.2) Gerard Ber, 1.3) Leno | FOR, EXCEPT 1.2) Gerard Ber, 1.3) Leno |
| 2 – Advisory Vote to Approve Executive Compensation | FOR | FOR |
| 3 – Approval of the Amendment to 2015 Equity Incentive Plan | AGAINST | AGAINST |
| 4 – Ratification of the Appointment of Independent Auditors | AGAINST | AGAINST |
| 5 – Shareholder Proposal Regarding Proxy Access | FOR | FOR |
Lantheus Holdings 2022: Proxy Voting Notes
Leno has served since 2012, so independence is questionable. Ber serves on the compensation committee. Although E-J finds CEO compensation and CEO to worker pay ratio was 43 to 1, they believe the Board “should reduce the cost of any similar plan that may be proposed in the future.” I would be more inclined to vote for an incentive plan if the Board committed to specifying that a large proportion of the incentive stock would be awarded to middle and lower-level employees. Ideally, I would like awards to be reported by EEO-1 category or some other meaningful breakdown by employee level.
Deloitte & Touche LLP has served as the auditor for 15 years. At some point, auditors can lose their independence if they stay too long.
Proposal #5: Shareholder Proxy Access
With regard to proposal #5, asking for shareholders to have the right to proxy access – Egan-Jones notes: “shareholders should have the right to nominate their own representatives.” The proposal was written by me (James McRitchie), so of course, I voted in favor, as will most shareholders. This is simply good governance. Almost 80% of the S&P 500 and 22% of the Russell 3000 have embraced proxy access. Although the Board did adopt proxy access, prompted by my proposal, they adopted a weak form that is essentially unworkable.
As the proposal states: “the most essential feature requested is that shareholders forming a nominating group not be limited with regard to the number in a participating group.”
As cited in the proposal 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,” rising US market capitalization by up to $140.3 billion.
That estimate was based on proxy access having no limit with regard to the number in a participating group. The vast majority of companies have limited groups to a maximum of 20 members. As a result, proxy access has only been used once, to return a founder to the board. The anticipated economic benefits of proxy access have failed to materialize.
The Board contends “our top 25 stockholders each hold 1%. They could combine with smaller stockholders, to form a group of 20 that would satisfy the 3% threshold.” However, such a scenario lacks credibility. The vast majority of those top stockholders have a business model based on low-cost indexing. They have never filed a shareholder proposal, so are highly unlikely to form a group to use proxy access, a more time-consuming and expensive activity.
Other Recommendations
Proxy Insight had not reported any when I last checked. I am posting this relatively early, since there is a surge of votes due soon and I have too many proxies to analyze.
If curious, you might try looking up a few funds in our Shareowner Action Handbook. Several funds may have reported their votes by the time you read this. Ideally, it is best to wait until 5 days before votes are due to see how others have voted. On 4/19 I checked and Calvert had voted. They voted for all items, including #5 proxy access, except they voted against Leno. The board comprises fewer than two people of color or is less than 40% diverse overall.–WITHHOLD votes are further warranted for governance committee member Samuel Leno given the board’s failure to remove, or subject to a sunset requirement, the classified board which adversely impacts shareholder rights.
Lantheus Holdings 2022: Issues for Future Proposals
Looking at insightia for anti-shareholder provisions:
- No requirement to separate CEO and Chair
- Election of unopposed directors requires only the vote of one share
- Classified board
- Shareholders cannot take action by written consent
Lantheus Holdings 2022: Mark Your Calendar
Stockholder proposals intended to be presented at the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”), pursuant to Exchange Act Rule 14a-8 must be delivered to the Corporate Secretary at our principal executive offices no later than November 18, 2022 in order to be included in our proxy materials for that meeting. These proposals must also comply with all applicable provisions of Exchange Act Rule 14a-8 and our Bylaws.
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