Invitae 2022

Invitae 2022 Proxy Scorecard 40

Invitae 2022 annual meeting is June 6, 2022, at 4:00 pm Pacific. It is a virtual-only meeting on the Broadridge platform. Of course, I recommend voting in advance, especially since many companies cut off voting as soon as proposals have been presented. To enhance corporate governance and long-term value, vote Against Eric Aguiar, Sean E. George, Pay: FOR Declassify the Board of Directors. 

Invitae Corporation, a medical genetics company, integrates genetic information into mainstream medicine to improve the healthcare of people in the United States, Canada, and internationally. Below, is how I voted and why in short format.

I voted with the Board’s recommendations 40% of the time, so awarded a Proxy Score 40 out of 100. 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.

Invitae 2022: ISS Rating

From the Yahoo Finance profile page: Invitae Corporation’s ISS Governance QualityScore as of May 1, 2022, is 6. The pillar scores are Audit: 5; Board: 3; Shareholder Rights: 7; Compensation: 7. 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.

Invitae 2022: CorpGov Recommendations

Proxy ItemCalvertCorpgov
1aElect Director Eric Aguiar

Rationale: The board comprises fewer than two people of color or is less than 40% diverse overall.–WITHHOLD votes are warranted for incumbent directors Eric Aguiar and Sean George given the board’s failure to remove, or subject to a sunset requirement, the classified board and the supermajority vote requirement to enact certain changes to the governing documents, each of which adversely impacts shareholder rights.
WithholdWithhold
1bElect Director Sean E. George

Rationale: WITHHOLD votes are warranted for incumbent directors Eric Aguiar and Sean George given the board’s failure to remove, or subject to a sunset requirement, the classified board and the supermajority vote requirement to enact certain changes to the governing documents, each of which adversely impacts shareholder rights.
WithholdWithhold
2Increase Authorized Common Stock

Rationale: A vote FOR the proposal is warranted given that the size of the proposed increase is reasonable and there are no substantial concerns about the company’s past use of shares.

ForFor
3Advisory Vote to Ratify Named Executive Officers’ Compensation

Rationale: The company’s long-term incentive compensation is not sufficiently tied to financial performance.
AgainstAgainst
4Ratify Ernst & Young LLP as Auditors

Rationale: In the absence of further concerns, a vote FOR is warranted.
ForFor
5Declassify the Board of Directors

Rationale: A vote FOR this proposal is warranted because the declassification would enhance board accountability.
ForFor

Invitae 2022: Proxy Voting Notes

CEO pay at $8.8M seems high to me for a small-cap of less than $1B and is not adequately aligned with creating shareholder value, as can be seen from the above chart comparing the stock value with the Nasdaq. The CEO-to-worker pay ratio was 54:1. I voted AGAINST Executive Compensation and so would normally vote against members of the Compensation Committee (Crouse, Aguiar, Gorjanc). However, because of the classified board, I vote against both directors up for election.
Ernst & Young LLP has been Invitae’s auditor for 9 years. At some point, auditors can lose their independence if the relationship is too long. Given the absence of other concerns, I voted For.

Declassify the Board

The opposition statement says three-year terms attract and help retain highly qualified directors. That is absurd on its face. Almost 90% of S&P 500 and Fortune 500 companies have adopted this vital reform. Annual elections are widely viewed as a best practice. Most investors believe the annual election of each director makes directors more accountable, thereby improving performance and increasing company value.

Shareholder resolutions on this topic won 16 of 18 votes at companies in 2019, 2020, and 2021, most by a wide margin.

Other Recommendations

In looking up a few funds in our Shareowner Action Handbook, I see several funds have reported their votes.  You can see Calvert’s votes above. NYC pensions voted against both directors and For all other measures.

Issues for Future Proposalsinsightia

Looking at insightia for anti-shareholder provisions:

  • No requirement for an independent Chair
  • Shareholders cannot take action by written consent or convene special meetings
  • Supermajority requirements

Invitae 2023: Mark Your Calendar

To be considered for inclusion in the Company’s proxy statement for the 2023 annual meeting of stockholders, stockholder proposals must be received by the Secretary of the Company no later than December 22, 2022. Proposals should be sent to our Secretary at Invitae Corporation, 1400 16th Street, San Francisco, California 94103. These proposals also must comply with the stockholder proxy proposal submission rules of the SEC under Rule 14a-8 of the Exchange Act. Proposals we receive after that date will not be included in the proxy statement.

Related Posts

Invitae 2021 Proxy Votes

Alarm.com 2020 Declassify Board

, , , , , , , , , , , ,

No comments yet.

Leave a Reply

Powered by WordPress. Designed by WooThemes