Proto Labs 2023

Proto Labs 2023: Fair Elections

Proto Labs 2023 Fair Elections is just one of several issues to be voted on before the annual meeting at 6:30 am Pacific on May 17, 2023. Vote AGAINST all directors except Greiner, auditor, pay, incentive plan; FOR Blodgett, Fair Elections #5.  Join the meeting with your control number.

The Shareholder CommonsProto Labs, Inc. and its subsidiaries operate as an e-commerce digital manufacturer of custom prototypes and on-demand production parts worldwide. I voted with the Board’s recommendations 8% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A).  Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons)

Proto Labs 2023: ISS Rating

Proto Labs, Inc.’s ISS Governance QualityScore as of May 1, 2023, is 2. The pillar scores are Audit: 6; Board: 3; Shareholder Rights: 1; Compensation: 4. 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.

Proto Labs 2023: How I Voted

ItemEgan-Jones Vote
1A-1H – Election of DirectorsFOR, WITH EXCEPTION OF
1D) Moonhie K. Chin, 1E) Rainer Gawlick, 1G) Donald G. Krantz, 1H) Sven A. Wehrwein
Against all, except Greiner
2 – Ratification of the Appointment of Independent AuditorsAGAINSTAGAINST
3 – Advisory Vote to Approve Executive CompensationAGAINSTAGAINST
4 – Approval of an Amendment to the Proto Labs, Inc. 2022 Long-Term Incentive PlanAGAINSTAGAINST
5 – Shareholder Proposal “Fair Elections”FORFOR

Proto Labs 2023 Votes ExplainedEgan-Jones

I voted against the Board’s recommendations because I have a setting with iconik: “If the company’s stock price is 25% or below the industry trailing 3-year return (Morningstar™), vote against board recommendations.”  However, I didn’t vote against Greiner, who has only served on the Board for a year. E-J recommended against the pay package as too high, several directors for being on the compensation committee, and others for being over-tenured. They also recommend against auditors that have served longer than 7 years. Ernst & Young has served 12 years, so independence could be compromised.

As You SowIconikappOf course, I voted for our proposal on Fair Elections, #5.

I had help with my voting from Egan-Jones, my own proxy voting policy through Iconikapp. and by briefly looking and some funds that announce their votes in advance. Note: you can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according to values that balance environment, social, governance, and profitability. More information at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconik/AYS app may differ.

Proto Labs 2023: My Fair Elections Proposal

This proposal is from me, James McRitchie. In 2002 I petitioned the SEC for proxy access. It took three rulemakings and a court battle. More than 20 years later, 81% of S&P 500 companies, including Proto Labs, have something called proxy access. Unfortunately, it requires that nominating groups hold 3% for 3 years AND groups are limited to 20 members.

That sets up a situation where proxy access can’t really be done without one of the Big Four fund families. They administer retirement savings plans for companies and have never even filed a shareholder proposal, let alone challenged directors. Therefore, proxy access has gone unused.

Now, after decades, the SEC adopted Rule 14a-19, allowing shareholders, under specified conditions, to split votes between board nominees and challengers without attending annual meetings. But will the universal proxy rule will go the way of so-called proxy access?

After reading bylaws adopted by Masimo, Bloomberg’s Matt Levine speculated that company bylaws might demand challengers submit disclosures on paper woven from unicorn manes, with requirements waived for the board’s nominees.

 We can all agree there should be some limits on what Boards can require without seeking shareholder approval in advance or at least within a year or so of adoption. I filed 30 proposals like the one before you. We reached agreements at about 1/3 of the companies based on guardrails that preserve the rule’s intent.

All shareholder proposals are advisory. Even if we win overwhelmingly, boards are free to ignore them or to adopt whatever they please.

Your vote FOR this proposal can help us reach a similar agreement with Proto Labs, either before the next annual meeting or after an even higher vote next year based on a revised proposal that reflects agreements reached with other companies to protect the rights of shareholders, maybe something like our more recent proposal at Procter and Gamble.

Please Vote FOR proposal Number 5

Other Recommendations

You might want to look up how a few funds voted in our Shareowner Action Handbook.

Proto Labs 2024: Mark Your Calendar

Proposals of our shareholders that are intended to be presented by such shareholders at our 2024 Annual Meeting of Shareholders and that shareholders desire to have included in our proxy materials related to such Annual Meeting must be received by us at our principal executive offices no later than 5:00 p.m. Central Time, December 6, 2023, which is 120 calendar days prior to the anniversary of this year’s mailing date. Upon timely receipt of any such proposal, we will determine whether or not to include such proposal in the proxy statement and proxy in accordance with applicable regulations governing the solicitation of proxies.


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