Stryker 2023 Political Disclosure is up for a vote during the AGM at 6 am Pacific on May 10, 2023. Vote AGAINST all directors, auditor, and executive pay; FOR #5 Political Disclosure.
Stryker Corporation operates as a medical technology company. The company operates through two segments, MedSurg and Neurotechnology, and Orthopaedics and Spine. I voted with the Board’s recommendations 7% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Read Warnings.
Stryker 2023: ISS Rating
Stryker Corporation’s ISS Governance QualityScore as of April 1, 2023, is 5. The pillar scores are Audit: 6; Board: 4; Shareholder Rights: 6; Compensation: 6. 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.
Stryker 2023: How I Voted
|Item||Egan-Jones Recommendation||Management Recommendation|
|1A-1J – Election of Directors||FOR, EXCEP 1A) MARY K. BRAINERD, 1B) GIOVANNI CAFORIO, MD, 1D) ALLAN C. GOLSTON, 1F) SHERILYN S. MCCOY, 1G) ANDREW K. SILVERNAIL, and 1I) RONDA E. STRYKER||AGAINST ALL: I voted against: members of the compensation committee because of excessive pay; directors that have served more than 12 years; the combined CEO/Chair; members of the audit committee because of excessive non-audit fees. That left no one for vote in favor of.|
|2 – Auditor||AGAINST||AGAINST (Given the excessive non-audit fees to the auditor, AGAINST is warranted. They have also had the same auditor for 75 years.)|
|3 – Executive Compensation (Pay)||AGAINST (Pay policies not effective or strongly aligned with the long-term interest of its shareholders.)||AGAINST (CEO pay exceeds the 75th percentile of peers and the company’s performance is below the 75th percentile of the peer group. The pay ratio of CEO to a median employee exceeds 200%.|
|4 – Frequency of Future Say on Pay Votes||1 YEAR||1 YEAR|
|5 – Shareholder Proposal Political Disclosure||AGAINST||FOR|
Stryker 2023 Votes Explained
Briefly, Egan-Jones recommended against several directors on the compensation committee (when EG recommended against pay). They also recommended against three directors for lack of independence (family members or over tenured) and the auditor for serving too long (losing independence).
Of course, I voted for our proposal on pay equity disclosure (see below). Egan-Jones discusses the need for the ability for companies to lobby. However, our proposal includes the following: “This proposal does not encompass lobbying spending.”
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, each of which voted for proposal #5.
Stryker 2023: Our Political Disclosure Proposal
This proposal is from Myra Young, written by me, James McRitchie. Stryker’s refusal to even consider more transparency is disheartening, especially given our political atmosphere.
Stryker is in the very bottom tier of the 2022 CPA-Zicklin Index of Corporate Political Disclosure and Accountability. That low ranking doesn’t seem to bother the Board enough to work with the Center for Political Accountability to improve Stryker’s score.
Still, reputation and good citizenship should matter. Although Stryker’s opposition statement says they “do not directly make contributions or expenditures, they ignore indirect contributions, such as thos opened by Citizens United.
If Stryker makes no political contributions, directly or indirectly, we should be at the top instead of the bottom tier. However, it is unclear if Stryker prohibits or limits the use of contributions or dues to independent expenditure committees, trade associations, tax-exempt, and other groups to support political causes or candidates. Many companies explicitly limit the use of corporate funds for such activities. Moving up from the bottom tier of companies would require additional disclosure or direction to some partners. Stryker’s Board appears unwilling to bother with any such effort.
In looking up a few funds in our Shareowner Action Handbook, I see several funds have reported their votes. All voted FOR #5.
Stryker 2024: Mark Your Calendar
SEC Rule 14a-8 permits shareholders to submit proposals for inclusion in our proxy materials if the shareholders and the proposals meet the specified requirements. If you would like to submit a proposal under SEC Rule 14a-8 for inclusion in the proxy materials for our 2024 annual meeting, the proposal must be received by our Vice President, Corporate Secretary at 2825 Airview Boulevard, Kalamazoo, Michigan 49002 on or prior to November 29, 2023.
The preliminary vote count announced at the meeting found our proposal on political disclosures won about 37% of the vote. I hope this acts as a wake-up call for our directors. With a little bit of effort, Stryker could go from ranking in the bottom tier to ranking in the top tier. Dark money carries a toll and can have bad consequences for our company and the nation.