Cognizant 2023. Fair Elections is just one of several issues to be voted on before the annual meeting at 6:30 am Pacific on June 6, 2023. Vote AGAINST Bali, Deskus, Mackay, Jr., Patsalos-Fox, Velli, Wijnberg, pay, incentive plan; FOR employee stock plan, auditor, fair elections, ratify termination pay. Join the meeting with your control number.
Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. 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. 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)
Cognizant 2023: ISS Rating
Cognizant Technology Solutions Corporation’s ISS Governance QualityScore as of May 30, 2023, is 6. The pillar scores are Audit: 10; Board: 3; Shareholder Rights: 2; Compensation: 5.
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.
Cognizant 2023: How I Voted
|Item||Egan-Jones Recommendation||CorpGov.net Votes|
|1A – 1M – Election of Directors||FOR, EXCEPT 1B) Vinita Bali, 1D) Archana Deskus, 1H) Leo S. Mackay, Jr., 1I) Michael Patsalos-Fox, and 1L) Joseph M. Velli||FOR, EXCEPT 1B) Vinita Bali, 1D) Archana Deskus, 1H) Leo S. Mackay, Jr., 1I) Michael Patsalos-Fox, and 1L) Joseph M. Velli, 1M) Wijnberg|
|2 – Advisory Vote to Approve Executive Compensation||AGAINST||AGAINST|
|3 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation||1 YEAR||1 YEAR|
|4 – Approval of the 2023 Incentive Award Plan||AGAINST||AGAINST|
|5 – Approval of an Amendment of the 2004 Employee Stock Purchase Plan||FOR||FOR|
|6 – Ratification of the Appointment of Independent Auditors||FOR||FOR|
|7 – Shareholder Proposal – Fair Elections||FOR||FOR|
|8 – Shareholder Ratification of Termination Pay||FOR||FOR|
Cognizant 2023 Votes Explained
$18M is too much pay for the former CEO, and a ratio of CEO to median employee pay of 571:1 is also too much, especially for an underperforming company. I agreed with Egan-Jones and voted aginst pay, compensation committee members; For employee stock plan to incentivize employees. I voted against Wijnberg as overboarded.
One of the shareholder proposals was mine (see below), the other was from my friend John Chevedden and is of a type that I often file as well.
Generally, I have 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. Now, you can also sign-up for automated voting with iconikapp through Third Act.
Cognizant 2023: My Fair Elections Proposal
Proposal #7 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 Cognizant, have something called proxy access. Unfortunately, it requires that nominating groups hold 3% for 3 years AND groups are limited to 20 members.
With that limit on the number of group members, proxy access can’t really be done without one of the Big Four. These huge fund families have a conflict of interest because 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.
An alternative to ensure shareholders have a real voice in nominating directors was proposed in 1992. The SEC finally adopted universal proxies, allowing shareholders, under specified conditions, to split votes between board nominees and challengers without attending annual meetings. But universal proxies could go the way of proxy access.
Fair Election Concerns
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 own ‘nominees.
Cognizant’s bylaws allow the Board to request any information “it may reasonably require.” Who determines what is reasonable? The Board, of course, unless you go to court.
Most 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. For 2023, 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.
Shareholder proposals are advisory. Even if we win overwhelmingly, boards are free to ignore them or to adopt whatever they please. But higher votes do make companies, proxy advisors, and even the Big Four take notice.
Your vote FOR this proposal can help us reach an agreement with Cognizant to protect the rights of shareholders.
Please Vote FOR proposal Number 7.
Cognizant 2023: Other Recommendations
You might want to check how a few funds voted. Use our Shareowner Action Handbook.
Cognizant 2024: Mark Your Calendar
Any shareholder proposals submitted in accordance with Rule 14a-8 must be received at our principal executive offices no later than the close of business on December 23, 2023… Company Contacts Board or Secretarycorporategovernance@cognizant.com
…or mail or fax to our principal executive offices, attention to the applicable contact
Cognizant Technology Solutions
300 Frank W. Burr Blvd.
Suite 36, 6th Floor
Teaneck, New Jersey 07666