AVAV 2023. Board Declassification is just one of several issues to be voted on before or during the AeroVironment (AVAV) annual meeting on September 29, 2023, at 9:00 am Pacific. Attend the annual meeting online. Vote in advance. To vote in person at the virtual annual meeting, you must first obtain a valid legal proxy and then register by September 8th to attend the annual meeting. Few will go through that time-consuming process unless they are testing to see if it works.
Vote AGAINST Stephen Page, FOR item #6 to Declassify the Board. If you vote online and leave the rest blank, those blanks will be filled in, not as abstentions, but as if you had voted as the Board recommends. That’s corporate governance at work in America. It will be fine at AVAV this year since the other measures are acceptable. Just vote AGAINST Stephen Page, FOR item #6 to Declassify the Board.
AeroVironment, Inc. designs, develops, produces, delivers, and supports a portfolio of robotic systems and related services for government agencies and businesses in the United States and internationally. I voted with 75% of the Board’s recommendations. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Or, look it up on CapEdge, which offers many free tools.
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)
AVAV 2023: ISS Rating
AVAV’s ISS Governance QualityScore as of September 1, 2023, is 5. The pillar scores are Audit: 9; Board: 4; 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.
AVAV 2023: How I Voted (CorpGov.net)
|1A-1C – Election of Directors||FOR, except (1C) Stephen Page|
|2 – Ratification of the Appointment of Independent Auditors||FOR|
|3 – Advisory Vote to Approve Executive Compensation||FOR|
|4 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation||1 YEAR|
|5 – Approval of AeroVironment, Inc. 2023 Employee Stock Purchase Program||FOR|
|6 – Shareholder Proposal Regarding Declassification of the Board of Directors||FOR|
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I voted against Steven Page for several reasons. Like Egan-Jones, in general, directors should be considered affiliated after ten years or more, except possibly for diverse nominees. Audit, Compensation, and Nominating committees should be comprised solely of Independent outside directors for sound corporate governance practice. Calvert also voted Against it, given that Page chairs the nominating committee and the board lacks diversity.
AVAV 2023: Declassify the Board
Of course, I voted for James McRitchie’s proposal #6. I always vote for my proposals. You can set your settings in the Iconikapp to always vote for my proposals.
As Egan-Jones notes: It is intuitive that when directors are accountable for their actions, they perform better. We therefore prefer that the entire board of a company be elected annually to provide appropriate responsiveness to shareholders. Calvert notes declassification would enhance board accountability.
The Board’s opposition statement argues:
In 2022, following engagement and feedback received from our stockholders, the board approved amendments to the company’s Amended and Restated Bylaws to institute a resignation requirement for incumbent directors who fail to achieve a majority vote in uncontested elections and to allow for director nomination through proxy access.
The proposal seeking a majority vote requirement came from me. Without that proposal, it is doubtful that the Board would have put that issue to a vote. The Board is not proactively seeking more democratic corporate governance. The Opposition Statement further notes:
Additionally, after a proposal to declassify the board was passed at the 2014 annual meeting, the board recommended in favor of a management proposal at the 2015 annual meeting to declassify the board, which proposal narrowly failed following a vote.
In 2015, 93.3% of shares voted to declassify the board. Unfortunately, AVAV’s Certificate of Incorporation requires the approval of 66.67% of outstanding shares. The vote to declassify fell short by 2.47% since 93.3% in favor represented only 64.2% of the outstanding shares on the record date voted to approve the amendment.
In other words, more shareholders should have bothered to vote. Many people have a similar problem with their homeowner’s association. It might take a 2/3 majority of all homeowners to change a required tree variety for specific properties, but only 10% of homeowners typically vote. Even though the climate has changed and the original tree type is no longer viable, homeowners are stuck.
At AVAV, we aren’t stuck. We need a small number of additional shareholders to vote, maybe using Iconikapp or some other automated process. We can get there. Getting better board accountability isn’t an impossible goal at AVAV.
Please Vote FOR proposal Number 6.
AVAV 2024: Mark Your Calendar
Stockholders may submit proposals on matters appropriate for stockholder action at meetings of our stockholders in accordance with Rule 14a-8 promulgated under the Exchange Act. To be eligible for inclusion in the proxy statement relating to our 2024 annual meeting of stockholders, proposals of stockholders must be received at our principal executive offices no later than April 26, 2024 (120 calendar days prior to the anniversary of the date of the proxy statement for our 2023 annual meeting released to stockholders) and must otherwise satisfy the conditions established by the SEC for stockholder proposals to be included in the proxy statement for that meeting. However, in the event that the date of our 2024 annual meeting is more than 30 days before or after the anniversary of our 2023 annual meeting, a stockholder proposal will be timely if received at our principal executive offices a reasonable time before we begin to print and send our proxy materials for the 2024 meeting.