Kellanova 2024 Paygap Report

Kellanova 2024 Paygap Report

Kellanova 2024. Myra K. Young and  James McRitchie’s proposal for a Paygap report is one of several items to be voted on before or during the Kellanova Company (K) annual meeting on April 26, 2024, at 10:00 a.m. Pacific. Attend the annual meeting online. I suggest you vote in advance. However, you can also vote during the meeting with your control number IF voting isn’t cut off right after all proposals have been presented.

Vote AGAINST the directors, Pay, Auditor, #8 Greenwashing Risk. FOR items #4, #5, #6, & #7. Note: If you vote online and leave blanks, those blanks will be filled in, not as abstentions, but as if you had voted as the Board recommends. That’s not exactly democratic corporate governance.

Kellanova, together with its subsidiaries, manufactures and markets snacks and convenience foods in North America, Europe, Latin America, the Asia Pacific, the Middle East, Australia, and Africa. I voted with 18% of the Board’s recommendations. You can view the Proxy Statement via the SEC’s EDGAR system (look for DEF 14A) or on LEXexamples or CapEdge, which offer many free tools.

The Shareholder CommonsRead 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) I take a systems approach.

ISS Rating

Kellanova’s ISS Governance QualityScore as of April 1, 2024, is 7. The pillar scores are Audit: 4; Board: 7; Shareholder Rights: 8; 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.

Kellanova 2024: How We Voted

ItemEgan-Jones RecommendationCorpGov.net Votes
1 – Election of DirectorsFor, Except
1B. Zack Gund and 1C. Don Knauss
AGAINST ALL
2 – Advisory Vote to Approve Executive CompensationAgainstAGAINST
3 – Ratification of the Appointment of Independent AuditorsAgainstAGAINST
4 – Approve Restated Certificate of Incorporation to Reflect Recent Delaware Law Provisions Regarding Officer ExculpationForFOR
5 – Shareowner Proposal Requesting the Adoption of a Policy Requiring the Board Chair to be an Independent DirectorForFOR
6 – Shareowner Proposal Requesting Racial and Gender Pay Gap DisclosuresForFOR
7 – Shareowner Proposal to Report on the Risks to the Company Associated with Pesticide Use in its Supply ChainForFOR
8 – Shareowner Proposal to Reduce Company Greenwashing RiskForAGAINST

Kellanova 2024: Considerations and Recommendations

I was helped with my voting advice from Egan-Jones and my proxy voting policy through iconikapp. Some funds announced their votes in advance.  Norges voted for and against shareholder proposals the same way I did.

Egan-Jones

Free Proxy Advisor From As You Sow & IconikappYou 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 is available at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconikapp.com may differ. Iconikapp

Kellanova 2024: Directors

I voted Against compensation committee directors as per the recommendation from Egan-Jones. The CEO’s total pay is high at $17M and was 322 times the median employee pay. However, I also have my own rule through iconik to vote against the board if the company’s stock price is 25% or below the industry trailing 3-year return (Morningstar™). That can be a little too strict, so I could override it. In this case, however, withholding votes based on underperformance is warranted. Take a look at the chart at the top comparing Kellanova’s performance against the S&P 500. What’s your opinion?

Kellanova 2024: Items #2-4

As stated above, vote AGAINST pay. The CEO’s total pay is high at $17M, was 322 times the median employee pay, and the company is underperforming.

Vote AGAINST the Auditor. Even with auditor rotation within the contracted firm, I agree with Egan-Jones that, over time, many are essentially captured. They are troubled when a company contracts with the same firm for over 7 years. Kellanova’s auditor has been PricewaterhouseCoopers LLP for 87 years. That’s too long.

Vote For the Board’s Amendment to Restated Certificate of Incorporation to Reflect Recent Delaware Law Provisions Regarding Officer Exculpation. I will go with Calvert on this one. “A vote FOR this proposal is warranted, as the exculpation provision permitted by Delaware law is considered to reasonably balance shareholders’ interest in officer accountability with their interest in attracting and retaining qualified officers to serve the company.”

Kellanova 2024: Item #5 Shareholder Proposal: Split Chair and CEO Roles

Having an inside director serve as the chairman of the board creates an inherent potential conflict. Consequently, we prefer that companies separate the roles of the Chairman and CEO and that the Chairman be independent to further ensure board independence and accountability. That’s E-J’s recommendation, and I agree.

Kellanova 2024: Item #6 Shareholder Proposal: Requesting Racial and Gender Pay Gap Disclosures

This Proposal seeks transparent disclosure of racial & gender pay gaps. Research demonstrates that for the US as a whole:

  • White women won’t reach pay equity until 2059.
  • Black women will take until 2133, and
  • Latina women 2206 – nearly two centuries from now.

In brief, there are two generally accepted types of pay gap disclosure.  Both are needed because they measure different things. Kellanova reports statistically adjusted gaps but ignores unadjusted medium pay gaps, which address the structural bias marginalized groups such as women and minorities face regarding job opportunities and pay. Unadjusted median pay gaps measure, quite literally, how Intuitive assigns value to employees through the roles they inhabit and the pay they receive.

Why is this information important? First, companies with fair pay and equal opportunity gain two competitive advantages: They attract and retain top talent. Fairness and equity are crucial to attracting and retaining key talent. 83% of younger employees track a company’s commitment to fairness, and 70% would switch jobs to work for a more equitable employer.

Second, diverse leadership correlates with Better risk management, Higher profit margins, Stronger Return on Equity, and Better stock performance.

These are objectives all stockholders agree on. Several countries – including the UK, Ireland, and soon the entire European Union – require companies to disclose median pay gaps publicly.  Why?  Because these disclosures move companies in the right direction. “Fairness” – benefits stockholders, employees, and the company. Vote FOR.

Kellanova 2024: Item #7

Shareowner Proposal to Report on the Risks to the Company Associated with Pesticide Use in its Supply Chain

This Proposal seeks a report on the risks associated with pesticide use in its supply chain. Pesticide use can result in huge losses, including our loss of saluberous environment. The proponents set out just a few in their proposal. Vote FOR.

Kellanova 2024: Item #8 Shareowner Proposal to Reduce Company Greenwashing Risk

This Proposal requests a report analyzing the risks arising from voluntary carbon-reduction commitments. The National Center For Public Policy Research doesn’t believe in the science behind global climate change, but I do. Don’t ask Kellanova to waste resources. Vote Against.

Kellanova 2025: Mark Your Calendar

Shareowner proposals submitted for inclusion in our Proxy Statement for the 2025 Annual Meeting of Shareowners must be received by us no later than November 4, 2024. Other Shareowner proposals or Director nominations to be submitted from the floor must be received by us not earlier than November 4, 2024 and not later than December 4, 2024, and must meet certain other requirements specified in our Bylaws

   

Kellanova 2024: Related Posts

Kellogg 2023 Pay Equity Disclosure

Pay Equity Disclosure 2023 Hot Topic

Kellogg 2022 Proxy Recommendations

 

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