Declassify Lululemon, plus anti-ESG losses and big dumb payouts

Lead independent directors continue to be CEOs-in-trainingLachlan Murdoch give himself more money but promises he had nothing to do with itInvestors hate ONE company’s payExxon hearts Texas and loathes ESGAnd on the Big Vote, Matt puts on some LuluLemon<TRADE WIRE BUMPER>Trade WireTop Stories: 130 Filings since May 28thThe headlinesLead Independent Directors are KingTYSON FOODS: lead independent director Jeffrey K. Schomburger will become CEO, replacing Donnie King, who will remain on the board$2.8M golden hello equityStandardAero: appointed Lead Independent Director Paul McElhinney to CEO/Chair, succeeding CEO/Chair Russell FordRussell Ford will continue as Exec Chair until 1/1/2027$20M golden helloCLOROX: CEO/Chair Linda Rendle to step down for health reasons, succession startedDEERE & CO: overboarded chronic DEI flipper Dmitri Stockton to step down in 2027MICROSOFT: Epstein Files bro Reid Hoffman stepping downDown to 2FGLADSTONE INVESTMENT: elected George “Chip” Stelljes, IIIImmediately named to 3 committees: Compensation Committee, Nominating and ValuationOnly one woman serves on any board committee: Katharine C. GorkaOh wait, she’s the only womanStupid moneyFox Corp: increased CEO/Chair Lachlan K. Murdoch's target annual bonus to $9,000,000 and target annual equity award to $20,000,000If the maximum stays: annual from $12M to $18M and equity from $22M to $40MSo a possible increase of $24M“Mr. Murdoch recused himself from all discussions and votes regarding his employment term extension and compensation adjustments”CFOsCencora: $8M golden hello: $2M cashTrade Desk: $10m golden helloUL Solutions: special, one-time $20M equity grant to CEO Jennifer F. ScanlonTRUIST FINANCIAL: CEO/Chair William H. Rogers, Jr. will transition to Exec Chair; Michael P. Lyons will be new CEOnew CEO Michael P. Lyons will join board: golden hello $37.5M equity and $2.7M cashMarvell Technology: director Daniel Durn resigned to become CFO: golden hello ~41$M: $1M cashDumb stuffC. H. ROBINSON WORLDWIDE: special equity award for Arun Rajan, the Company’s Chief Strategy and Innovation Officer of $7.5M equity“designed to drive strategic and talent development outcomes” MICROCHIP TECHNOLOGY: appointed former exec Mitch Little as directorauthored two books, Shiftability: Creating a Sustainable Competitive Advantage in Selling and CUSP: Leading by Serving, When Outcomes Matter MostFirst one is self-published through AmazonSecond one is a .pdf and not published (48 pages)Space Exploration Technologies Corp: elected MuskBro Roelof Botha as an “independent Common Stock DirectorSmart-ish StuffCME GROUP: Chair/ CEO Terrence A. Duffy will become Exec ChairCFO Lynne C. Fitzpatrick will become CEO/director ‍ ‍<PROXY CAGE MATCH BUMPER>PROXY CAGE MATCHMeh, nothing spectacular <VOTE RESULTS BUMPER>VOTE RESULTS TABLE Since May 28th145 meetings at large market caps77 total SHPs from 33 companies:Top storyWarner Bros. Discoverypay 84% noSustainability ROI Report 3% yesJoseph M. Levin 22% no; Geoffrey Y. Yang 31% no; Kenneth W. Lowe 31% no; Richard W. Fisher 31% no; Debra L. Lee 32% no; Anthony J. Noto 41% no; Paul A. Gould 52% noEXXON MOBILTexas Redomiciliation 71% yesVoyager Technologies: Texas 92% yesCondescending SHPsIndependent Chair, a proposal overwhelmingly defeated on 16 separate occasions since 2000 15% yes;requesting Company to modify its Voluntary Retail Voting Program to provide multiple options not aligned with the Board’s recommendations 24% yesTARGET CORPindependent board chair 39% yesBrian Cornell 13% noSHPs: presence of pesticides in Target’s private label brands 18% yes; reducing plastic microfiber shedding 20% yes x VictoriesHUBSPOT: Special Shareholder Meeting Improvement 79% yesFIVE BELOW: simple majority vote standard 90% yesEl Pollo Loco Holdings: majority voting standard 71% yesAlmostOtis Worldwide: political contributions and expenditures 45% yesDOLLAR GENERAL: Reduce Special Meeting Ownership 42% yesNETFLIX: Act by Written Consent 44% yesDatadog: simple majority voting 42% yesHateDICK'S SPORTING GOODS: Women's Rights Related Business Risk and Decision Framework 0.06% yesAirbnb: Risks Relating to Digital Services 0.06% yes; Discrimination in Charitable Support 0.04% yes;Risks of Politicized Divestments 0.09% yesMost:Meta Platforms (10)Report on AI Data Usage Oversight 10% yes; Annual Vote Regarding Executive Pay 27% yes; Dual Class Capital Structure 26% yes; Disclosure of Voting Results By Share Class 20% yes; Human Rights Due Diligence 4% yes; Addressing Antisemitism and Hate 7% yes; Climate Change-Related Commitments 7% yes; Integrating Child Safety into Exec Comp 3% yes'; Data Protection Impact Assessment on Gen AI 7% yes; Risks of H-1B Visa Program Use less than 1% yesAlphabet (10)Climate Goals Disclosure 7% yes; Water Usage & AI Report 1% yes; Equal Shareholder Voting 31% yes; Viewpoint Diversity Risk 0.16% yes; Politicized Content Moderation 0.2% yes; Immigration Policy Impact 2% yes; Data Privacy Report 6% yes; AI Board Oversight 4% yes; AI Misinformation Report 9% yes; AI Data Usage Oversight 12% yesOtherNo ESG-related shareholder proposals pass in 2026 proxy seasonESG and Anti-ESG Shareholder Proposals in 2026“Considerations regarding what constitutes ESG proposals are necessarily subjective. In our analysis, we include proposals with clearly social goals, including proposals related to DEI or freedom of speech, or climate related goals, among others. We exclude proposals with a governance focus, such as those requesting an independent board chair or rights to call a special meeting, among others.   Say on PayFidelity National Information Services: pay 30% no98% avg yesApollo Global Management: pay 29% no99% avg yes Ulta Beauty: pay 22% no98% avg yes PROCORE TECHNOLOGIES: pay 37% noclassified: Nanci E. Caldwell 32% no COMCAST: pay 42% noKenneth J. Bacon 20% no; Thomas J. Baltimore, Jr. 22% noIndependent chair 26% yes Arista Networks: pay 40% noclassified: Greg Lavender 21% no; Lewis Chew 22% no; Mark B. Templeton 37% noDirectorsTKO Group Holdings: The Rock 20% noMATTEL INC: 25% no: Adriana Cisneros, Diana Ferguson, Prof. Noreena Hertz, Soren Laursen, Roger Lynch, Dominic Ng, Dr. Judy OlianClassifiedArista Networks: Greg Lavender 21% no; Lewis Chew 22% no; Mark B. Templeton 37% noDOCUSIGN: Allan Thygese 22% no; Cain Hayes 27% no; James Beer 28% noFUEL TECH: Douglas G. Bailey 23% noAstera Labs: Michael Hurlston 32% noRocket Companies: Matthew Rizik 21% noFidelity National Financial: William P. Foley II 22% noZoom Communications: Lieut. Gen. H.R. McMaster 23% noREGENERON PHARMACEUTICALS: Craig B. Thompson, M.D. 21% no; Christine A. Poon 23% no; Joseph L. Goldstein, M.D. 30% noOther stuffCME GROUPIn the election of one Class B-3 Director, no quorum was achieved. Therefore, Elizabeth A. Cook is a “holdover” under Delaware law and the Company’s bylaws. She will continue to serve until her successor is duly elected at the 2027 Annual Meeting or her earlier resignation. "The Big Picture: Corporate management tried to eliminate the special rights of Class B shareholders to elect their own board directors. The shareholders successfully blocked this change—either by actively voting ""No"" or by simply not showing up to vote.1. The Corporate Governance Proposals (Items 4 - 7): Management needed specific majorities to strip away these Class B voting rights, and they failed across the board: Item 4 (Eliminate Class B-1 Director Rights): FAILED. Management wanted to stop B-1 shareholders from electing three directors. It needed a majority of all outstanding B-1 shares to agree, but only 27.84% voted yes. Item 5 (Eliminate Class B-2 Director Rights): FAILED. Management wanted to stop B-2 shareholders from electing two directors. Only 23.37% of B-2 shares voted yes. Item 6 (Eliminate Class B-3 Director Rights): NO VOTE. Only 28.44% of Class B-3 shareholders showed up (the minimum needed to hold a vote was 33.3%). Because they lacked this ""quorum,"" the proposal was thrown out without a vote. Item 7 (The Certificate Amendment): PASSED BUT VOID. While the general pool of shareholders voted ""Yes"" to a corporate amendment, it was legally contingent on Items 4, 5, and 6 passing. Because those failed, this amendment is dead in the water and will not be filed.2. The Board Elections (Item 8)Because management failed to alter the rules, the traditional Class B board elections took place with the following results: Class B-1: William H. Hobert, Patrick J. Mulchrone, and Robert J. Tierney Jr. were all successfully re-elected to the board until 2027. Class B-2: Patrick W. Maloney was successfully re-elected to the board until 2027. Class B-3: No election occurred. Because Class B-3 shareholders didn't hit their 33.3% attendance turnout, they couldn't vote on a director. By default legal rules, the current incumbent, Elizabeth A. Cook, automatically keeps her seat as a “holdover” director until 2027."KKR & Co: special: eliminate the supermajority voting requirement: failed: 98% yes but less than 90% of outstanding shares present (86.6%)Upcoming Annual Shareholder Meetings: June 22-23 2026Tuesday, June 23CoStar Group, Inc. (CSGP) Real Estate Data / ~$30B+Core & Main, Inc. (CNM) Industrial/Waterworks / ~$10B+Two Harbors Investment Corp. (TWO)Mortgage REIT / ~$1B+Wednesday, June 24NVIDIA Corporation (NVDA) Semiconductor & AI / ~$3T+Synchrony Financial (SYF) Consumer Finance / ~$15B+F&G Annuities & Life, Inc. (FG) Insurance / ~$5B+Thursday, June 25Lululemon Athletica Inc. (LULU) Apparel / ~$40B+The Kroger Co. (KR) Grocery Retail / ~$35B+UiPath, Inc. (PATH) AI & Automation Software / ~$7B+Blue Owl Capital Corp. (OBDC) Asset Management / ~$7B+Box, Inc. (BOX) Cloud Content Management / ~$4B+ Terex Corporation (TEX) Heavy Machinery / ~$3B+Dell Technologies Inc. (DELL) Tech Hardware & AI / ~$100B+Marvell Technology, Inc. (MRVL) Semiconductors / ~$50B+SentinelOne, Inc. (S) Cybersecurity / ~$7B+HealthEquity, Inc. (HQY) Fintech & Health Savings / ~$7B+Friday, June 26Aon plc (AON) Financial Services & Insurance / ~$60B+The AES Corporation (AES) Utility & Power / ~$11B+United Therapeutics Corp. (UTHR) Biotechnology / ~$10B+Select Medical Holdings (SEM) Healthcare Facilities / ~$4B+Blackstone Mortgage Trust (BXMT) Real Estate Finance / ~$3B+<THE BIG VOTE BUMPER>THE BIG VOTEMattLululemon and how Chip Wilson’s Campaign proves board entrenchment mechanisms need to be dissolved - but investors seem to be confused about those mechanisms:Wilson began an activist campaign against LULU after he didn’t get board seats he wanted, saying: “It is clear to the world that lululemon is special, but in need of change. As I have stated for years, lululemon needs visionary creative leadership to thrive. The simple truth is that the current Board lacks these skills and, as a result, lululemon is unable to win back the confidence of its critical stakeholders and regain commercial momentum. The nominees I put forward today are the change that is needed to redefine lululemon and begin this company’s next chapter of success”He was on a disparagement rampage since late last year:Lululemon's founder is blasting the company for selling sheer leggings, calling it a 'new low'Lululemon founder Chip Wilson blames board for 'total operational failure' in Get Low launch“In 2013, Lululemon recalled 17% of all its pants for being too sheer. At that point, the company blamed the manufacturing error on an incomplete testing protocol”Wilson owned 29.22% of the stock at the timeLululemon founder Chip Wilson launches proxy fight for board shakeupWilson has nominated three independent director candidates to be elected at the 2026 annual meeting and submitted a proposal to "declassify" the board so that all members must stand for election annuallyLululemon is settling its boardroom battle with founder Chip Wilson. Under the terms of the agreement, Lululemon willappoint two of Wilson’s board nominees — former On co-CEO Marc Maurer and former ESPN Chief Marketing Officer Laura Gentiletake all necessary steps to appoint an additional new independent director with apparel product and brand expertise to the Board by October 1, 2026one additional incumbent director will not stand for reelection at the Company’s 2027 annual meeting;the Company will recommend that stockholders vote in favor of Mr. Wilson’s proposal to declassify the Board at the 2026 Annual Meetingand, if such proposal is approved by stockholders, the Company will submit for stockholder approval at the 2027 Annual Meeting a proposal to amend the Company’s Restated Certificate of Incorporation to fully declassify the structure of the Board and provide for the annual election of directors, effective as of the Company’s 2028 annual meetingWilson in exchange will:agree to not bad-mouth the company for around 18 monthsvote in accordance with the Board’s recommendations with respect to all proposals submitted to stockholders at each such Stockholder MeetingBut in 2026 so far…14 shareholder proposals were filed in an effort to remove board entrenchment mechanismsChevedden filed 7 of the 14Includes simple majority, director majority voting, proxy access, and one declassification at ZScalerAverage vote for in 2026: 22%Only SBUX simple majority SHP got >50% at 72% in favorAt LULU, Chip Wilson actually classified and hand picked most of the board he went activist against:SAME BOARD MEMBERS THAT CHIP WILSON PICKED:Martha Morfitt (2008)David Mussafer (2014)Michael Casey (2007)Emily White (2011)40% of the board IS CHIP WILSON’S HAND PICKED PEOPLENow he demands declassification Overall, are classified boards that bad??More insiders: 25% insiders on average vs. 21% for non classifiedMore consolidated influence: 41% max influence average vs. 33%More knowledge: 43% of directors on classified boards have core industry knowledge vs. 41% on non classifiedLower tenure: Average classified tenure is 7.4 years vs. 7.9 years on non classifiedLess connected: 37% vs. 46% averageRoughly the same performance: .509 vs. .496The LULU vote trade:The classified vote at LULU is effectively a Wilson vote:At this point, LULU has committed to Wilson candidates AFTER the AGM (no votes on them FOR THREE YEARS as class I directors added using board size increase and post AGM agreement). The company agreed to add ANOTHER director in October for Wilson, and at least one director is resigning. Wilson has committed to not yell at the company for about 12 minutes (18 months), and gets full say over directorships. The Board shall recommend that stockholders vote and shall solicit proxies, in favor of Wilson’s proposal regarding declassification of the Board, submitted in the notice dated December 29, 2025 (the “Declassification Proposal”) at the 2026 Annual Meeting in a manner no less rigorous and favorable than the manner in which the Company supports its other proposals at the 2026 Annual Meeting, and the Company shall use its best efforts to have all directors and executive officers of the Company vote all shares beneficially owned by them and over which they have voting control in favor of the Declassification Proposal. If the Declassification Proposal is approved by the stockholders at the 2026 Annual Meeting, then the Company shall take all necessary actions to submit for stockholder approval at the 2027 Annual Meeting a binding proposal to approve an amendment to the Company’s Restated Certificate of Incorporation (the “Charter”) to fully declassify the Board and provide for the annual election of directors, effective as of the Company’s 2028 annual meeting of stockholders (including any other meeting of stockholders held in lieu thereof, and adjournments, postponements, reschedulings or continuations thereof, the “2028 Annual Meeting”).Declassify:You can REMOVE Wilson candidates at next AGM, they serve only 24 monthsInsider power will diminish, as Wilson candidates are effectively representatives of Wilson himself (and in our influence numbers are considered activist placed and high influence)Wilson’s choices did NOT improve the core knowledge - so you don’t get that benefit:“The nominees appear to be fine, although only one of the three (Maurer) has direct experience in Lululemon’s industry,” Morningstar analyst David Swartz said.”David Musaffer stepped down, as well, didn’t have core knowledge - so knowledge didn’t substantially changeTenure will stay lower, but less connected to each OTHER (but increase connection to Wilson)LEAVE classifiedWilson actually GAINS CONTROL in a classified board system - his directors stay for 3 years without accountability (except maybe to him)That’s the Proxy Countdown for the week of June 15, 2026. Join us next week when we jump back into the Alternative Democracy pool... forever on the lookout for shareholder shenanigans, dopey directors, scandalous CEO pay ratios, and wayward BandAids