SEC pushes voting against directors, plus Novo Nordisk and executive shifts at Walmart

What this episode covers

Trade Wire - BUY/SELL Top Stories: proxy countdown_trade wire_2025 - Google Sheets Walmart Inc. (WMT) C. Douglas McMillon resigning; John R. Furner replacing C. Douglas McMillon resigning at 2026 AGM; John R. Furner elected Doug McMillon will retire as CEO effective January 31, 2026. John Furner will formally become President & CEO on February 1, 2026. John started as a part-time associate in 1993, has led merchandising, operations, sourcing, and was previously CEO of Sam’s Club. Since 2019, he’s been President & CEO of Walmart U.S., overseeing Walmart’s U.S. operations John is being added to Walmart’s Board of Directors immediately. Doug will remain on the board through Walmart’s next annual shareholders meeting (June 2026). He’ll also serve as an advisor to John through the end of fiscal year 2027. He’ll earn a base of $1.5M/year, and his restricted/performance stock awards will continue vesting through Jan 31, 2027 if he remains employed. His non-compete obligations are extended through January 31, 2029, per the new agreement. Tracking Noteworthy 8-Ks since October 8th: DIrector comings and goings: Men added: Men subtracted: Women added: Women subtracted: Stick to 2F Down to 2F: Down to 1F: Stupidities/Oddities: OpenAI says Larry Summers has decided to resign from board of directors Larry Summers announced he is resigning from OpenAI’s board of directors. OpenAI’s board publicly said they “respect his decision” and thanked him for his service. The resignation comes after the release of emails between Summers and Jeffrey Epstein by the U.S. House Oversight Committee. In those emails, Summers corresponded in a friendly way with Epstein—even seeking personal / romantic advice. Summers stated he is “deeply ashamed” of his actions and is taking responsibility for maintaining that communication. Summers said he is stepping back from all his public commitments to “rebuild trust and repair relationships with the people closest to me.” He’s also going on leave from Harvard, where he had been teaching. Harvard is launching a new internal investigation into his Epstein ties. AMERICAN INTERNATIONAL GROUP, INC. (AIG): President John Neal will no longer be joining company John Neal, former CEO of Lloyd’s of London, was set to join AIG as its President (effectively a No. 2 role). His compensation package was reportedly very large — the WSJ says up to $17 million in his first year. The controversy centers on Neal’s past at Lloyd’s: allegedly he had an inappropriate workplace relationship with Rebekah Clement, a former director of corporate affairs at Lloyd’s. There were also concerns raised at Lloyd’s about preferential treatment: Clement was promoted into a role that reported directly to Neal, and there were complaints from employees. Additionally, Neal’s daughter was employed at Lloyd’s in a communications role, which raised further governance questions. Lloyd’s of London has reopened an investigation into Neal’s conduct. AIG terminated (or “mutually agreed to end”) Neal’s appointment, citing “personal circumstances” in a filing. “American International Group, Inc. (NYSE: AIG) today communicated that it has reached a mutual agreement with John Neal, who had been named to the position of President effective December 1, 2025, that he will no longer be joining the Company due to personal circumstances. AIG Chairman & CEO Peter Zaffino will continue to work with the Board on the future organizational structure of the Company to drive performance on behalf of its clients, partners, and stakeholders.” The decision came fairly late — Neal was set to start December 1, 2025, before the reversal. It appears AIG learned of the reopened Lloyd’s investigation only recently, which seems to have prompted them to pull back. This isn’t the first time Neal has faced scrutiny for workplace relationships: when he was CEO of QBE Insurance, his bonus was cut because he failed to disclose a romantic relationship with an assistant. NEOs CEOs Money TRACTOR SUPPLY: retention equity awards of $20M to CEO Harry A. Lawton III Rivian Automotive: 36.5M stock option grant /$4.6B CEO stock award to CEO RJ Scaringe PROCORE TECHNOLOGIES, INC. (PCOR) appointed Dr. Ajei S. Gopal as CEO founder and former CEO Craig Courtemanche, Jr. remains as Chair $3M equity and $500k cash to former CEO "to recognize the extraordinary amount of time, energy, and effort that Mr. Courtemanche dedicated to identifying, evaluating, and meeting with multiple potential CEO candidates, and ultimately successfully recruiting and onboarding Dr. Gopal, all while continuing to lead the Company as its President and CEO" EMERSON ELECTRIC CO (EMR): Karsanbhai and COO Ram Krishnan: potential value of $38M each PROXY CAGE MATCH Novo Nordisk faces a shareholder backlash as the Danish drugmaker's minority investors prepare a protest vote against a board shake-up forced through by its dominant shareholder, the Novo Nordisk Foundation. The Novo Nordisk Foundation, holding 77% of voting rights but just 28% of share capital, used its dominance to push through a major board overhaul at an extraordinary shareholder meeting.​ Foundation chairman Lars Rebien Sørensen was installed as Novo Nordisk’s new board chair—a dual role that raised governance concerns among minority investors due to its unprecedented consolidation of power.​​ Sørensen indicated he intends to serve for only 2–3 years and pledged to return to an “arm’s length” oversight model once a successor is named.​ Sørensen plans to prioritize appointing board members with recent pharmaceutical and over-the-counter (OTC) experience, reflecting the company's pivot to direct-to-consumer models.​ The shake-up followed the abrupt resignation of former chair Helge Lund and six independent directors, who stepped down after disputes with the Foundation over the pace and scope of board renewal.​ The Foundation argued that a comprehensive and rapid board refresh was necessary to stabilize the company and support long-term growth, while the former board favored a slower, incremental approach.​ Despite opposition, the new board slate received over 90% of the vote, though many minority shareholders either opposed or abstained as a protest.​ Major shareholders are reacting differently: Norway’s sovereign wealth fund plans to abstain, while CalSTRS (California State Teachers’ Retirement System) will oppose the proposed board candidates. Proxy advisor ISS (Institutional Shareholder Services) recommended abstaining, citing concerns over the unilateral and opaque nature of the Foundation’s board overhaul. Novo recently appointed Mike Doustdar as CEO, in a fast-tracked process pushed by the Foundation, which was frustrated by what it saw as a passive board. VOTE RESULTS TABLE Tesla: Vote results: [actual vote result % support] / [vote result % support with insiders backed out]... thanks to Mr. CorpGov Proposal 1: Director elections Ira Ehrenpreis: 64.6% / 49.9% Joe Gebbia: 86.7% / 81.2% Kathleen Wilson-Thompson: 77.9% / 68.8% Proposal 2: Say-on-Pay 78.2% / 69.2% Proposal 3: A&R 2019 Equity Incentive Plan 78.7% / 69.8% Proposal 4: 2025 CEO Performance Award 76.7% / 66.9% Proposal 5: auditor ratification 97% / 96% Proposal 6: eliminate supermajority voting requirements (management proposal; however, no board rec) 53.5% Hypothetically, if inside owners had cast their votes AGAINST this proposal, and we were to back those shares out from the AGAINST vote tabulation, the proposal would have received 76% support, thus meeting the supermajority threshold to pass. Shareholder proposals: Proposal 7: Board authorization XAI investment: 43.3% Hypothetically, if inside owners had cast their votes FOR this proposal, and we were to back those shares out from the FOR vote tabulation, the proposal would have received 19.4% support. Proposal 8: Integrating sustainability metrics into senior executive compensation plans: 8.8% / 12.4% Proposal 9: Child labor audit: 7.6% / 10.8% Proposal 10**: Amend bylaws to repeal 3% derivative suit ownership threshold: 24.8% / 35% Proposal 11**: Amend Article X of the bylaws: 15.3% / 21.7% Proposal 12: Annual Director elections: 53.8% / 76% Proposal 13: Eliminate supermajority vote provision: 31.9% / 45% Proposal 14: Shareholder approval requirement prior to adopting an amendment to the bylaws: 48.8% / 69% Other than Tesla: 15 votes, 6 SHPs 3 call special meeting Texas Pacific Land Corp (TPL): call special meeting 15% yes JACK HENRY & ASSOCIATES INC (JKHY): call special meeting 49% yes LAM RESEARCH: Realistic Shareholder Ability to Call for a Special Shareholder Meeting 41% YES Separation of CEO/Chair: 34% YES Sysco Fox Corp (FOX, FOXA): simple majority vote 38% YES; improve compensation program 4% YES Directors: Tesla: Ira Ehrenpreis: 64.6% / 49.9% Joe Gebbia: 86.7% / 81.2% Kathleen Wilson-Thompson: 77.9% / 68.8% LAM RESEARCH CORP (LRCX): 19% NO Nominating Committee Chair Michael R. Cannon 11% NO Chair Abhijit Y. Talwalkar Fox Corp (FOX, FOXA): Lachlan K. Murdoch: 17% NO William A. Burck: 17% NO Chase Carey: 18% NO Margaret “Peggy” L. Johnson: 15% NO Paul D. Ryan: 24% NO NEWS CORP (NWS, NWSA): Lachlan K. Murdoch 10% NO José María Aznar 20% NO Natalie Bancroft 16% NO Masroor Siddiqui 12% NO The other 12: 96% yes avg 97% yes avg avg 99% yes avg 98% yes avg 98% yes avg 95% yes avg 96% yes avg 97% yes avg 99% yes avg 98% yes avg 97% yes 98% average YES THE BIG VOTE PICKS DAMION Upcoming Meetings November 10- AGM Date Company SHPs # Notes Matt SEC no-action ruling SEC blamed the “government shutdown” and “guidance” to issue the following: “the Division has determined to not respond to no-action requests for, and express no views on, companies’ intended reliance on any basis for exclusion of shareholder proposals under Rule 14a-8” The only exception is when the proposal contravenes state law The coverage has been breathless: The change “has the potential to end shareholder proposals as we know them,” a former SEC corporation finance division director told ESG Dive. Shareholder advocates push back against SEC’s move on no-action requests US outlines new approach for proxy disputes, seen as blow to shareholder activists No word from the anti-woke what they think, but clearly we’ll find out a few things: Which companies will allow proposals EVEN THOUGH the SEC would allow an exclusion by no-action? Which companies will allow ONLY certain PROPONENTS - will they signal pre-existing relationships? Which companies will flat out reject ALL SHPs? But mostly, we’ll start asking some REAL QUESTIONS about boards - since it’s all we can vote on! 2024 proxy voting… Votes Cast: 73% of all votes were directors 25% were management proposals (auditors, pay) 3% were shareholder proposals Proponent type average vote share rates: Activists: 23% (does NOT include director votes, just bylaws and proposals) Antis: 2.2% AOs / Pensions: 11.9% Pros: 10% Governance: 29% Religious: 10.3% Proponent actual wins: Governance: 18% WIN RATE EVERYONE ELSE: 0% WIN RATE So here’s what the no-action rule actually stopped: Governance gadflies improving governance practices Special meetings Board declassification Majority voting Dual class share retirement Jim McRitchie, John Chevedden - they serve a pretty vital function in shareholder democracy, primarily by keeping it a democracy Even if the votes were non binding, the market signal was strong given how often they WON - they won over even the Blackrock/State Street/Vanguard votes Engagement teams Between the SEC’s earlier bulletin declaring that most forms of questions to boards could be considered “activist” and require activist filings vs. regular investor filings and this ruling, engagement teams might actually see mass layoffs Proxy voting will be more algorithmic - and need more data Here’s what it didn’t: Most of those votes were non binding (precatory) Importantly, everyone NOT named Jim or John lost - almost every time You could make the argument that we have more robust disclosures now as a result of 25+ years of precatory proposals and board engagements, which may not be wrong - but also the process was a quarter century in the making, and at this point there IS no headway What’s next: Vote. On. Directors. 73% of ALL VOTING Average approval rate of 96% and election rate of 99.8%, but universal anecdotal evidence that 0% of investors think 99.8% of directors should definitely have jobs SHP Hall of Fame Jing Zhao Intuitive Surgical, 2024: Resolved: stockholders recommend that Intuitive Surgical, Inc. (our Company) improve the executive compensation program to include the CEO pay ratio factor. And at Bank of America, Resolved: shareholders recommend that Bank of America Corporation (the Company) reform the election of the board to list more candidates than the number of directors of the board to be elected. “The American corporate boards and executives have become a class of oligarchy, as defined by Aristotle, according to his _Politics_. In this great classic, Aristotle demonstrated that in a stable community (polis), the ratio of the richest citizen’s land to the poorest citizen’s land should not be over 5 to 1.” “One of the main problems of corporate governance is that American corporate boards are not democratically elected. The Company’s board needs a democratic reform to elect members from more diversified candidates. Shareholders should have the right to choose from more candidates than the number of directors of the board to be elected.” NCPPR, Coca-Cola, 2025 Shareholders request that the Board of Directors create a board-level Improper Influence Committee to assess the extent to which the Company’s decision-making has been improperly influenced, contrary to best practices, by the nonpecuniary policy preferences of directors, executives, or money managers with their own custodial obligations. General Pension Plan of the International Union of Operating Engineers, Enron, 1997 That the shareholders of ENRON CORP. (the "Company") recommend that our Board of Directors take the necessary steps to adopt and implement a policy of cumulative voting for all elections of directors. Supporting statement: In the American corporate governance system, the election of corporate directors is the primary vehicle for shareholders to influence corporate affairs and exert accountability on management. We believe that the Company's financial performance is affected by its corporate governance policies and procedures and the level of accountability they impose. We believe cumulative voting increases the possibility of electing independent-minded directors that will enforce management's accountability to shareholders. Bart Naylor, Exxon, 2001 "RESOLVED: The shareholders urge our board of directors to take the necessary steps to nominate at least two candidates for each open board position, and that the names, biographical sketches, SEC-required declarations and photographs of such candidates shall appear in the company's proxy materials (or other required disclosures) to the same extent that such information is required by law and is our company's current practice with the single candidates it now proposes for each position." New Director Future Merit Votes Leadership, Knowledge of industry, economic interest, powerful friends, performance - any three 41% of US directors get tagged as “merit candidates” 62% have core knowledge of the industries where they sit on the board ONLY 17% MEET BASIC PERFORMANCE CRITERIA Rank in the top 50% of directors on earnings, TSR, AND controversies - basically they are above average on the most basic metrics (company makes money, stock makes money, companies aren’t assholes) Merit candidates average 9% influence - non merit candidates average 12% influence The people making decisions on average have worse/less qualified backgrounds 46% of women in board seats were tagged as merit candidates compared to 39% of men Women are held to a higher standard to get the board seat Men with merit average 9.5% influence, women with merit average 8% Even held to a higher standard, women are given less power on boards despite having more merit Pure performance Out of 6,146 US directors with at least 3 boards in their history that are currently active (out of ~20k), ONLY 627 (10%) HAVE OVERSEEN GREATER THAN AVERAGE TSR This is the most basic ask of investors - produce market returns - and only 10% of directors with experience on multiple boards have actually done that If you care about carbon, 2,332 (38%) of US directors outperform on carbon intensity - which means roughly 60% of directors should be in play to be voted out About 17% of US companies have set a science based carbon target At 32 companies, at least 25% of the board is among the bottom performers for carbon despite having set a science based target At two companies (Hilton and AT&T), despite having a science based target, more than half the directors our among the bottom performers on carbon Is there some expectation that people who have failed to deliver on carbon will hit carbon targets? That’s the Proxy Countdown for the week of November 17, 2025. 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