Rite Aid | Adopt simple majority vote

Status
65.50% votes in favour
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
RAD
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against such proposals, or a simple majority in compliance with applicable laws.
Supporting statement
Kenneth Steiner, who owns at least 250 shares of common stock (based on information provided to us by Mr. Steiner) and whose address will be provided by the Company promptly upon oral or written request, has notified us that he intends to present the following proposal at the Annual Meeting. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. This includes any existing supermajority vote requirement that result from default to state law and can be subject to replacement.
Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block proposals supported by most shareholders but opposed by a status quo management.
This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. The proponents of these proposals included Ray T. Chevedden and William Steiner. The votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice.
Church & Dwight shareholders gave 99% support to a 2020 proposal on this same topic. This proposal topic also won 99%-support at the 2021 ConocoPhillips annual meeting.
Most major companies started to remove their supermajority voting barriers 20 years ago. Rite Aid is thus 20 year behind in corporate governance.
It is a particular disadvantage to the shareholders of Rite Aid to have the current super majority voting requirements because a large percentage of shareholders do not have the time to vote. This means that proposals to improve Rite Aid corporate governance are knocked out by the one-two punch of requiring supermajority votes like 75% from all shares outstanding and then a large percentage of Rite Aid shareholders do not have the time to vote.

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