Teleflex Inc. | Simple majority vote

Status
95.30% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
TBH
Lead filer
Undisclosed filer
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 the necessary steps 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 eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. 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 elimination.
Supporting statement
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 initiatives 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.

We currently have 80% and 90% supermajority voting requirements. This is absurd because with a 90% approval requirement, 108% of the shares that vote at our annual meeting need to approve an item.

Adoption of this proposal will facilitate adoption of the 2021 shareholder proposal for one-year terms for Teleflex directors. The 2021 proposal was approved by a remarkable 96% of Teleflex shares.

One-years terms for directors could give directors more of an incentive to improve their performance. For example, Mr. Stuart Randle, who chairs the Governance Committee, was rejected by up to 17-times the negative votes of other Teleflex directors at our 2021 annual meeting. Under the current system Mr. Randle has no worries about his performance until 2024.

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