The Kraft Heinz Company | Simple Majority vote at The Kraft Heinz Company

Status
19.06% votes in favour
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
KHC
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
Consumer Staples
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 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.
Supporting statement
John Chevedden, on behalf of Kenneth Steiner, 14 Stoner Avenue, 2M, Great Neck, NY 11021, the owner of at least 250 shares of Kraft Heinz stock, has submitted and intends to present the following proposal for consideration at the Annual Meeting. 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 shareowners 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. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 99%-support at the 2019 Fortive annual meeting. Currently a 1%-minority can frustrate the will of our 66%-shareholder majority in an election with 67% of shares casting ballots. In other words a 1%-minority could have the power to prevent shareholders from improving the governance of our company. Adoption of this proposal will make Kraft Heinz more competitive in its corporate governance. The timing is right because our stock has dropped from $92 in 2017.
Hopefully management will not revert to holding the annual shareholder meeting in the law office of Reed Smith, a $1 Billion law firm, as management did before Covid. This sends the wrong message to shareholders. This proposal was voted on at the 2020 Kraft Heinz annual shareholder meeting. It is believed that it received overwhelming shareholder approval. However due to a technicality the Kraft Heinz Board did not report the 2020 voting result. The Kraft Heinz Board was so opposed to letting this proposal be voted on again in 2021 that it hired the $2 Billion law firm of Gibson Dunn for a 5-figure price to prevent Kraft Heinz shareholders from voting on this important proposal. In response to this 2023 proposal and to advance the discussion on this important topic the Board could belatedly report the result of our 2020 vote on this proposal topic. The Kraft Heinz Board had the reasonable option (and thereby make up for its past resistance to this reasonable proposal) of making this proposal a management proposal on the Kraft Heinz 2023 annual meeting ballot.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr Against A vote AGAINST this proposal is warranted as lower approval requirements could further enhance the voting power of the company's significant shareholders, potentially to the detriment of unaffiliated shareholders.

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