MERCK & CO., INC. | Independent chairman at MERCK & CO., INC.

Status
32.43% votes in favour
AGM date
Previous AGM date
Proposal number
10
Resolution details
Company ticker
MRK
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.
Whereas clause
Whenever possible, the Chairman of the Board shall be an Independent Director.

The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an accelerated basis.

It is a best practice to adopt this policy soon. However this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.
Supporting statement
Kenneth Steiner, of Great Neck, NY, owner of at least $2,000 in market value of the Company’s common stock, has given notice that he intends to present for action at the Annual Meeting the following proposal:

Supporting Statement:
The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and Merck. The job of the CEO is to manage the company. The job of the Chairman is to oversee the CEO and management.

A Lead Director is no substitute for an independent Board Chairman. A lead director is not responsible for the strategic direction of the company. And a Chairman/CEO can ignore the advice and feedback from a lead director.

Plus there are weaknesses in the role of Merck lead director:



•
Can only approve meeting agendas and the information sent to the Board, but apparently no role in the development of meeting agendas and information.



•
Can only approve meeting schedules, but apparently no role in the development of meeting schedules, plus the scope of the approval is only to make sure there is enough time.

At its 2020 annual meeting Lowe’s (LOW) directors said that having a separate Chairman and Chief Executive Officer affords allows the Chairman to devote his time and attention to Board oversight.

The Merck board needs attention. Ms. Patricia Russo received 228 million against votes in 2021 and 250 million against votes in 2022. These 2 against votes were up to 38-times the against votes received by other Merck directors. Ms. Russo was also the leader in against votes at Merck in 2020. Ms. Russo also received the most against votes at General Motors where she is also a director.

Mr. Thomas Glocer, Lead Director, violates the most important attribute of a Lead Director -independence. As director tenure goes up director independence goes down. Mr. Glocer has 16-years director tenure at Merck. 16-years director tenure means that the skills Mr. Glocer had 16-years ago and his intervening skills may no longer be relevant to Merck.

Plus management fails to give shareholders enough information on this topic to make a more informed decision. There is no management comparison of the exclusive powers of the Office of the Chairman and the de minimis exclusive powers of the Lead Director.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Kutxabank Gestion SGIIC SAU.For
Rothschild & co Asset ManagementFor

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