Ecolab Inc. | Independent board chair at Ecolab

Status
33.94% votes in favour
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
ECJ
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
Industrials
Company HQ country
United States
Resolved clause
RESOLVED: 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 as follows:
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
This policy could be phased in when there is a leadership transition.
Supporting statement
SUPPORTING STATEMENT: This proposal topic won 52% support at Boeing and 54% support at Baxter International. Boeing then adopted this proposal topic in June 2020. 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 our company. This proposal won 45% shareholder support at the 2023 Ecolab annual meeting. This laws more than double the support it received previously.
Meanwhile executive pay was rejected by 32% of the vote when a 5% rejection is often the norm at well performing companies. And Mr. John Zillmer, chair of the executive pay committee was rejected by 38% of the vote. The 45% support for this proposal in 2023 and the 32% rejection of executive pay were all the more noteworthy since the Board of Directors made a special appeal to shareholders to oppose this proposal and to approve executive pay.
According to the 2023 Ecolab proxy Jeffrey Ettinger, the Ecolab Lead Director, does not originate any information, schedules or agendas that are forwarded to other Ecolab directors. A lead director is thus no substitute for an independent board chairman. With the current CEO serving as Chair this means giving up a substantial check and balance safeguard that can only occur with an independent Board Chairman. A lead director cannot call a special shareholder meeting.
A lead director can delegate many details of his lead director duties to others and then simply rubber-stamp it. The Board of Directors has not explained how shareholders can be sure of what goes on in regard to lead director delegation. The Board of Directors failed to publish any comparison of the duties of an Ecolab Chairman compared to the duties of a lead director.

Filed by John Chevedden.

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