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:
Selection of the Chairman of the Board The Board requires the separation of the offices of the Chairman of the Board and the Chief Executive Officer.
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 proposal soon. However this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.
This proposal won 43%-support at both the 2023 and 2024 Cummins annual meeting. It takes much more Cummins shareholder conviction of the merits of this proposal to vote for this shareholder proposal than to reflexively vote according to the Cummins Board of Directors instructions.
There are at least 3 ways 43%-support can be considered a 50%+ majority vote at Cummins. This 43% vote was especially impressive because this proposal had to swim upstream against a negative Cummins special solicitations sent to the Cummins shareholders who have no access to independent proxy voting advice. This Cummins special solicitation was sent out a month after all the required proxy materials had been sent out. Had the special solicitation not been sent out the 2024 edition of this proposal might have received a 50%+ majority vote.
The 43% vote also likely represented a 50%+ majority vote from professional investors who had access to independent proxy voting advice. Any proposal that gets above 40% support is probably obtaining a 50%+ majority vote from the most informed shares because there is an overwhelming abundance of automatic against votes from the Cummins shares that have no access to independent proxy voting advice.
The Board of Directors disingenuously put forth a deceptive 2024 opposition statement to dupe the most vulnerable Cummins shareholders who have no access to independent proxy voting advice. The deceptive Board of Directors statement claimed that previous editions of this proposal purportedly received a low vote based on the percent of “For” votes compared to all Cummins shares outstanding, including the large number of Cummins shares that did not vote.
Yet right after this deceptive argument Cummins disclosed that the success of the 2024 proposal would be required to be judged based on the percent of Cummins shares that voted “For” compared to the Cummins shares that voted “Against.” Had the opposition statement not included a deceptive argument the 2024 proposal might have received a 50%+ majority.