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|FLEETCOR TECHNOLOGIES INC filed this Form DEF 14A on 05/01/2017|
Our Board of Directors recommends you vote "AGAINST" this proposal.
The following is the text of the Stockholder Proposal of John Chevedden:
Proposal - Simple Majority Vote
RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws 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.
Shareowners 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. The proponents of these proposals included Ray T. Chevedden and William Steiner.
Currently a 1 %-minority can frustrate the will of our 66%-shareholder majority. In other words a 1 %-minority could have the power to prevent shareholders from improving our corporate governance.
This proposal is more important at our company. GMI Analyst said FleetCor Technologies failed to split the roles of CEO and Chairman and individually designate an independent lead director. This can compromise the board's independence from current management interests. Additionally, there were concerns regarding the previous history of board service for certain directors and since the board was classified, each director is not held accountable to shareholders on an annual basis.
FleetCor Technologies did not disclose specific, quantifiable performance target objectives for the CEO for all incentives in advance of the performance periods. The board had not established a claw back policy for the recoupment of executive pay in the case of financial restatements and/or fraud. Such policies allow boards to recoup incentive payouts that may have been given based on fraudulent financial reporting.
In addition, various takeover mechanisms in place unduly limit shareholder rights. This included the lack of shareholder proxy access, the lack of full majority voting standards that would require automatic removal of incumbent directors if they failed to receive the required votes, and the lack of shareholder rights to call a special meeting or to act by written consent.
Please vote to enhance shareholder value:
Proposal - Simple Majority Vote
FleetCor’s Statement in Opposition to the Proposal
The Board Recommends You Vote "AGAINST" This Proposal.
The Board believes the existing voting standards contained in our Certificate Of Incorporation and Bylaws are appropriate and in the best interests of our company and our stockholders and therefore recommends a vote against this proposal. The Board of Directors makes corporate governance decisions consistent with its fiduciary duties and our company’s best interests. Nearly all matters voted on by our stockholders already rely on a majority voting standard. Our Certificate Of Incorporation and Bylaws require a supermajority vote only with respect to a few specified items that have long-lasting impact on important company policies. These items consist of (1) dissolution of the company, (2) the existence and structure of the Board of Directors, (3) removing for cause a director or the entire Board of Directors, (4) scope of director liability, (5) stockholder action by written consent in lieu of a meeting, (6) stockholder Bylaws amendments, and (7) company Charter amendments. The purpose of the supermajority voting standard is not to preclude change but to ensure that certain fundamental changes only occur with a broader stockholder consensus than a majority. The Board believes that a supermajority vote standard for these matters appropriately assures that no significant disruption to our governance is made without the broad support of our stockholders. This voting requirement helps protect against actions by short-term or private interest-driven stockholders who, unlike the Board, owe no legal duty of any kind to their fellow stockholders and are free to pursue their narrow agendas irrespective of the greater corporate good. Further, the Board has a duty to act on a fully informed basis and in the best interests of all stockholders-a duty that stockholders generally do not have with respect to one another. Applying a majority of votes cast voting standard to all issues could result in short-term stockholders acting in their own self-interest to the detriment of other stockholders. Further, the Board opposes the proposal as drafted because its sweeping “one-size-fits-all” voting standard - requiring a single voting standard for all matters -deprives stockholders and the Board of Directors of the ability to thoughtfully assess and choose the appropriate voting standard for each provision.
Currently, our largest 15 stockholders have the ability to vote more than 50% of our outstanding shares. Because of this concentration of holdings, without the protection of supermajority voting for limited fundamental changes, a relative handful of stockholders could implement these changes even if most stockholders disagreed. The Board of Directors believes that extraordinary transactions and