Wednesday, July 29, 2015

Urban Outfitters loses two votes on governance issues

Shareholders rebuffed the retailer by approving two proposals that seek to change how they elect candidates for the board of directors.

Urban Outfitters loses two votes on governance issues

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The lopsided vote tallies in most corporate elections are so routine that it's only when a company loses a vote that you realize that occasionally shareholders can rally to send a message to the board.

Urban Outfitters Inc. lost two votes on shareholder proposals at its May 22 annual meeting. Shareholders approved a non-binding proposal trying to change board elections from pluraity voting to majority voting.

(In the former, receiving just one "for" vote in an uncontested election means a director is elected. In majority voting, a nominee must receive a majority of the votes cast.)

That proposal was approved with 68.25 million "for" votes, or 52.5 percent of the votes cast, according to a document filed with the Securities and Exchange Commission.

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The Philadelphia retailer also was rebuffed when shareholders approved a non-binding proposal seeking to "declassify" the board of directors. In other words, the measure seeks to force all directors to stand for election annually rather than current system of three classes where just two directors face voting in a given year.

That proposal attracted even more support receiving 77.98 million "for" votes, or 60 percent of the votes cast.

A third shareholder proposal sought to address the lack of diversity on Urban Outfitters' board by urging the board to commit to considering it when picking board candidates. That measure was defeated, but attracted more "for" votes this year than last -- 38 percent in 2012 compared with 23 percent in 2011.

Note the word "non-binding," however. Urban Outfitters isn't required to change anything as a result of losing such votes. However, shareholder activitists say that boards generally address the results at a future meeting and some do change their governance practices to appease their shareholders.

Inquirer Columnist
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About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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