NetApp investors support written consent proposal for second consecutive year

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John Chevedden’s shareholder proposal, seeking the right to act by written consent, won majority support for the second consecutive year at NetApp’s September 10 annual meeting.

Support for Chevedden’s proposal increased to 51.6% this year, compared to 50.4% support at the S&P 500 data storage company’s 2020 annual meeting, according to Proxy Insight Online data.

“The avalanche of bare-bones online shareholder meetings in 2020 makes the shareholder right to act by written consent more valuable,” the proposal read. “Shareholders are so restricted in online meetings that management will never want a return to the more transparent in-person shareholder meeting format.”

A counter-proposal put forward by management, seeking the right to act by written consent, won 98.1% support. Management’s written consent proposal differed from Chevedden’s, in that it required shareholders to own an aggregate 25% of outstanding common stock.

Chevedden described management’s counter-proposal as “restriction riddled,” and told Proxy Insight Online, that “shareholders who voted for my 2020 written consent proposal were not deceived by the 2021 management written consent proposal.”

In a regulatory filing seen by Proxy Insight Online, shareholder activist John Chevedden argued that the right to act by written consent with a threshold exceeding 20% is “useless,” and for shareholders to be given the “genuine right” to act by written consent thresholds must not exceed 10% of shares.

NetApp is not the first company to file restrictive counter-proposals in an attempt to dissuade investors from supporting popular shareholder proposals.

This approach was recently employed by Electronic Arts (EA), in response to James McRitchie’s and Myra Young’s resolution, which asked the S&P 500 multimedia company to provide shareholders with the right to act by written consent.

Proxy Insight Online editor Rebecca Sherratt’s latest Activism & Voting this Week column provides more insight into how boards are using counter-proposals to limit shareholder’s rights.