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REEDS, Inc. Message Board

  • bluestem1 bluestem1 Nov 22, 2013 11:16 AM Flag

    Proxy Proposal 5 - BOD Nominations

    I'm not sure how to vote on proposal 5, where shareholder with 1% stakes can nominate directors. It is redonk that two board members own zero shares. If anything, it calls into question their business decision-making. I couldn't imagine seeing the stock price at $1 with all the internal data and launching K and not buying shares, even a token amount.

    But, looking further into the proxy statement, the board is paid peanuts. The directors were paid between $750 and $12,000. I think this is one of the lowest board comps I have seen. I don't think they are abusing their positions at all. Also the proxy proposal allows nominations up to 24% of the board. This would be 1 director even if the board expands to the max. I'm not sure what one director could do.

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    • jm Dec 9, 2013 4:21 PM Flag

      I'm the proponent and, of course, would recommend a vote in favor of proxy access. As I mention in the proposal and you acknowledge, two out of five board members own no stock. They are paid so little, one doesn't regularly attend board meetings. Also, look at their bios, can't we do better.

      Reeds has great products but needs more help in distribution. Check your local stores, how many have eight flavors of Reed's Culture Club Kombucha, or even one? Also, take a look at Reeds preliminary proxy filing and compare it to the final. You will see that neither management nor the attorney they hired knew the deadline for proxy proposals they announced in last year's proxy. Neither did they seem to know that two of their directors hold no stock!

      Vote against Mr. Muffoletto and Mr. Fischman. Without at least some investment in our company, they have little incentive to be diligent board members. Mr. Muffoletto receives $12,096 a year for his service, primarily for chairing the audit committee. However, Mr. Fischman received only $750 for his service as a board member. It is no wonder that, according to the proxy, “during 2012 Michael Fischman attended less than 75% of the aggregate board meetings and committee meetings held” (page 14 of the proxy). Preparing for and attending 10 board meetings is a lot to ask for $750, and that doesn’t count committee meetings. With nothing invested in Reeds and so little pay, can anyone really expect these two directors to spend much effort reviewing and advising management?

      I also recommend voting against item #4, which seeks shareowner approval of a say-when-on-pay only once every three years. See Council of Institutional Investors Policies on Corporate Governance, page 12, item 5.2.
      Advisory Shareowner Votes on Executive Pay: All companies should provide annually for advisory shareowner votes on the compensation of senior executives. Shareowners shouldn’t have to wait three years to advise our Board on its pay policies and practices

      Sentiment: Buy

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