An activist investor is urging HCA Healthcare's corporate governance committee chairwoman to help pass a proposal that would get rid of the company's supermajority voting requirements, according to the Nashville Business Journal.
Five things to know:
1. The supermajority voting rule requires affirmative votes by the owners of 75 percent of HCA's shares to make changes related to certain matters, such as the size of the board, according to Nashville, Tenn.-based HCA's proxy statement.
2. In a filing with the Securities and Exchange Commission, activist investor John Chevedden says the proposal brought by shareholders to eliminate the supermajority voting rule is the most important proposal on the ballot at the company's upcoming annual meeting because it is the only item that may not obtain the necessary votes.
"Due to the antiquated corporate governance of HCA Holdings, Proposal 4 needs 75 percent of the vote from every last forgotten share of HCA stock in the attic," Mr. Chevedden said in the SEC filing. "A share that is not voted is the same as a share that votes against."
3. A similar shareholder proposal failed in 2017. It received 72 percent of the vote, when a 75 percent approval vote was needed.
4. While some activist investors are solely focused on maximizing shareholder value, that is not the case with Mr. Chevedden, according to the Nashville Business Journal. He pushes for better corporate governance.
5. In its proxy statement, HCA's board explained the potential benefits of supermajority voting rules, but ultimately asked shareholders to ax the requirements.
Access the full Nashville Business Journal article here.
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