Shareholder and Proxy Advisor Outreach
We regularly communicate with a large portion of shareholders throughout the year and solicit feedback on key business and corporate governance topics. Additionally, we have a formal process of outreach to our top shareholders prior to our annual meeting to address highlights or changes to our corporate governance practices, including executive compensation programs. The results of these conversations are discussed with both the SCI Board and our management. The Board then decides whether any action should be taken. In February 2018, we also hosted an Investor Day, which featured a comprehensive overview of the Company's operations, strategy, and outlook. The day included presentations and interactions with several members of the SCI management team. As part of our normal procedures, we also engage with proxy advisors who represent the interests of certain of our shareholders. We continue to have an open dialogue with Glass Lewis and Institutional Shareholder Services ("ISS") and use their constructive feedback to continuously enhance our disclosures.
Before Filing of Proxy
- In January through March of 2018, we proactively engaged with our top holders to discuss our planned response to the 2017 proposals regarding the adoption of the simple majority voting requirement and the declassification of our Board.
- As part of this process, we spoke to shareholders representing approximately 62% of the Company's outstanding common stock.
- The results of these conversations were discussed with our Board and used to form our responding proposals that were presented in the 2018 Proxy Statement.
Prior to Annual Meeting
- In April and May of 2018, after our Proxy statement had been filed we again reached out to shareholders representing approximately 43% of the Company's common stock.
- We highlighted new additions to our Board, changes in the compensation performance unit plan to include a return on equity metric, and discussed any remaining issues related to the proposals prior to our 2018 Annual Shareholder Meeting.
- The large majority of investors we spoke to expressed support for the proposals to declassify the Board and to eliminate or reduce certain supermajority vote requirements.
- We received favorable comments regarding the efforts made to significantly reduce the tenure and enhance diversity of the Board by presenting two new candidates for election that received approval of 99% of votes.
- We also discussed the shareholder proposal to require an Independent Board Chairman. The strong majority of investors we spoke to favor our current leadership structure, with Tom Ryan as CEO and Chairman, given the appointment of an effective Independent Lead Director and the success of the Company.
Annual Meeting of Shareholders
- We were pleased that the proposals presented by the Company to declassify the Board, eliminate certain supermajority requirements, and reduce the supermajority vote requirement for approved business combinations recieved approval by more than 99% of the votes cast.
- The proposal submitted by a shareholder to require an Independent Board Chairman was rejected by over 59% of the shareholders voting.
The Board continues to place a high priority on listening to and considering the views of our shareholders. We accomplish this through a robust outreach and engagement program. Key areas of focus in early 2018 were discussions regarding the adoption of simple majority voting requirement and the declassification of our Board.
We believe our ongoing shareholder outreach efforts have allowed us to better understand the viewpoints of our shareholders as well as providing an opportunity to communicate with transparency what the Board is doing and how our decisions are aligned with our business goals.
Adoption of Best Practices
We have a history of thoughtful consideration of shareholder feedback and monitoring corporate governance best practices. The timeline below demonstrates our governance enhancements beginning with CEO Tom Ryan's promotion to Chairman in 2016 with respect to Board structure, shareholder rights and executive compensation. We also remain continually focused on Board composition and committed to evaluating our disclosures to promote transparency.
|Year||Board Recommendation||Board Composition|
Created role of Lead Independent Director with enhanced authority to call special Board meetings and to preside over Board Meetings in the absence of the chairman
Refreshed proxy statement to improve readability and enhance disclosures, including skills and experiences of Directors
Appointed CEO Thomas Ryan as Chairman of the Board
Appointed Tony Coelho as Lead Independent Director
Board member Malcolm Gillis passed away (October 2015) after serving on the Board for eleven years
Adjusted Director compensation based on feedback from advisory firms
The Board, in response to shareholder feedback, approved changes to the performance unit plan to add a return on equity modifier to the total shareholder return metric and changed the award denomination to share units rather than cash beginning in 2018
Shareholders are allowed to call special meetings
Board recommended and shareholders approved, the de-classification of our Board of Directors
Board recommended, and shareholders approved, elimination and reduction of certain supermajority voting requirements in our Articles of Incorporation and Bylaws
We eliminated the Umbrella Plan due to certain changes in the Tax Act
Added diverse perspectives and experience to our Board wit hthe addition of Ms. Sara Martinez Tucker and Ms. Jakki Haussler to our Board
After 56 years of meaningful contributions, in order to rectuit the next generation of Board leaders, Mr. R.L. Waltrip decided not to seek re-election( he continues to actively participate as Founder and Chairman Emeritus)
Long-time member, Dr. Ed Williams, passed away after serving on the Board for 27 years.
We have enhanced disclosures around Environmental, Social, and Governance(ESG)
The Board made changes to the Company's Bylaws to permit the Chair of the Nominating and Corporate Governance Comittee of the Board to preside over the Board meetings in the absence of the Board Chair, Lead Director and the Chief Executive Officer
After 36 years of service on the Board of Directors, John Mecom decided to not seek another term as a Board member
We continue our ongoing best practices including:
- Majority Voting Standard in Director Elections
- Annual Board and Committee evaluation process
- Board orientation and education program
- No shareholder rights plan or “poison pill”
- Shareholder (10%) ability to call special meetings
- Anti-hedging and anti-pledging policies applicable to all Directors and officers
- Stock ownership and retention guidelines for Directors and officers
Environmental, Social, and Governance Practices (ESG)
Workforce and Diversity
We understand our associates are one of our greatest assets. Increased diversity enables us to make solid business decisions, considering different points of view, and remain relevant with our customers.
In 2018, we held our first Women's Leadership Conference, expanded our inclusive leadership training, and began establishing metrics to track trends and progress for inclusion and diversity.
For a second year, SCI obtained certification as a Great Place to Work. This certification will increase awareness of our Company culture and build visibility for what we value to all stakeholders.
Tom Ryan, our CEO and Chairman, joined the CEO Action for Diversity & Inclusion™, and has pledged to continue to act on supporting a more inclusive workplace.
In May 2018, Jakki L. Haussler and Sara Martinez Tucker were elected to the SCI Board of Directors. Both members bring unique perspectives and diversity to the Board.
- We are currently developing our Supplier Code of Conduct. We want our policy to ensure the suppliers we use reinforce safe working conditions and their associates are treated fairly and with respect.
- We believe reclaiming water for reuse applications instead of using freshwater supplies can be a water-saving measure. We are looking to expand this practice throughout our locations.
- We are making efforts to ensure our supplier diversity policy reflects the Company values. SCI already procures from a very large pool of small and diverse suppliers; however, we are taking steps to improve this by fostering an inclusive procurement process that provides the maximum opportunity for small and diverse businesses to participate as partners and suppliers of goods and services.
Data Privacy and Security
- We are committed to protecting the privacy of our clients and website visitors in a manner that would be expected of a leading provider of funeral, cemetery, and related services. We value our relationships with existing and prospective clients and recognize an essential element of those relationships is the trust and confidence of the families we serve.
- Dignity Memorial® funeral, cremation, and cemetery providers created the Public Servants Program. This program provides dignified and honorable tributes, at no cost, for career and volunteer law enforcement officers, firefighters, and emergency services personnel who fall in the line of duty.
- Dignity Memorial® funeral, cremation, and cemetery service providers are honored to administer the Dignity Memorial Homeless Veterans Burial Program across the nation. The U.S. Department of Veterans Affairs provides eligible veterans with opening and closing of the gravesite, a grave liner, a headstone or marker, a graveside ceremony, and burial in a National Cemetery. Participating Dignity Memorial funeral directors provide transportation, preparation, clothing, and caskets at no charge to veterans or their loved ones.
- For the past eleven years, we have participated in Donate Life's annual tribute to organ, eye, and tissue donors, and have helped many client families honor their loved ones with a portrait featured on the Donate Life float in the annual Rose Parade held every New Year's Day in Pasadena, California.
- In addition to compassionately serving families during their time of need, Service Corporation International professionals demonstrate an ongoing commitment to our communities. Please visit our new website below for more examples of how our Company is dedicated to giving back to the community.