Crown Castle International (CCI) - Get Report has bowed to pressure from Elliott (as we previously covered) in announcing sweeping governance changes alongside their earnings report earlier this week:
· New mandatory non-employee director retirement age of 72
· New executive compensation program review to “ensure it aligns with the interests of all shareholders and industry best practices”
In congruence with the new bylaws 5 directors are announced to be leaving:
· Robert E. Garrison, Edward C. Hutcheson and Robert McKenzie will not stand for re-election at the 2021 Annual Shareholder Meeting, all of whom are already older than 72
· Lee W. Hogan and Chairman J. Landis “Lanny” Martin will not stand for re-election in 2022 (also older than 72)
It’s a strong retreat for the company as many of these directors have been serving together for so long (upwards of 20+ years). In addition, the board will go from 2 former CEOs to just one (Benjamin Moreland) with Hutcheson’s retirement.
It will be interesting to see who they tap to fill the impending vacancies, which will almost assuredly include more women (just two currently sit on the board) - also a point of contention for Elliott.
Separately, on executive compensation, Elliott had previously argued that the current incentive plan did not take into account the capital intensity of its fiber strategy and thus should incorporate ROIC in its plan. It will be worth following the changes, if any, the compensation review takes into account.
Chairman Lanny Martin said, "Following significant engagement and input from a broad section of our shareholders, the Board is focused on continuing to implement best-in-class corporate governance practices that align with the execution of Crown Castle's long-term strategy. The Board refreshment plan and governance enhancements will help support our objective of ensuring Crown Castle is well positioned to continue creating long-term shareholder value."