How AMN has enhanced its proxy

Jan 25, 2019
AMN Healthcare recently took home the 2018 prize for best proxy statement (small to mid-cap)

Investors are increasingly looking for issuers to communicate their ESG strategy. In the US, the formation of the Investor Stewardship Group (ISG) – which has 34 signatories and 22 endorsers – this year underscores the extent to which this is becoming a mainstream concern.

This was certainly the feedback AMN Healthcare received during a round of shareholder engagement last year, particularly during meetings with one of its largest shareholders, Hermes Investment Management, which holds AMN Healthcare stock in two different funds. The company responded by producing its first ever CSR report, which it incorporated into its proxy statement.

The end-product was a page in the proxy statement that used plain English to articulate the company’s definition of ESG and how it factors into AMN’s strategy. The disclosure was further enhanced by a simple flow chart that outlined the ESG risks the company had identified and the course of action it was taking to address them.

Of course, one of the key areas of focus in any proxy statement is the CD&A, and AMN Healthcare’s internal legal team undertook a research and benchmarking project last year to understand how it could enhance its CD&A with the use of graphics and charts. As with GM’s proxy statement (see Balancing style with substance, opposite), AMN’s CD&A strikes a balance between style and content.

The introduction of pie charts that show total compensation broken down into base pay, short-term incentives and long-term incentives, as well as signaling how much of the total package is ‘at risk’, aids the narrative. The wording around these charts clearly articulates how compensation is connected to performance, risk and strategy.

In light of the company’s enhanced ESG disclosure, the legal team also took the opportunity to explain how the compensation committee recently reviewed and refreshed its strategy to commit to equal pay. This, along with other highlights of the compensation strategy, were neatly formatted in a table titled ‘What we do/what we don’t do’ – another good example of design and storytelling working in tandem.

AMN’s board also revised its governance guidelines this year to enhance its articulation of what diversity means to the board, why it matters and how the board identifies new directors. This allowed the legal team to highlight these new practices and showcase the various skills its directors bring to the table in the proxy statement. Each director has his/her own summary, including biographical information, age, the committees he/she participates in and his/her key skills.

Ultimately, AMN Healthcare’s small in-house legal team elevated its proxy statement by adding new charts and graphics. But the quality of the plain English language disclosure – often articulating clear links between governance topics and company strategy – and the thought that has gone into how graphics and text can work together stood out for the judges, making this a worthy winner of the category.

This article originally appeared in the latest Corporate Secretary special report. Click here to view the full publication.


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