8-KShareholder MattersCorporate ChangesExhibits & Filings

CENTENE CORP 8-K Report, Bylaw Amendment (Apr 28, 2022)

Filed April 28, 2022For Securities:CNC

Summary

Centene Corporation (CNC) has filed an 8-K report detailing significant changes approved at its 2022 Annual Stockholder Meeting on April 26, 2022. The most impactful change for investors is the approval of an amendment to the Certificate of Incorporation to declassify the Board of Directors over a three-year period, commencing with the 2023 annual meeting. This move means that all directors will be elected annually going forward, increasing director accountability to shareholders. Additionally, the company's bylaws have been updated to reflect this declassification and include the Chief Executive Officer as an officer. While the declassification proposal passed overwhelmingly, other shareholder-related proposals saw mixed results. The ratification of KPMG LLP as the independent auditor was approved, but the company's executive compensation plan did not receive majority advisory approval, and the board's proposal for a stockholder right to call a special meeting was rejected, while a shareholder-sponsored proposal for the same right was approved. These governance changes, particularly the board declassification, represent a shift towards greater shareholder alignment.

Key Highlights

  • 1Centene Corporation's Board of Directors will be declassified over a three-year period, with all directors to be elected annually starting in 2023, following stockholder approval.
  • 2Amendments to the Company's Amended and Restated Certificate of Incorporation and By-Laws were approved to implement the board declassification.
  • 3The appointment of KPMG LLP as the independent registered public accounting firm for fiscal year 2022 was ratified by stockholders.
  • 4A non-binding advisory vote on executive compensation did not receive majority approval from stockholders.
  • 5The Board's proposal to grant stockholders the right to call a special meeting was not approved.
  • 6A shareholder proposal to grant stockholders the right to call a special meeting was approved, indicating shareholder desire for enhanced governance rights in this area.

Frequently Asked Questions

The most significant governance change is the declassification of Centene's Board of Directors. This means that starting with the 2023 annual meeting, all directors will be elected annually for one-year terms, rather than staggered three-year terms. This transition is designed to increase director accountability to shareholders.

The non-binding advisory vote on executive compensation did not receive majority approval from Centene's stockholders. This is an advisory vote, so it is not binding on the Board, but it signals shareholder sentiment regarding the company's compensation practices.

Yes, there was a divergence. The Board's proposal to allow stockholders to call a special meeting was not approved. However, a separate shareholder proposal seeking the same right was approved by stockholders. This indicates a clear shareholder preference for having the ability to call special meetings.

The declassification means that beginning at the 2023 annual meeting, all director nominees will stand for election to serve for a single, one-year term expiring at the next annual meeting. This contrasts with the previous structure where directors were elected for staggered three-year terms.