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Egan-Jones Recommends Negative Vote for Most of Equifax Board due to Current Cybersecurity Rating
While Egan-Jones generally only recommends a "withhold" for the Board Chair in such cases, we believe the ongoing nature of cybersecurity issues at Equifax demand a stronger response at this time. Specifically, in our report, we state:
"…in addition to the WITHHOLD recommendations and justifications mentioned above, we recommend that clients WITHHOLD votes from Board members Mark Feidler, Robert Marcus, Siri Marshall, Mark Templeton, John McKinley, G. Thomas Hough, Scott A. Mcgregor and Elane B. Stock due to the current poor Egan-Jones Cybersecurity Rating and a previous history of serious cybersecurity issues.
While we note above that the Company has received a Cybersecurity Risk Rating of "Needs Attention" and our belief that the Chairman should be held accountable for this rating, we also note that the foregoing directors, who served at the time of the 2017 data breach, in our opinion, fell well short of their fiduciary duties and oversight in regards to managing the risks involving the cybersecurity of the Company. Equifax is a company whose entire business model is based on trust and the identity information of consumers, in our view, both the board and management should have acted collectively and aggressively in their best efforts to secure the interests not only of their consumers but the shareholders as well.
It is our opinion that in an era where both regulators and Congress have moved their focus onto cybersecurity and privacy issues, the failure of the Board to effectively manage this issue puts the equity of the shareholders and the very existence of the Company at risk."
Recent observations of the firm's internet presence by our cybersecurity partner show several significant and ongoing concerns in regards to cybersecurity at the Equifax. More information on how the Cybersecurity rating is derived can be found at http://ejproxy.com/
We are also recommending "against" the firms auditor choice, Ernst & Young, LLP, due to a poor score on the EJP Audit Rating. The firm received a score of "Needs Attention" for this rating too. We are of course also concerned by Equifax's poor results on so many of our Governance Ratings.
For questions on this or any other EJP reports please contact Kevin McManus, Vice President and Director of Proxy Services, using the contact details below.
Vice President and Director of Proxy Services
Egan-Jones Proxy Services
61 Station Road
Haverford, PA 19041
Egan-Jones Proxy Services ("EJP") is a leading provider of independent proxy research, voting recommendations and voting services to a variety of institutional investors. EJP assists institutional fiduciaries in determining voting directions as well as assisting in the administrative submission of proxy voting, and provides research, recommendations, voting, and voting record retention services on various shareholder proxy voting matters. EJP was established in 2002 by the Egan-Jones Ratings Co., Inc. ("EJR"), a nationally recognized statistical rating organization ("NRSRO") as designated by the U.S. Securities and Exchange Commission. EJR provides credit rating services for primarily institutional clients. EJP is a related division of EJR, and is not a subsidiary or stand-alone corporate entity. EJP and EJR have physical and electronic safeguards in place to prevent conflicts of interest and the sharing of client data.