2022 Stockholders Meeting Proposal on Board Structure Reform

Resolved: stockholders recommend that Gilead Sciences, Inc. (the Company) reform the board structure to include one member of board of directors from the Company’s non-management employees.

Supporting Statement

There is a new trend pushing for non-management employee representation on boards, such as shareholder proposals to Amazon to include workers on board. “Appointing workers’ representatives to company boards may be an idea whose time has come,” says Harvard Business Review, and a study found that employee representation on boards generated a 25% spike in productivity and increased wages.[1] This is a common practice in Europe.  Under the latest revised UK Corporate Governance Code and amended corporate regulations, boards must engage with employees and the wider workforce to enhance the employee voices in the boardroom.[2]

American corporate board structure needs reform now.  For example, America’s ballooning executive compensation is neither responsible for the society nor sustainable for the economy.  There is no rational methodology to decide the executive compensation, particularly when there is no employee representation on boards.  The executive compensation and pay ratios of big European and British companies are much less than that of big American companies. Our Company’s CEO pay ratio was 169 to 1 in 2019 and 76 to 1 in 2020; 16.4% and 12.9% voted against the Company’s proposals on executive compensation at the 2020 and 2021 shareholders meetings.

It is time for American executives as citizens to take the social responsibility on their own initiative rather than to be forced by the public and the government. The board has the flexibility to design guidelines to select a candidate for the new board nominee from non-management employees.

[1] https://www.govenda.com/blog/employee-representation-on-boards/

[2] https://www.pinsentmasons.com/out-law/analysis/corporate-governance-employee-voice-workplace-reporting