NEW YORK, Feb. 22, 2018 /PRNewswire/ -- Neuberger Berman has been a long-term holder of Nuance Communications, Inc., owning shares on behalf of our clients for over five years, and has engaged with the Board of Directors to help drive changes that Portfolio Managers believe could lead to long-term value creation.

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide. With offices in 18 countries, Neuberger Berman's team is more than 2,100 professionals. Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking. For more information, please visit our website at www.nb.com . (PRNewsFoto/Neuberger Berman Group LLC)

In a public letter issued on December 12, 2017, we expressed our concerns as to the process and transparency of the CEO succession plan, as well as the company's corporate governance practices.

We note that today, 14 months after CEO Paul Ricci announced his retirement and only a few weeks before he is about to retire, shareholders have not received any meaningful update about the CEO succession, and a new CEO has not been announced. We remain concerned as to the Nuance Board's ability to execute the announced CEO succession plan, and the departing CEO's influence on the process.

We believe that the shareholders' right to call a special meeting – a proposal that appears on the ballot for the upcoming annual meeting of shareholders – will allow shareholders to act in case the Board fails to execute on the succession plan and prevent a delay of the decision for another year.

Moreover, we strongly believe that it is a fundamental shareholder right to call a special meeting, a belief we have publicly codified in our Governance and Proxy Voting Guidelines where we state our general support for shareholder or management proposals granting these rights.[1] Our view is supported by organizations like the Council of Institutional Investors, representing over $25 trillion in assets under management. [2] This corporate governance best practice has been adopted by a majority of Russell 1000 companies.[3]

The proposal is especially important for Nuance shareholders, given the absence of a right to act by written consent or a majority vote, a history of poison pill adoption, and several years of poor support for Board proposals at shareholder meetings. We note that the Board has chosen not to issue a recommendation on this shareholder proposal, which we see as a positive step in improving the Company's overall governance profile.

Both Glass Lewis and ISS have voiced support for the proposal, which ISS noted would "help to increase accountability of the board and management" and quoted our above-referenced letter as an indication of concern.[4] We agree with the proxy advisors' assessment and are hopeful about the potential for positive change.

For all of those reasons, Neuberger Berman intends to vote FOR the shareholder proposal.

We hope and expect the proposal will receive significant support from shareholders, and that the Board will follow the proponent's statement and promptly adopt the right unilaterally. We appreciate the changes Nuance has already implemented, and look forward to a continuing dialogue with the Board of Directors.

For context and information on past Neuberger Berman actions regarding Nuance, please click here.

 

Nuance Communications (NUAN) Corporate Governance Provisions

http://investors.nuance.com/corporate-governance






Incorporated In

Poison Pill





Delaware

Expired






NUAN-US

Supermajority to

% Firms with Provision

Board

Y/N

Source

Amend/Repeal (% required)

SIC Grp 73

Russell 1000

Majority Vote Standard to Elect

No

Bylaws

N/A

34.79

75.98

Director Resignation Policy

No

N/A

N/A

38.93

79.91

Classified Board

No

State Default

No

54.26

24.35

Board Can Increase/Decrease Board Size

Yes

Charter/Bylaws

No

100.00

99.78

Directors Removed Only for Cause

No

Bylaws

No

52.07

35.02

Supermajority Vote to Remove Directors (% required)

No

Bylaws

No

31.63

24.69

Supermajority Only if Removal Without Cause (% required)

No

Bylaws

No

2.68

1.57

Board Fills All Vacant Seats 

Yes

Bylaws

No

82.73

80.25

Voting






Proxy Access (% required)

Yes

Bylaws (3)

No

11.44

44.33

Cumulative Voting

No

State Default

No

2.43

3.03

Action by Written Consent

No

Charter/Bylaws

No

28.71

28.62

Unanimous Written Consent

No

Charter/Bylaws

No

13.38

28.28

Shareholders Can Call Special Meetings (% required)

No

Bylaws

No

37.47

56.12

Supermajority for Mergers (% required)

No

State Default

No

8.76

20.31

Supermajority Does Not Apply to Board Approved Mergers

No

State Default

No

3.16

6.40

Supermajority to Amend All/Certain Charter Provisions (% reqd)

No

State Default

No

58.64

48.60

Supermajority to Amend All/Certain Bylaw Provisions (% reqd)

No

State Default

No

41.85

24.02

Advance Notice for Proposals (minimum days)

Yes

Bylaws (90)

No

48.18

29.41

Advance Notice for Nominations (minimum days)

Yes

Bylaws (90)

No

47.93

29.41

Derivative Disclosure in Advance Notice Requirements

No

N/A

No

58.39

71.16

Other Provisions






Blank Check Preferred Stock

Yes

Charter

No

96.11

95.85

Board Can Amend Bylaws w/out Shareholder Approval

Yes

Charter/Bylaws

No

98.54

98.65

Exclusive Forum

No

N/A

No

42.09

43.55

Fair Price Provision (trigger %) (company sponsored)

No

N/A

No

4.14

11.90

Expanded Constituency Provision (company sponsored)

No

N/A

No

4.87

7.97

Anti-Greenmail Provision (company sponsored)

No

N/A

No

0.49

2.47

Poison Pill In Force

No

N/A

N/A

5.84

2.24

Anti-Poison Pill Provision

No

N/A

No

0.24

1.46

Poison Pill Policy

No

N/A

N/A

1.22

8.64

Unequal Voting (Dual Class)

No

N/A

No

11.92

11.78

Ownership Limit

No

N/A

N/A

3.41

14.59

Other Defense Text

N/A







Source: Factset






 

About Neuberger Berman

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages a range of strategies—including equity, fixed income, quantitative and multi-asset class, private equity and hedge funds—on behalf of institutions, advisors and individual investors globally. With offices in 20 countries, Neuberger Berman's team is approximately 1,900 professionals. For five consecutive years, the company has been named to Pensions & Investments Best Places to Work in Money Management survey (among those with 1,000 employees or more). Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking. It manages $295 billion in client assets as of December 31, 2017. For more information, please visit our website at www.nb.com.

All information is as of December 31, 2017 unless otherwise indicated and is subject to change without notice. Firm data, including employee and assets under management figures, reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC. Firm history/timeline includes the history of all firm subsidiaries, including predecessor entities and acquisitions. Links to third party websites are furnished for convenience purposes only. The inclusion of such links does not imply any endorsement, approval, investigation, verification or monitoring by Neuberger Berman of any content or information contained within or accessible from the linked sites.

This material is being issued on a limited basis through various global subsidiaries and affiliates of Neuberger Berman Group LLC. Please visit www.nb.com/disclosure-global-communications for the specific entities and jurisdictional limitations and restrictions.

The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC.

© 2018 Neuberger Berman Group LLC.

All rights reserved.


[1] https://www.nb.com/_layouts/www/ap/downloadasset.aspx?asset=documents/public/en-us/nb_proxy_policy_guidelines.pdf 
[2] http://www.cii.org/corp_gov_policies 
[3] See Attached Factset analysis
[4] ISS Proxy Analysis & Benchmark Policy Voting Recommendations

Media Contact: Alex Samuelson, 212.476.5392, Alexander.Samuelson@NB.com

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SOURCE Neuberger Berman

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