At Commerce, we believe in driving progress through thoughtful stewardship. Our Proxy Voting Policy reflects our commitment to responsible decision-making, ensuring every vote aligns with the best interests of our clients and their investments.
The board, on behalf of the Commerce Funds, has delegated the voting of portfolio securities to the advisor in its capacity as investment advisor. Commerce has adopted proxy voting policies and procedures (the “Proxy Voting Policy”) for the voting of proxies on behalf of client accounts for which Commerce has voting discretion, including the Funds, to assess appropriately each proxy issue. The Proxy Voting Policy includes, but is not limited to, the advisor’s proxy policies with respect to: the election of the board of directors, appointment of independent auditors, issues of corporate structure and shareholder rights, executive and director equity-based compensation, and corporate social and policy issues. Commerce has also established a Proxy Voting Committee to address any unusual or undefined voting issues that may arise during the year as well as conflicts of interest involving proxy voting.
In addition, Commerce has engaged Broadridge to obtain, vote, and record proxies in accordance with the advisor’s Proxy Voting Policy. The advisor directs Broadridge how to vote the proxies through proxy guidelines. Broadridge will promptly notify the advisor of any proxy issues that are not covered by the proxy guidelines. Commerce does not believe that conflicts of interest will generally arise in connection with its proxy voting policies. However, if any conflicts do arise, the Proxy Voting Committee may consider engaging an independent third party to vote the proxy or take other measures to mitigate the conflict.
The following is a brief summary of some of the more significant proxy guidelines provided to Broadridge by the advisor on behalf of all the Funds:
| Board of directors | The advisor will generally vote in support of management’s nominees for the board of directors; however, they may choose not to support management’s proposed board if circumstances warrant such consideration. |
| Changes to capital structure | The advisor generally votes for management proposals to increase or decrease common stock. The advisor will vote against authorization of preferred stock if the board has unlimited rights to set the terms and conditions of shares. |
| Corporate governance | The advisor votes for management proposals to eliminate cumulative voting, limit the liability of the directors, and adopt a declassified board. The advisor votes against management proposals to ratify or adopt shareholder rights plans (i.e., poison pills). The advisor will vote for management proposals to restore shareholders’ rights to call a special meeting, against management proposals to eliminate shareholders’ right to act by written consent, and against amendments to establish supermajority vote provisions to approve a merger or other business combination. |
| Equity compensation plans | The advisor votes for well-crafted, equity-based compensation plans that pay for performance and are both fair and competitive. The advisor generally votes for management proposals to adopt stock incentive plans, including those for non-employee directors, and to adopt employee stock purchase plans. However, the advisor votes against any stock incentive or awards plan (including increases to shares authorized to be issued under such plans) that results in dilution of more than 20% of the corporation’s outstanding common stock or that allows the repricing of options without shareholder approval. The advisor will also generally vote against management proposals to accelerate the vesting of outstanding awards or that allow for grants of reloaded stock options. |
| Shareholder proposals | The advisor generally votes for shareholder proposals that seek to increase board independence, support majority voting to elect directors, and eliminate or reduce supermajority charter or bylaw provisions. The advisor will also generally vote for shareholder proposals to allow increased shareholder participation at shareholder meetings through the ability to call special meetings and ability for shareholders to nominate director candidates to a company’s board of directors. The advisor generally votes for the elimination of anti-takeover devices such as poison pills and classified boards. The advisor will vote against shareholder proposals to request that the chairman of the board be chosen from the non-employee directors and restrict executive officer or director compensation. |
A description of the policies and procedures that the advisor uses to determine how to vote proxies relating to the Funds’ portfolio securities is available (i) without charge, upon request, by calling 1-800-995-6365 or on the Funds’ website at www.commercefunds.com and (ii) on the SEC’s website at www.sec.gov.
Information regarding how the advisor voted proxies relating to portfolio securities held by The Commerce Funds during the most recent 12-month period ended June 30 is available (i) without charge, upon request, by calling 1-800-995-6365 or on the Funds’ website at www.commercefunds.com and (ii) on the SEC’s website at www.sec.gov.