Say on Pay

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Get comprehensive results in "Say on Pay Reports," in-depth analysis on Say on Pay results in our "Behind the Numbers" series, and insights on how companies are faring in "Vote of the Week."

Report update: votes ‘against’ pay total 28; results by industry

Now 11 weeks into our Say on Pay research and with 1200+ companies having reported, we've identified 28 total companies that have failed Say on Pay -- 10 more than last week. The additions are: Pitney Bowes, Hercules Offshore, Viad Corp, Community Health Systems, Phoenix Companies, CryoLife, Infinera Corporation, Palomar Medical, Simon Property Group, and Chemed Corporation. As we noted earlier this week, Hercules Offshore became the first company to fail Say on Pay in both 2011 and 2012. We delve into the context at Hercules in our 'Vote of the Week' (p. 3). This week, our report contains a new feature: Vote Results by GICS Sector (p. 5). Our early takeaway is that health care companies have received a disproportionate share of shareholder and proxy advisory opposition. Also notable...all companies in the consumer staples sector have passed Say on Pay. Only one company of 45 in the sector has received under 70% support. Read more

Vote of the Week: Hercules Offshore, first company to fail in 2011 and 2012

Hercules Offshore is the first company to fail Say on Pay in both 2011 and 2012, with 41% approval last year and 48% this year. We looked into the circumstances at Hercules Offshore and suspect that the failed 2012 Say on Pay vote was likely the result of increased pay year over year due to special retention awards coupled with proxy advisor concerns with several aspects of the program. Read more

Hercules Offshore: first company to fail SOP in both 2011 and 2012

Hercules Offshore is the most recent company to fail Say on Pay -- the 26th of the season -- according to its 8-K filing on Friday. 48% of shareholders voted for Say on Pay. Interestingly, Hercules Offshore also failed in 2011 (with 41% support). Our initial take of the factors influencing the vote: despite significant governance-related changes made (eg, removal of tax gross ups and share recycling, modification of equity terms to institute minimum vesting requirements, adoption of an anti-hedging policy), shareholders and their proxy advisors were concerned about increased pay year-over-year, special retention and performance awards, and specific compensation elements/practices. Read more

Behind the Numbers: What to expect with a supplemental filing

Our weekly Say on Pay report often raises interesting questions about what the data really mean. These questions are addressed in this series. Through May 15, 2012, at least 77 companies have filed supplemental proxy material specifically targeted at the Say on Pay vote, compared to 45 companies through the same period last year. Interestingly, our database shows that companies that make supplemental filings have experienced slightly lower Say on Pay votes than companies that do not file them, and that ISS recommendations are rarely reversed after a supplemental filing. Read more

Behind the Numbers: How have companies reponded to failed 2011 Say on Pay votes?

Our weekly Say on Pay report often raises interesting questions about what the data really mean. These questions are addressed in this series. As of May 15, all companies that failed Say on Pay in 2011 have passed in 2012. The average vote result for these 16 companies was 89%, an increase of 48 percentage points from 2011. We were curious what types of changes these companies made to their programs following the failed vote to create such an increase in support. Read more

Vote of the Week: OM Group, year-over-year decline of 57%

OM Group's 2012 vote result was 23%, the lowest result recorded this season. The result represents a year over year decline in support of 57%. We looked into the circumstances at OM Group and suspect that the failed 2012 Say on Pay vote was likely the result of increases in CEO pay during a period of poor stock performance. Reported CEO total pay increased ~9% to $5m, Additionally, shareholders may have been concerned over high relative pay levels and changes to the annual incentive program. Read more

Report update: five new failures, high support continues…

To date, 934 Russell 3000 companies have had their Say on Pay votes – and over 92% are passing with above 70% support. This week, five more companies announced failures: Sterling Bancorp, Knight Capital, OM Group, Gentiva Health Services, and Charles River Laboratories. This brings the total for the season to 18. We analyze the reasons behind OM Group's 2012 vote result in our "Vote of the Week" feature. Read more

Latest company to fail Say on Pay: Knight Capital

Knight Capital received 32% approval from shareholders, making it the fifteenth company to fail Say on Pay. Knight Capital is also the fifth company in the GICS financials sector to fail SOP this year (aside Citigroup, FirstMerit, Sterling Bancorp, and Tower Group). Financial Times discussed earlier today some of the causes of opposition at Knight Capital; mainly, Knight Capital’s CEO was paid 250% more than median ‘comparable’ companies (as selected by ISS) over a period of below-median TSR performance. Read more here. Read more