Report Update: Failure Rate Remains at Lowest Level Since 2011 – Including our Special Topic: Revisiting an Breakdown of Proxy Access Votes

Report Update: Failure Rate Remains at Lowest Level Since 2011 – Including our Special Topic: Revisiting an Breakdown of Proxy Access VotesZoom inDownload PDF

To date, 1,864 Russell 3000 companies have held Say on Pay votes and 93% have passed with above 70% support. 31 companies (1.7%) have failed Say on Pay thus far in 2016; the two companies that have failed since the last report are PICO Holdings and TiVo. Proxy advisory firm ISS has recommended ‘Against’ Say on Pay proposals at 12% of companies it has assessed thus far in 2016. Our special topic this week features a breakdown of proxy access votes. In general, we do not find that financial factors, such as company size and TSR, have significant impact on proxy access vote results. We do observe, however, that recommendations from management and proxy advisors have a strong influence on vote outcomes. We posit that shareholders are voting on proxy access proposals on a standalone basis — not through the lens of company performance, but rather, through the specifics of each proposal and the potential impact on the company.