Resource Library Shareholder Voting, SOP, and Proxy Results

Glass Lewis’ 2023 policy guideline updates include raising expectations for weighting of performance-based LTI to 50% and Board gender diversity to 30% with at least one director from an underrepresented community, along with requiring explicit disclosure of Board oversight of environmental, social, and cybersecurity issues.

ISS released new 2023 benchmark policy updates that include voting against appropriate directors at high GHG- emitting companies that do not disclose adequate emissions reduction goals and enforcement of prior voting guidance on topics including board diversity, and compensation-related ESG proposals.

Key themes for the upcoming proxy season include heightened shareholder and proxy advisor climate expectations, as well as adherence to SEC Clawback and Pay vs. Performance guidelines.

The 2022 U.S. golden parachute vote failure rate rose to 15.6% from 11.8% in 2021 as the median CEO golden parachute value increased to $12.9M from $7.9M in 2021.

Covington & Burling LLP offers considerations for companies preparing for the 2024 and 2025 reporting season, including disclosure of option award timing, company share repurchase plans, adoption, and compliance interpretations of recent SEC disclosure requirements.

Mayer Brown LLP provides an overview of key topics companies should examine when preparing 2024 proxy and annual reports including Pay vs. Performance disclosures, clawback rule compliance, updating the Section 16 officer roster and governance topics such as Say-on-Pay.

Fenwick & West LLP’s report shows that shareholder proposals related to social issues have declined amidst political opposition from 2020 (35%) in 2022 to 25% and in 2023 to 23%.

ISS released the results of their Annual Global Benchmark Policy Survey which finds that over 50% of investor respondents favored global consistency on ESG principles and 60% favored the disclosure of line-item reconciliation of non-GAAP adjustments to incentive pay metrics.

Glass Lewis recently updated their 2024 benchmark policy guidelines, which provide updated voting recommendations including requiring clear disclosure from companies on issues related to cybersecurity and strong clawback policies in accordance with new SEC regulations.

The median CEO pay package was at an all-time high in both the S&P 500 and the Russell 3000 indices, despite the fact that many companies froze or reduced base salaries in response to the pandemic.

Once again, it is time to prepare for the proxy and annual report season.