June 20, 2021 Executive Compensation Shareholder Voting, SOP, and Proxy Results First Question

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Shareholder Voting, SOP, and Proxy Results

How do you respond to a low Say on Pay vote? Turn Around the Outcome

Learn how to turnaround a low Say on Pay vote outcome. Use our checklist which includes suggestions on how to best respond to your shareholders and move your company in the right direction:


Understand the immediate key steps that can help turnaround a Say on Pay outcome.


  • Engage with shareholders to understand their perspectives
  • Consider how/where to incorporate feedback
  • Provide detailed disclosure on engagement process and company’s response


  • Significant performance challenges can lead to multiple years of Say on Pay outcomes if not demonstrating responsiveness
  • Turning around a vote often requires conducting shareholder outreach and meaningful changes to the executive pay programs and may skew towards satisfying proxy advisor or larger institutional investor preferences
  • To conduct shareholder outreach, companies often have to form new relationships with individuals voting on Say on Pay outcomes from the governance side (vs. the investment side)
  • Effective shareholder outreach often requires Director involvement, and includes active listening as well as discussion
  • When developing engagement materials, work with counsel to ensure in compliance with disclosure implications of non-public information

Initial Checklist

  1. As a starting point, determine if there any ‘low hanging fruit’ can be implemented without much change to existing programs
  2. Determine the right participants, which typically includes the Company’s HR/Legal team, as well as representatives from the Board
  3. Determine outreach strategy (i.e., how many shareholders, which types of shareholders) to receive well-rounded perspectives and hear from those who voted against the pay program
  4. Prepare for discussions with shareholders by developing talking points/FAQs and summarizing key elements of the program that received meaningful criticism
  5. Identify roles for calls and use practice dry runs to better understand the content and the give and take between different participants on the call
  6. Company and Committee should review a list of potential modifications and identify which ones to make, and which ones to keep the same, in the context of the compensation philosophy and business circumstances
  7. Start the proxy disclosure drafting process early and include disclosures that demonstrate responsiveness and highlight improvements in the pay programs

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