Resource Library Shareholder Voting

Emerging themes from this year’s Say on Pay and proxy voting season suggests a fundamental shift in shareholder and proxy advisor perspectives on compensation.

A "First Question" starting point that explains how to understand the immediate key steps that can help turnaround a Say on Pay outcome.

In setting or adjusting executive compensation for 2020, boards employed a variety of reactions and solutions. All of these were well intended, and some look to hold up well over time. Other compensation arrangements, by contrast, will look incongruous given what we know now.

This memorandum provides an overview of the say-on-pay evaluation processes of ISS and Glass Lewis.

We have learned many things with the data from seven years of Say on Pay voting. This article outlines what we consider to be the three most important impacts of Say on Pay.

Golden parachutes became common in the hostile takeover years of the 1980s, when executives worried about losing their jobs to corporate raiders. The golden parachutes provided executives with lump sum payments, immediate vesting of equity awards and continued participation in benefits following a change in control. Media reports and debacles about failed financial service companies in the 2000s raised public ire over these arrangements. The Dodd-Frank Wall Street Reform and...

The say-on-pay vote, mandatory since 2011, has become a spring ritual for most public company comp committees. The votes typically go without a hitch. However, exceptions are notable: of Russell 3000 companies reporting results this year through mid-July, 5% have earned between 50%-70%, and only 2.5% earned less than 50%. Just 2% of all companies have failed to receive majority approval since 2013.

Why activists are concerned with executive pay and what boards and their compensation committees should be doing now to respond to these concerns.

The Semler Brossy consulting team presented on the topic of shareholder activism at a recent NACD Roundtable event on June 3, 2015, in Philadelphia. Download the presentation deck to learn more about: How different types of activists interact with companies How activists are targeting compensation in today's campaigns Dealing with activist shareholders

Our weekly Say on Pay research consistently demonstrates that vote support is, on average, meaningfully lower (28%) when Institutional Shareholder Services (ISS) recommends "against" an issuer's Say on Pay proposal. And, while ISS will conduct a thorough qualitative review before issuing an "against" recommendation, we know that ISS' three quantitative tests are used as a preliminary screen to determine the level of qualitative scrutiny applied.

Say on pay votes are a barometer of shareholder sentiment on executive compensation and performance. While the fraction of companies that fail say on pay, those that receive less than 50 percent support, is small, such feedback is a warning signal to directors that shareholders are deeply concerned and that action needs to be taken […]

Recent results on say-on-pay votes suggest that, at times when shareholders become unhappy with executive pay programs, boards are sometimes caught unaware. This lapse seems to happen for a couple of reasons: oftentimes board members don't visit shareholders themselves to hear about pay concerns.