Resource Library Shareholder Voting, SOP, and Proxy Results

Russell 3000 equity plan proposals are facing historically low shareholder support and higher failure rates in 2023. These headwinds likely reflect both increased shareholder and proxy advisor expectations in equity plan sizing and increased share usage pressure at companies in depressed markets.

Competitive pay benchmarking, incentive goal rigor analyses, and more traditional realizable pay analyses provide a more exhaustive set of tools to calibrate and assess pay and performance.

Vote results between the two indices have diverged due to a fractured governance landscape and differentiated expectations for “good” governance at large- and small-cap companies.

This proxy season will revert toward the pre-pandemic focus on financial metrics and conventional pay-for-performance structures.

Many have long maintained that in the long run, investing in stakeholders is good for shareholders— and that stakeholders and shareholders are not an either/or proposition, but rather a both/and proposition where addressing stakeholders leads to better long-term shareholder returns.

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.

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.