Say on pay

With Pay-for-Performance, It's the Performance That Really Counts

April 10, 2012

New evidence is emerging that for all the complex calculations that go into tying executive pay to performance, investors view it pretty simply: If they don't like the company's performance, they'll vote against the pay package, details be damned. "Overwhelmingly, it's the criteria investors across the spectrum use to evaluate whether they'll vote for the pay plan," says Tim Smith of Walden Asset Management. More inside.
 

SEC Opens a Back Door to Shareholder Proxy Access

September 20, 2011

We all know that a federal appeals court invalidated the SEC's rule for shareholder proxy access—but the SEC slipped another, less-noticed provision into the rulebook that still gives investors an avenue to secure proxy access by shareholder proposal. "It allows for private ordering, coming up with proposals specific to a company instead of using the one-size-fits-all approach," says Michael Littenberg, a partner at law firm Schulte Roth & Zabel.
 

How to Avoid a Negative Recommendation From ISS on Say-on-Pay

August 09, 2011

Proxy advisory firms such as ISS and Glass Lewis may not have the final say on how shareholders will cast their advisory votes on executive compensation, but they sure do hold a lot of sway on how they go. Companies that want to avoid failing a say-on-pay vote may have no choice but to walk the ISS line. "They have become very powerful," says Deborah Lifshey, managing director at Pearl Meyer & Partners.
 

Companies Prepare for Executive Pay, Performance Disclosure

August 02, 2011

Per order of the Dodd-Frank Act, the SEC should soon propose rules that require companies to disclose the relationship between executive compensation and company performance. Although many companies already provide that information, some open questions remain, such as how companies should compare their performance metrics with peers. More details inside.
 

Say-on-Pay Failures; Say-on-Pay Strategies

June 14, 2011

Companies that fail to win say-on-pay votes with shareholders this year—31 of them out of thousands at last count—now face another problem: shareholders suing the directors for disregarding their will. In truth, the lawsuits probably have little merit, experts say. But they do point to how companies might better deal with unhappy shareholders. More inside.
 

Lessons From 'Say-on-Pay' Failures

June 07, 2011

Shareholders have rejected executive pay packages at dozens of companies this proxy season. Their specific motives differ with each company, but the businesses flunking say-on-pay votes share some common traits. Inside, Columnists Stephen Davis and Jon Lukomnik examine those failures and offer ideas on how to avoid losing a say-on-pay vote.
 

Shareholders Want More Transparency on Political Spending

April 19, 2011

Last year's Citizens United decision undid limits on corporate political spending. Now shareholders are demanding more disclosure on the topic, with a record number of proxy resolutions this season. "As shareholders, we just think they should be very transparent about this," says Laura Berry, executive director at the Interfaith Center on Corporate Responsibility.
 

Say-on-Pay Losses Catch HP, Others Off Guard

April 12, 2011

So far this year five companies, including Hewlett-Packard, have lost "say-on-pay" votes. From the look of proxy advisory firm recommendations, that is probably only the beginning of the trend. Companies will need to watch out this proxy season, and compliance officers need to be ready to help management over the hump. More analysis of the votes inside.
 

From Tahrir Square to the Boardroom

March 08, 2011

"Fiduciary duty" might not be the phrase that comes to mind while watching news of uprisings across the Arab world, but when you perceive the uprisings as shareholders revolting against mis-governance—well, that should resonate with board directors quite loudly. Inside, Compliance Week Columnists Stephen Davis and Jon Lukomnik outline how corporations can prevent similar revolts here at home.
 

Take Advantage of the Hiatus In Corporate Governance Changes

February 08, 2011

This year, what wasn't on the agenda at the World Economic Forum in Davos might be as important as what was. The absence of executive compensation and Wall Street regulatory reform topics may signal a period of calm in corporate governance changes. Inside, Columnists Stephen Davis and Jon Lukomnik give advice on how to take advantage of the hiatus.
 

The End of Broker Voting, One Year Later

February 01, 2011

When the SEC forced an end to "broker voting"—the practice of broker-dealer firms voting in director elections without instruction from clients—some predicted an increase in director turnover. Yet one year later the elimination of the broker vote clearly has had little influence on election outcomes, says Chuck Callan of Broadridge. Details inside.
 

Final Say-on-Pay Rules Include Delay for Small Companies

February 01, 2011

The SEC has issued its finals rules to implement shareholder advisory votes on executive pay. The release includes a two-year delay for small companies and some new provisions on frequency of the votes. "The SEC put some teeth into the advisory votes, so companies aren't free to ignore them," says Sanjay Shirodkar, of counsel at DLA Piper. Full details inside.
 

Final Say-on-Pay Rules Include Delay for Small Companies

January 25, 2011

Final rules to implement mandatory say-on-pay votes have arrived with some important changes, including a two-year delay for small companies. Two of the five commissioners voted against the rule, arguing for a permanent exemption for small companies and a delay for newly public companies. More details inside.
 

Survey Shows What's On Tap For Pay Plans In 2011

November 19, 2010

With investor advisory votes looming, executive compensation strategy and philosophy, pay-for-performance relationships and compensation-related risk are at the top of the list of pay topics companies are reviewing in 2011, according to the latest survey by compensation consulting firm Pearl Meyer & Partners.All of those items have become even more...
 

ISS Draft 2011 Proxy Voting Policies Out For Comment

October 28, 2010

Those involved in proxy voting take note: Here's your last chance to weigh in on Institutional Shareholder Services' voting policies for the upcoming proxy season.ISS has opened the annual public comment period on its 2011 draft proxy voting policies to gather input from institutional investors, corporate issuers, and others on...
 

Corp Fin Director on Dodd-Frank, Pay Rulemaking

October 26, 2010

Those interested in the governance and pay-related provisions under the Dodd-Frank Act got an update on the Securities and Exchange Commission's progress and plans for putting those rules in place, courtesy of the head of the agency's Division of Corporation Finance.With the say-on-pay rulemaking proposals now out for comment, the...
 

SEC Proposes Say-on-Pay, Proxy Vote Reporting Rules

October 19, 2010

They're here: The Securities and Exchange Commission has proposed rules requiring companies subject to the federal proxy rules to give shareholders advisory votes on executive compensation and "golden parachute" arrangements, and to require institutional investment managers to report on their votes on executive compensation and "golden parachute" arrangements.That's in line...
 

Expert Tips for Prepping for Say on Pay Votes

September 23, 2010

As compensation committees prepare for their fall meetings and the upcoming proxy season, one item that will undoubtedly be near the top of the agenda is shareholder advisory or "say on pay" votes, which will be mandatory for annual shareholder meetings in 2011, thanks to the Dodd-Frank Act.While SOP has...
 

The SEC's Busy Dodd-Frank Rulemaking Schedule

September 21, 2010

Those involved in any facet of corporate compliance, governance, and/or financial reporting now have a roadmap of sorts for what they can expect to fill up their calendar—and to submit comments on—in the coming months.The Securities and Exchange Commission has laid out a schedule of how it plans to tackle...
 

Reminder: Broker Votes Out for Say On Pay

August 17, 2010

Companies may need to revisit their proxy math: Broker discretionary votes are officially out for say-on-pay proposals.Per Section 957 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the national securities exchanges are required to amend their rules to prohibit member organizations from voting shares without specific client instructions...
 

Frank: SEC Should Urge Cos. to Reveal Top Non-Exec Pay

February 03, 2010

Amid fury over bank bonus pay, the head of the House Financial Services Committee wants the Securities and Exchange Commission to require public companies to disclose the compensation of their top-paid employees who aren't senior executives, which would essentially revive a proposal the agency panned in 2006.Under current SEC rules,...
 

Institutional Investors Push Financial Firms to Adopt SOP

February 01, 2010

A list of groups that reads like a who's who among institutional investors have joined forces to urge 17 financial firms to adopt say on pay votes this year.The group of 30 investors, which includes Walden Asset Management, California Public Employees' Retirement System, AFSCME, TIAA-CREF, and the Council of Institutional...
 

SEC Posts Final Rule on Say-on-Pay for TARP Cos.

January 13, 2010

The Securities and Exchange Commission published its final rule implementing say-on-pay for financial institutions that took government funds under the Troubled Asset Relief Program.The 23-page final rule, published Jan. 12, clarifies the requirements for U.S. registrants subject to Section 111(e) of the Emergency Economic Stabilization Act of 2008, which requires...
 

Financial Regulation Moves Ahead, With SOX Exemption

December 14, 2009

Congressional efforts to chart the future of U.S. financial services regulation continue to forge ahead with the passage by the House of Representatives of a mammoth regulatory reform bill that combines several previous proposals into a massive 1,279 page tome.The House on Dec. 11 voted 223-202 to approve the Wall...
 

RiskMetrics Unveils 2010 Policy Updates

November 25, 2009

Let the proxy season preparations begin: RiskMetrics Group has published its 2010 policy updates.Key U.S. policy updates for the upcoming season relate to poison pills, director independence, long-term pay-for-performance alignment, and management say-on-pay.Noting that executive pay is still a hot-button issue for shareholders, with new concerns raised by the crisis...
 

Survey Says Cos. Still Shrugging Off Say-on-Pay Prep

October 21, 2009

Despite ongoing efforts to require a shareholder vote on executive pay at all public companies, few companies have taken steps to prepare for Say on Pay or plan to do so in the next six months, according to a survey of compensation committee members, human resources professionals, and compensation group members.The House...
 

Carpenters' Triennial SOP Proposals Withdrawn

September 14, 2009

The United Brotherhood of Carpenters has withdrawn 18 proposals urging companies to hold triennial advisory votes on executive compensation.As originally reported by RiskMetrics Group, UBC had filed 20 proposals. Two were successfully challenged by companies at the Securities and Exchange Commission.The move follows the House of Representatives' approval on July...
 

Lockheed Latest To Announce Stockholder Survey On Pay

August 07, 2009

Lockheed Martin Corp. joined the list of companies surveying its stockholders to get feedback on executive compensation practices.A Lockheed press release says the survey results will be reviewed by the board's management development & compensation committee.The survey, which includes a link to Lockheed's 2009 proxy statement, is open to stockholders...
 

Comp Bill Passed, Poll Reveals Cos. Unprepared for SOP

July 31, 2009

The House of Representatives in a 237-185 vote approved a bill that would give shareholders of public companies annual advisory votes on executive compensation and requires regulators to set disclosure requirements and incentive-based compensation standards for financial institutions with more than $1B in assetsThe bill, H.R. 3269, the Corporate and...
 

Comp Reform Bill Passes Key House Committee

July 29, 2009

Congress's push to overhaul financial services regulation has picked up speed with passage by a key committee of a bill that would reform financial institutions' executive pay practices.The House Financial Services Committee voted 40-28 on Tuesday to approve H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act, which would,...
 

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