Tag Archives: Shareholders

Resisting Homogenization of the Executive Pay Program – Update Motivating the executive team while satisfying shareholders and achieving successful Say on Pay votes

In today’s environment, with annual Say on Pay (SOP) votes, intense external scrutiny and the need to strongly align pay with performance, it is increasingly important for companies to be confident in their executive pay program. The foundation of a sound executive pay program is built on the company’s business strategy and talent needs, which, collectively, must be achieved in order to create shareholder value. Continue reading

CEO Pay Well Aligned with Company Performance

The number of methods for defining “CEO pay” when analyzing executive compensation continues to grow. From total pay suggested by the summary compensation table to the definitions used by Glass Lewis or Institutional Shareholder Services (ISS) in their proxy review reports, there is no universal standard for measuring pay, especially in comparison to performance. Continue reading

Shareholders Defeat Mandatory Deferral Proposal

Many large U.S. based multinational banking and financial services corporations have implemented executive compensation clawback policies that require the cancellation and forfeiture of unvested deferred cash awards or performance share unit awards. These policies typically condition the cancellation of deferred compensation if it is determined that an executive engaged in misconduct, including failure to supervise or monitor individuals engaging in inappropriate behaviors that caused harm to the organization’s operations. Continue reading

Activism of a Different Nature: Social Investors Advocate for Change in the Proxy

Sustainable investing – defined as an investment approach that considers environmental, social, and governance (ESG) factors in the selection and management of investments – has seen significant growth in assets under management in the past several years. In the United States, an estimated 11% of total assets under management are now invested based on sustainable investment strategies. Similarly, shareholder proposals relating to environmental or social issues represented one-third of all shareholder proposals in 2014, representing an increase of nearly 40% since 2009. Some proposals are receiving shareholder support at or above 30%, generally driven by “for” vote recommendations from ISS. We find that ISS favors proposals that seek additional environmental or social reporting versus proposals that seek operational changes or restrictions. This finding contrasts with ISS’s say-on-pay vote recommendation policies, which often seek changes to executive compensation designs. Continue reading

The Impact of ISS “Qualitative” Factors on ISS “FOR” and “AGAINST” Recommendations and Say on Pay Votes

Say on pay (SOP) vote results continue to indicate that shareholders seem to be endorsing the executive pay model. Continue reading

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