Looking for more information on the 2011 Proxy Season? Want the take on things from a few “insiders?” Missed the Katten webcast, 2011 Proxy Season Update: Insiders’ Perspectives, when it originally was broadcast on December 9th? Never fear! Katten has made this webcast available on its website, http://www.kattenlaw.com/2011-proxy-season-update-insiders-perspectives-12-09-20101/.
Topics that were discussed include:
- Dodd-Frank Governance Rules Overview
- Say on Pay: Overview and How to Prepare
- ISS Policy Updates
- 2010 Proxy Season SEC Comments
If you missed the December 15, 2010 Foley & Lardner webcast that included a discussion of practical guidance on implementing say on pay, you can listen to the multimedia recording, see the presentation and associated materials by going to:
I’ve been asked quite a few times recently what companies should be doing now to prepare their proxy disclosures for their 2011 annual shareholder meetings in light of the new required Say on Pay and Say When on Pay (say on pay vote frequency) votes that will be required beginning late January 2011 as a result of the Dodd-Frank Act. Below are a few things that I think could help companies prepare their proxies for their SOP votes:
- Ensure your proxy disclosure clearly demonstrates a clear relationship between company performance and compensation paid or awarded
- Ensure your compensation plans, programs and designs clearly facilitate the achievement of your company’s strategic objectives and that this is explained in your CD&A
- Ensure your compensation disclosures in your proxy highlight the “good” or “best practices” that your company has embraced
- Ensure your compensation disclosures deal head-on with any controversial or “hot-button” pay practices and give your company’s rationale for maintaining such practices
- Look at whether your compensation disclosures could be improved by the addition of tables, charts and graphics; but, test tables, charts and graphics to ensure they tell the proper story
- Use your compensation disclosures to tell your story to shareholders, i.e., after reading your proxy disclosures it should be obvious why shareholders should support your say on pay vote
- Understand your key shareholders’ perspectives on compensation issues, including say on pay and the frequency of the say on pay vote, as well as where you might come up short
- If your company recommends a say on pay vote frequency other than annual, be prepared to engage your top shareholders and present your case for why another frequency makes sense for your company
- Watch for developments in the area of say on pay and say on pay vote frequency as more companies file proxies with these in them and institutional shareholders have more of these to review and refine their thinking on these issues—sources include www.say-on-pay.com and www.compensationstandards.com
- Keep your compensation disclosures short, simple and in plain English and test their understandability with non-technical folks to ensure shareholders will be able to understand what you are trying to tell them about your compensation plans, programs, and designs
CFO.com just posted an article looking at the say on pay vote frequency recommendations (or say when on pay or SWOP) that companies filing proxies so far have made.
Executive Comp: Say When, http://www.cfo.com/article.cfm/14545429/c_14545494
December 17, 2010
The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through end of day December 17, 2010.
Triennial SWOP remains the heavy favorite with companies that have filed their proxies so far. Here are the stats as of end of day December 17, 2010:
- Annual: 7 (20.6%)
- Biennial: 5 (14.7%)
- Triennial: 19 (55.9%)
- No recommendation: 3 (8.8%)
Total companies tracked: 34
The Say on Pay Frequency Tracking page has been updated to include links to the actual company filings with their SOP and SWOP resolutions. Just click on the company name in the chart to be taken to the filing.
Two new companies today decided to go the route of making no recommendation to shareholders about SWOP, Rock-Tenn Company and J & J Snack Foods.
Triennial SWOP still is heavily favored by the companies that have filed their proxies so far. Here are the stats as of 8:41 am Central this morning:
- Annual: 6 (22.2%)
- Biennial: 3 (11.1%)
- Triennial: 15 (55.6%)
- No recommendation: 3 (11.1%)
Total companies tracked: 27
On December 6, 2010, the law firm Foley & Lardner LLP posted a newsletter that looks at company considerations when trying to determine what Say on Pay Frequency / Say When on Pay to recommend to shareholders.
Here is a link to the newsletter which is part of Foley’s NDI News (National Director Institute News):
I am proud to announce the launch of this new blog that will focus on the latest developments on Say on Pay and Say When on Pay (Say on Pay Frequency) for public companies. We will soon have an email distribution list and will provide those that sign up a weekly digest of Say on Pay developments. Please check back for the email sign-up form to be available soon.