The charts below detail the level of support FOR say on pay (SOP) votes at S&P 900 companies and voting statistics regarding such support for SOP votes as of May 13, 2011:

 

As of May 13, 2011, the following eight (8) S&P 900 companies had say on pay (SOP) votes that failed to garner 50% or greater “FOR” votes (bolded names indicate new companies to the list):

  • Helix Energy Solutions Group Inc. (S&P 400)
  • Hewlett-Packard Company (S&P 500)
  • Intersil Corporation (S&P 400)
  • Jacobs Engineering Group, Inc. (S&P 500)
  • Janus Capital Group, Inc. (S&P 500)
  • MDC Holdings Inc. (S&P 400)
  • NVR Inc. (S&P 400)
  • Stanley Black & Decker, Inc. (S&P 500)
 

The chart below looks at the say on pay frequency (SWOP) recommendations made by the S&P 900 companies compared to the actual SWOP that the companies announced they would adopt as of May 13, 2011:

 

 

To try and focus the SOP and SWOP information available, we will focus on the S&P 900 companies going forward.  In that vein, below are the say on pay (SOP) frequency recommendations from the S&P 900 companies (all the S&P 500 and S&P 400 companies) as of May 13, 2011:

 

 

More SOP Failures

On May 2, 2011, in Say on Pay, Vote Results, by Ed Hauder

The following 11 12 companies have so far had their SOP proposals not be supported by their shareholders during this 2011 proxy season (May 2, 2011):

Company For Against Abstain
Ameron International Corporation 41.3% 57.7% 1.0%
Beazer Homes USA Inc. 45.9% 53.8% 0.3%
Cogent Communications Group, Inc. 39.2% 60.6% 0.2%
Hemispherx Biopharma* 43.1% 41.0% 15.8%
Hewlett-Packard 48.2% 50.7% 0.1%
Jacobs Engineering 44.8% 53.7% 1.7%
Janus Capital Group, Inc. 40.1% 55.4% 4.5%
M.D.C. Holdings, Inc. 33.5% 65.1% 1.4%
Navigant Consulting, Inc. 44.8% 53.7% 1.7%
Shuffle Master Inc. 44.5% 55.4% 0.1%
Stanley Black & Decker, Inc. 38.0% 59.1% 2.9%
Umpqua Holdings Corporation 35.0% 61.9% 3.1%
* Hemispherx Biopharma issued a press release indicating that its shareholders approved the compensation of its Named Executive Officers

 

Note: Percentages were determined by only counting votes for, against and abstentions. Broker non-votes were not included.

 

Last week, the SEC issued a Small Entity Compliance Guide to Say on Pay and Say on Golden Parachute Votes that summarizes the issues and compliance concerns for small entities. The full SEC guide can be found at:

http://www.sec.gov/rules/final/2011/33-9178-secg.htm

 

SOP Failures So Far in 2011

On April 6, 2011, in Vote Results, by Ed Hauder

The following companies have so far had their SOP proposals not be supported by their shareholders during this 2011 proxy season:

Company For Against Abstain
Jacobs Engineering 44.8% 53.7% 1.7%
Beazer Homes 45.9% 53.8% 0.3%
Shuffle Master 44.5% 55.4% 0.1%
Hewlett-Packard 48.2% 50.7% 0.1%
Hemispherx Biopharma* 43.1% 41.0% 15.8%
* Hemispherx Biopharma issued a press release indicating that its shareholders approved the compensation of its Named Executive Officers

 

Note: Percentages were determined by only counting votes for, against and abstentions. Broker non-votes were not included.

 

The Council of Institutional Investors (CII) held a series of teleconferences on institutional shareholders’ approaches to Say on Pay proposals.  The investors participating included:

  • T. Rowe Price
  • Institutional Shareholder Services (ISS)
  • United Brotherhood of Carpenters
  • Glass Lewis
  • State Street
  • Pfizer
  • Florida State Board of Administration

CII posted a summary of these teleconferences on its website.  This is available at:

http://www.cii.org/UserFiles/file/resource%20center/publications/Say-on-pay%20teleconferences%20wrap-up.pdf

 

The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through March 15, 2011.

The past week and the first two days of this week, the proxy filings really began to come in. 223 new SOP frequency recommendations were filed.

The tide has finally turned. The Triennial SWOP is no longer the frequency recommended by the most companies having filed their proxies this proxy season (45.0%). Instead, the leading frequency has now become Annual SWOP at 47.1% of all companies filing SWOP recommendations.  However, during this last week or so, six (6) more companies came forward and recommended Biennial SOP frequency. Finally, five (5) more companies came forward with no recommendation on SOP frequency.

Notable companies that filed proxies last week and indicated their preference for say on pay vote frequency:

  • Annual: Abbott Laboratories, Avon Products, Capital One Financial Corporation, Fifth Third Bancorp, General Electric Company, Honeywell International, Humana, J. C. Penney Company, Kellogg Company, Kohl’s Corporation, MetLife, Northern Trust Corporation, The Bank of New York Mellon, The Coca-Cola Company, Waste Management
  • Biennial: Avery Dennison Corporation, VF Corporation
  • Triennial: AT&T, Baxter International, Berkshire Hathaway, Express Scripts, Moody’s Corporation, Spectra Energy Corp, Stanley Black & Decker, U.S. Bancorp, United Parcel Service
  • No Recommendation: Advanced Micro Devices

Here are the current stats:

  • Annual: 281 (47.1%)
  • Biennial: 22 (3.7%)
  • Triennial: 268 (45.0%)
  • No recommendation: 25 (4.2%)

Total companies tracked: 596

 

The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through March 5, 2011.

This past week, the proxy filings began to pick up. 77 new SOP frequency recommendations were filed. The Triennial SWOP just barely remains the frequency recommended by a majority of the companies that have filed their proxies so far this season (50.7%), but the percentage of companies recommending an annual SOP vote frequency jumped again (Annual SOP frequency increased by 6.3 percentage points over the past week, going from 33.4% (week of 2/21/11) to 39.7% (last week)).  Last week no companies came out with a biennial SOP frequency recommendation. Finally, five (5) companies this past week came forward with no recommendation on SOP frequency.

Notable companies that filed proxies last week and indicated their preference for say on pay vote frequency:

  • Annual: A.O. Smith, Adobe Systems, American Express, Apache, Brink’s, Citigroup, Coca-Cola Enterprises, Comerica, Eastman Chemical,EMC, KeyCorp, McDonald’s, Olin, Pitney Bowes, Reynolds American, T. Rowe Price, Textron, Unisys, Valero Energy, Whirlpool
  • Biennial: None last week
  • Triennial: Chicago Bridge & Iron, H.B. Fuller, IDEX, OfficeMax, Sealy, Wisconsin Energy
  • No Recommendation: Baker Hughes, NYSE Euronext

Here are the current stats:

  • Annual: 148 (39.7%)
  • Biennial: 16 (4.3%)
  • Triennial: 189 (50.7%)
  • No recommendation: 20 (5.4%)

Total companies tracked: 373