So far this proxy season, the SOP vote has occurred at 99 companies through February 18, 2011, of which 76 have reported the voting results in their filings. Of these 76 companies, using a simplified vote methodology where I simply count votes FOR, AGAINST and ABSTAIN and ignore any broker non-votes, two companies had SOP votes that received less than 50% votes “FOR:”

  • Jacobs Engineering (44.8% FOR, 53.7% AGAINST and 1.7% ABSTAIN – using methodology laid out above)
  • Beazer Homes (45.9% FOR, 53.8% AGAINST and 0.3% ABSTAIN)

Of the 109 companies that reported SOP vote results through February 25, 2011 the average votes were as follows (using the methodology where only votes FOR, AGAINST and ABSTAIN are counted):

  • FOR: 90.7%
  • AGAINST: 7.0%
  • ABSTAIN: 2.3%
 

In looking at the 109 companies that have reported their Say on Pay frequency vote results through February 26, 2011, it becomes apparent that companies could be taking their time deciding what to do about their frequency vote.  Only 23 companies have come out and stated what frequency for Say on Pay they have adopted going forward. Of these, the frequencies selected are as follows:

  • Annual: 15 companies
  • Biennial: 2 companies
  • Triennial: 6 companies

Perhaps more interesting though are the early stats looking at the SOP frequency adopted versus what was proposed by the company:

  • Recommended Annual & Adopted Annual: 5 companies (21.7% of companies reporting SOP frequency adopted)
  • Recommended Biennial & Adopted Biennial: 2 companies (8.7%)
  • Recommended Triennial & Adopted Triennial: 6 companies (26.1%)

So what about the other 10 companies?

  • 5 recommended Triennial but adopted Annual
  • 3 had No Recommendation but adopted Annual, and
  • 2 recommended Biennial but adopted Annual
 



The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through February 26, 2011.

Even after 46 new SOP frequency recommendations this past week, the Triennial SWOP remains the frequency recommended by a majority of the companies that have filed their proxies so far, but the percentage of companies recommending an annual SOP vote frequency continue to increase (Annual SOP frequency has increased by 4.9 percentage points over the past three weeks, going from 28.5% (week of 1/24/11) to 33.4% (last week)).  Another company came out with a biennial SOP frequency recommendation. Finally, three 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: Ameren Corporation, DirecTV, Eaton Corporation, Genuine Parts Company, KB Home, Marathon Oil Corporation, The McGraw-Hill Companies, The Progressive Corporation, TCF Financial Corporation
  • Biennial: Brocade Communications Systems, Inc.,
  • Triennial: Waddell & Reed Financial, Willis Group Holdings Public Limited Company
  • No Recommendation: United Technologies Corporation

Here are the current stats:

  • Annual: 99 (33.4%)
  • Biennial: 16 (5.4%)
  • Triennial: 166 (56.1%)
  • No recommendation: 15 (5.1%)

Total companies tracked: 296

 

SOP Votes Reported Through February 18, 2011

On February 21, 2011, in News, Say on Pay, by Ed Hauder

So far this proxy season, the SOP vote has occurred at 99 companies through February 18, 2011, of which 76 have reported the voting results in their filings. Of these 76 companies, using a simplified vote methodology where I simply count votes FOR, AGAINST and ABSTAIN and ignore any broker non-votes, two companies had SOP votes that received less than 50% votes “FOR:”

  • Jacobs Engineering (44.8% FOR, 53.7% AGAINST and 1.7% ABSTAIN – using methodology laid out above)
  • Beazer Homes (45.9% FOR, 53.8% AGAINST and 0.3% ABSTAIN)

Of the 76 companies that reported SOP vote results through February 18, 2011 the average votes were as follows (using the methodology where only votes FOR, AGAINST and ABSTAIN are counted):

  • FOR: 89.5%
  • AGAINST: 7.8%
  • ABSTAIN: 2.6%
 

In looking at the 76 companies that have reported their Say on Pay frequency vote results through February 18, 2011, it becomes apparent that companies could be taking their time deciding what to do about their frequency vote.  Only 18 companies have come out and stated what frequency for Say on Pay they have adopted going forward. Of these, the frequencies selected are as follows:

  • Annual: 12 companies
  • Biennial: 2 companies
  • Triennial: 4 companies

Perhaps more interesting though are the early stats looking at the SOP frequency adopted versus what was proposed by the company:

  • Recommended Annual & Adopted Annual: 3 companies (16.7% of companies reporting SOP frequency adopted)
  • Recommended Biennial & Adopted Biennial: 2 companies (11.1%)
  • Recommended Triennial & Adopted Triennial: 4 companies (22.2%)

So what about the other 9 companies?

  • 5 recommended Triennial but adopted Annual
  • 2 had No Recommendation but adopted Annual, and
  • 2 recommended Biennial but adopted Annual
 

The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through February 18, 2011.

Triennial SWOP remains the frequency recommended by a majority of the companies that have filed their proxies so far, the percentage of companies recommending an annual SOP vote frequency increased slightly (Annual SOP frequency has increased by 2.3 percentage points over the past three weeks, going from 28.5% (week of 1/24/11) to 30.8% (last week)). Most of the proxies filed this week again were preliminary proxies.  Another company came out with a biennial SOP frequency recommendation. Finally, no companies this past week came forward with no recommendation on SOP frequency.

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

  • Annual: The Sherwin-Williams Company, Lennar Corporation, Weyerhaeuser Company
  • Biennial: Canandaigua National Corporation
  • Triennial: McCormick & Company, Incorporated, Discover Financial Services

Here are the current stats:

  • Annual: 77 (30.8%)
  • Biennial: 15 (6.0%)
  • Triennial: 146 (58.4%)
  • No recommendation: 12 (4.8%)

Total companies tracked: 250

 

On February 11, 2011, the SEC issued some additional guidance in the form of Compliance and Disclosure Interpretations (C&DIs) on Say on Pay, Say When on Pay (SOP frequency), and Say on Golden Parachute votes:

 

Another area folks have been focusing on (but not getting quite as much attention as the frequency of the say on pay vote) if the actual say on pay votes. So far this proxy season, the SOP vote has occurred at 73 companies through February 11, 2011, of which 56 have reported the voting results in their filings. Of these 56 companies, using a simplified vote methodology where I simply count votes FOR, AGAINST and ABSTAIN and ignore any broker non-votes, two companies had SOP votes that received less than 50% votes “FOR:”

  • Jacobs Engineering (44.8% FOR, 53.7% AGAINST and 1.7% ABSTAIN – using methodology laid out above)
  • Beazer Homes (45.9% FOR, 53.8% AGAINST and 0.3% ABSTAIN)

Of the 56 companies that reported SOP vote results through February 11, 2011 the average votes were as follows (using the methodology laid out above where only votes FOR, AGAINST and ABSTAIN are counted):

  • FOR: 87.4%
  • AGAINST: 9.7%
  • ABSTAIN: 2.9%
 

In looking at the 56 companies that have reported their Say on Pay frequency vote results through February 11, 2011, it becomes apparent that companies could be taking their time deciding what to do about their frequency vote.  Only 14 companies have come out and stated what frequency for Say on Pay they have adopted going forward. Of these, the frequencies selected are as follows:

  • Annual: 10 companies
  • Biennial: 2 companies
  • Triennial: 2 companies

Perhaps more interesting though are the early stats looking at the SOP frequency adopted versus what was proposed by the company:

  • Recommended Annual & Adopted Annual: 2 companies (14.3% of companies reporting SOP frequency adopted)
  • Recommended Biennial & Adopted Biennial: 2 companies (14.3%)
  • Recommended Triennial & Adopted Triennial: 2 companies (14.3%)

So what about the other 8 companies?

  • 4 recommended Triennial but adopted Annual
  • 2 had No Recommendation but adopted Annual, and
  • 2 recommended Biennial but adopted Annual
 

The Say on Pay Frequency Tracking page has been updated to reflect proxies filed through February 11, 2011.

While Triennial SWOP remains the frequency recommended by a majority of the companies that have filed their proxies so far, the percentage of companies recommending a triennial frequency slipped again this past week, while the percentage of companies recommending an annual SOP vote frequency again increased by a full percentage point (Annual SOP frequency has increased by two percentage points over the past two weeks, going from 28.5% (week of 1/24/11) to 30.5% (last week)). Most of the proxies filed this week were preliminary proxies. Given that the larger companies that came out with recommendations this past week tended to back an annual SOP vote frequency, I think we’re witnessing a shift in attitude towards the “acceptable” frequency recommendation in the wake of the Monsanto vote and more institutional shareholders coming out in favor of an annual frequency. One company came out with a biennial SOP frequency recommendation. Finally, no companies this past week came forward with no recommendation on SOP frequency.

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

  • Annual: Earthlink, Inc. and Fortune Brands, Inc.
  • Biennial: Schlumberger Limited
  • Triennial: ABM Industries, Inc., Allergan, Inc. and Sensata Technologies Holding N.V.

Here are the current stats:

  • Annual: 71 (30.5%)
  • Biennial: 14 (6.0%)
  • Triennial: 136 (58.4%)
  • No recommendation: 12 (5.2%)

Total companies tracked: 233