Dialogue

The latest reporting, opinion and research on executive compensation. We don’t necessarily agree with it all, but we provide it here for consideration.

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Week of
August 17, 2015

Quick Picks

Preliminary 2015 Proxy Season Review | Institutional Shareholder Services | August 21, 2015

Proxy access gained momentum as a prominent issue during this year’s proxy season by appearing in over 11 percent of proposal submissions and 14 percent of shareholder resolutions on proxy ballots. This was seen in both an increase of the number of shareholder proposals and also reflected in the amount of activism through indirect channels. Shareholders are increasingly engaging directly with boards on issues traditionally handled through proxy activism, such as the repeal of classified boards, the adoption of majority voting, and the elimination of supermajority vote requirements. Hedge funds seeking board seats have taken advantage of recent successes to negotiate their way into reaching deals with besieged board directors before a proxy fight can break out. When shareholders do submit formal proposals, a plurality concern environmental and social issues; however, these issues are frequently withdrawn and settled privately. Other topics such as proxy access, chair independence, and written consent proposals most often make it to the ballot. Compensation issues took a back seat this proxy season, with average Say on Pay support levels remaining strong. Read more

Here's Why You Should Thank Congress and the SEC | Fortune | August 17, 2015

Following the recent SEC vote on the CEO Pay Ratio disclosure, companies are beginning to think about how to calculate, implement, and communicate their number for 2018. The Value Alliance and Corporate Governance Alliance CEO Eleanor Bloxham argues that a lack of financial literacy among directors and commentators may prove to be one of the main stumbling blocks. Bloxham believes this lack of financial understanding may underlie several broader issues, such as the selection of inappropriate performance measures. The author points out that the pay of the median worker at each company will be a new and interesting data point for employees and investors. She expresses hope that interest in the ratio will spark improved financial literacy. Read more

Compensation Trends + Developments

Regulation, Legislation + Governance

From Critics + Commentators