Say on Pay

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Get comprehensive results in "Say on Pay Reports," in-depth analysis on Say on Pay results in our "Behind the Numbers" series, and insights on how companies are faring in "Vote of the Week."

Report update: Results for the entire 2014 proxy season; 60 companies have failed SOP

This report provides the full year of 2014 Say on Pay vote results, covering more than 2,500 Russell 3000 companies that held votes in calendar year 2014. The majority of companies continued to pass Say on Pay with substantial shareholder support: approximately 92% of companies passed with over 70% shareholder approval. 60 Companies (2.4%) failed Say on Pay. Five companies failed since our last report update: Celadon Group, Cheniere Energy, Energy XXI, Globe Specialty Metals, and Oracle. We will begin to issue Say on Pay updates for the 2015 proxy season in March 2015. Read more

Vote of the Week: Energy XXI

Our “Vote of the Week” features Energy XXI. A company with triennial Say on Pay votes, Energy XXI received 26% support in 2014 after receiving 90% support in 2011. The decreased support is likely due to increasing CEO pay opportunity and Committee determination of above-target annual incentive payouts during a period of mixed financial and market results, as well as above-median benchmarking practices and grants of long-term incentive and retention awards that are not rigorously performance-based. Read more

Behind the Numbers: What Can a Smaller Company do to Protect its Say on Pay Vote and Have Larger Vote Improvement?

In last year’s Behind the Numbers post titled “Are the Companies Failing Say on Pay in 2013 Smaller than Prior Years?”, we investigated whether companies that failed Say on Pay with less than 50% vote support were smaller than in prior years. We found that companies with revenue below $500MM were in fact failing at a higher rate. In this post, we further the analyses done last year to understand whether this observation holds true in 2014. Read more

Report update: two additional companies with support below 50%

We have collected Say on Pay vote results for 125 additional Russell 3000 companies, bringing our total to 2,332. The average vote result for all companies in 2014 is 91%. Two additional companies failed since last week’s report; 55 companies (2.4%) have failed so far this year. Of companies with four years of Say on Pay votes, 1,601 (92.2%) have passed all four years, 113 (6.5%) have passed in three years and failed in one year, 18 companies (1.0%) have passed in two years and failed in two years, three companies (0.2%) have passed in one year and failed in three years, and two companies (0.1%) have failed all four years. Proxy advisory firm ISS is recommending ‘against’ Say on Pay proposals at 13% of companies in 2014. Read more

Vote of the Week: Electronic Arts

Our “Vote of the Week” features Electronic Arts. Electronic Arts (EA) received 55% vote support in 2014 after receiving 93% support in 2013. The decreased support is likely due to a promotional $8.6MM stock option award granted to the CEO, adoption of a re-testing provision for annual PRSU grants, a decrease in the proportion of future equity grants subject to performance-based vesting conditions from 50% to 25%, and targeting the 75th percentile of peers when determining the value of annual equity grants. Read more

Report update: five additional companies with support below 50%

We have collected Say on Pay vote results for 84 additional Russell 3000 companies, bringing our total to 2,207. The average vote result for all companies in 2014 is 91%. Five additional companies failed since last week’s report; 53 companies (2.4%) have failed so far this year. Of companies with four years of Say on Pay votes, 1,511 (92.0%) have passed all four years, 109 (6.6%) have passed in three years and failed in one year, 17 companies (1.0%) have passed in two years and failed in two years, three companies (0.2%) have passed in one year and failed in three years, and two companies (0.1%) have failed all four years. Proxy advisory firm ISS is recommending ‘against’ Say on Pay proposals at 13% of companies in 2014. Read more

Votes of the Week: Guess? and Aéropostale

Our “Vote of the Week” features Guess? and Aéropostale. The two companies each failed in 2014 with Guess?, a triennial Say on Pay company, receiving 34% support in 2014 after receiving 68% support in 2011, and Aéropostale receiving 36% support in 2014 after receiving 99% support in 2013. Both companies recently entered into new employment agreements with their respective CEOs which provide for large equity awards despite negative long-term shareholder returns. These commonalities in pay and performance likely led to similar vote outcomes. Read more

Report update: one additional company with support below 50%

We have collected Say on Pay vote results for 97 additional Russell 3000 companies, bringing our total to 2,123. The average vote result for all companies in 2014 is 91%. One additional company failed since last week’s report; 48 companies (2.3%) have failed so far this year. Of companies with four years of Say on Pay votes, 1,462 (92.1%) have passed all four years, 105 (6.6%) have passed in three years and failed in one year, 15 companies (0.9%) have passed in two years and failed in two years, three companies (0.2%) have passed in one year and failed in three years, and two companies (0.1%) have failed all four years. Proxy advisory firm ISS is recommending ‘against’ Say on Pay proposals at 13% of companies in 2014. Read more

Vote of the Week: Abercrombie & Fitch

Our “Vote of the Week” features Abercrombie & Fitch. Abercrombie received 96% vote support in 2014 after receiving 20% in 2013. Despite stock price underperformance, the increased vote support is likely due to a new employment agreement with CEO Michael Jeffries, a redesign of annual and long-term incentive plans, and increased use of performance-based equity with multi-year performance conditions. Read more

Report update: five new companies with support below 50%

We have collected Say on Pay vote results for 146 additional Russell 3000 companies, bringing our total to 2,026. The average vote result for all companies in 2014 is 91%. Five additional companies failed since last week’s report; 47 companies (2.3%) have failed so far this year. Read more