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."

Vote of the Week: Prudential Financial

In our “Vote of the Week,” we discuss Prudential Financial, which received 78% vote support in 2013 after receiving a 96% vote in 2012 (year-over-year decrease of 18%). Proxy advisors cited positive factors including a limited CEO pay increase of 3% year-over-year and a mandatory deferral of a portion of both short-term and long-term incentives. Despite a few noted positive changes, the lower support in 2013 may be due to: pay and performance disconnect (per proxy advisors), discretionary aspect included in the annual bonus plan, and relatively high bonus targets and opportunities. Read more

Report update: four new companies with support below 50%

We collected results for 278 more companies this week, bringing our total to 818 for the season. We continue to see high support, with 94% of companies passing with over 70% shareholder approval (this is slightly higher than in 2011 and 2012). Year-over-year, we observe that fewer companies are failing Say on Pay (to date, ten companies this year, or 1.2% of the sample; 2.6% of the sample failed in 2012) and receiving ISS 'against' recommendations (to date, 11% of companies; this compares with 14% of companies in 2012). Four new companies failed this week: AXIS Capital Holdings, Comstock Resources, Golden Star Resources, and Stillwater Mining. Read more

Vote of the Week: Comstock Resources

In our “Vote of the Week,” we discuss Comstock Resources, which received 33% vote support in 2013 after receiving a 35% vote in 2012. Sustained low support may be due to concerns over annual cash bonuses that are determined by 50% financial performance and 50% discretion (we note that the discretionary piece of the annual cash bonus was paid above target, while the formulaic component was paid below target), benchmarking of CEO pay above median against a peer group of larger companies, and above-median CEO pay despite negative TSR on a one-, three-, and five-year basis. Read more

Report update: Occidental Petroleum receives 63% after consecutive years at 90%+

We collected results for 191 more companies this week, bringing our total to 549 for the season. We continue to see high support, with 93% of companies passing with over 70% shareholder approval (this is identical to 2011 - and slightly higher than in 2012). Year-over-year, we observe that fewer companies are failing Say on Pay (to date, six companies this year, or 1.1% of the sample; 2.6% of the sample failed in 2012) and receiving ISS 'against' recommendations (to date, 10% of companies; this compares with 14% of companies in 2012). In our “Vote of the Week,” we discuss Occidental Petroleum, which received 63% vote support in 2013 after receiving votes above 90% in both 2012 and 2011. The decline in support may have been driven by the value of CEO and Executive Chairman pay packages, discretionary nature of annual incentive program, problematic pay practices, and governance issues related to succession planning and the Executive Chairman's tenure (76% of shareholders voted against reelecting the Executive Chairman). Occidental announced several governance and compensation program changes after the proxy filing, which led to a subsequent proxy advisor recommendation reversal and may have elevated support for Say on Pay above 50%. Read more

Report update: Coca Cola receives 77% support after receiving votes above 90% in both 2012 and 2011

We collected results for 121 more companies this week, bringing our total to 349 for the season. Thus far, 94% are passing with above 70% support -- and six companies have failed thus far (with one new addition from last week - Dendreon Corp). We continue to notice similar trends year over year, with average vote results improving approximately 1%. As with last week, we have noticed that ISS is recommending 'against' fewer companies this year (10% of companies, as compared with 14% in 2012 and 12% in 2011). In our “Vote of the Week,” we discuss Coca Cola, which received 77% vote support in 2013 after receiving votes above 90% in both 2012 and 2011. The decrease in vote support is likely driven by a change in proxy advisor support due to below median TSR performance relative to industry and the S&P 500, high relative CEO pay, and annual bonus payouts above target for four consecutive years. Read more

Report update: Cogent Communications fails after receiving vote of 68% in 2012 and 39% in 2011

We collected results for 46 more companies this week, bringing our total to 228 for the season. Thus far, 94% are passing with above 70% support -- and five companies have failed thus far. Average vote results have improved by approximately 2% year over year. Five companies that failed in 2012 have received significantly more support in 2013 (average of +47%). We have noticed that ISS has recommended 'against' fewer companies this year (10% of companies, as compared with 14% in 2012 and 12% in 2011). In our “Vote of the Week,” we discuss Cogent Communications, which received 39% vote support in 2013 after receiving a vote below 70% in 2012 and failing in 2011. The failure this year may be attributable to: a mega grant of time based equity made to the CEO, lack of performance criteria, limited engagement with shareholders following consecutive votes under 70%, and underlying problematic pay practices. Read more

Report update: 182 companies in

We collected results for 13 more companies this week, bringing our total to 182 for the season. Thus far, 93% are passing with above 70% support -- and four companies have failed thus far. Average vote results have improved by approximately 3% year over year. Five companies that failed in 2012 have received significantly more support in 2013 (average of +47%). We have noticed that ISS has recommended 'against' fewer companies this year (9% of companies, as compared with 14% in 2012 and 12% in 2011). Read more

Vote of the Week: Kforce

In our “Vote of the Week,” we discuss Kforce, which received 98% vote support in 2013 after receiving votes of 39% in 2012. Following the 2012 outcome, Kforce engaged with major investors (covering 60% of stock outstanding), as well as proxy advisors, to discuss its program and potential modifications. Kforce made significant changes to its programs: it reduced CEO pay levels, modified its go-forward pay framework to address prior concerns with its annual incentive program and long-term incentive pool allocation, and improved governance practices by instituting a clawback and anti-hedging policy and enhancing share ownership guidelines. Read more