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: Kilroy Realty

In our “Vote of the Week,” we discuss Kilroy Realty, which received 22% vote support in 2013 after receiving 30% support in 2012 and 49% support in 2011. Kilroy's reduction in support and third consecutive failure may be attributable to the high value of CEO pay, high target annual incentive values and discretionary nature of the program, dual performance conditions that allow for multiple opportunities to earn performance awards, and amendments to the CEO's employment agreement that increased severance payments upon termination without cause or related to a change-in-control significantly. A proxy advisor also recommended against all directors with the exception of the Chairman of the Board/ CEO. All directors recommended against by the proxy advisor failed to gain election, with an average vote result of 41%. Read more

Report update: 10 new companies below 50%

We collected results for 309 more companies this week, bringing our total to 1,384 for the season. This week, we found ten more companies that failed Say on Pay, bringing our total to 27. These companies include: Alexandria Real Estate Equities, Annaly Capital Management, Atlas Air Worldwide Holdings, Boston Properties, Dynamic Materials, Geron, Kilroy Realty, RadioShack, Strategic Hotels & Resorts, and Ultimate Software Group. Year-over-year, fewer companies are failing Say on Pay (to date, 2.0% of the sample; 2.6% of the sample failed in 2012) and receiving ISS 'against' recommendations (to date, 12% of companies; this compares with 14% of companies in 2012). Read more

Vote of the Week: Alexandria Real Estate Equities

In our “Vote of the Week,” we discuss Alexandria Real Estate Equities, which received 8.7% vote support in 2013 (the lowest we have seen) after receiving a 80% vote in 2012 (year-over-year decrease of ~71%) and 63% in 2011. This reduction in support is likely due to above-market CEO pay levels during a period of sustained low performance, a 2013 equity grant to the CEO above prior levels following a large special award in 2012 associated with renegotiating his contract, and structural changes that have not addressed underlying concerns with the pay design. Read more

Report update: seven new companies below 50%

We collected results for 257 more companies this week, bringing our total to 1,075 for the season. This week, we found seven more companies that failed Say on Pay, bringing our total to 17. These companies include: Apache Corp, Everest Re Group, Gentiva Health Services, Hecla Mining, Middleby Corp, OraSure Technologies, and Volcano Corp. Year-over-year, fewer companies are failing Say on Pay (to date, 1.6% of the sample; 2.6% of the sample failed in 2012) and receiving ISS 'against' recommendations (to date, 12% of companies; this compares with 14% of companies in 2012). Read more

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