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: MDC Holdings support up 38% from 2011

MDC Holdings’ Say on Pay vote result increased 38%, from 34% to 72%, after failing in 2011. MDC Holdings made significant adjustments to its incentive programs and reduced CEO pay following its failed vote in 2011; however, proxy advisors expressed concern over some legacy pay elements. Read more

Report update: 34 votes ‘against’ pay

Now well into the proxy season with 1,400+ Russell 3000 companies having reported Say on Pay voting results, nearly three-fourths of companies are passing with strong support (above 90%). To date, 34 companies have failed Say on Pay - roughly 2.4% of companies, compared to 1.4% in 2011. This week, Kilroy Realty became the second company to fail in both 2011 and 2012. This week’s Vote of the Week discusses MDC Holdings, a company that failed in 2011 but made significant changes to its program and garnered 38% more support in 2012 from shareholders. Five other companies have failed since our report last Wednesday: Chiquita Brands, Rigel Pharmaceuticals, Big Lots, NuVasive, and VCA Antech. Read more

Behind the Numbers: Does a low Say on Pay vote lead to low Director votes?

Our weekly Say on Pay report often raises interesting questions about what the data really mean. These questions are addressed in this series. A question our clients often ask us is whether they should be worried that a low Say on Pay vote will result in low director votes. We found that companies with a low Say on Pay vote had slightly lower average director votes. However, average director votes remain close to 90%, even for companies that failed Say on Pay. Read more

Chiquita Brands: 29th company to fail Say on Pay

Chiquita Brands is the 29th company to fail Say on Pay this season. 20% of shareholders voted in support of the company this year, versus 86% of shareholders in 2011. Elements that may have been of concern amongst shareholders include: continued negative total shareholder returns (-41% over a one-year time frame; -17% and -12% over a three-year and five-year time frame, respectively) during a period where CEO pay has increased, concern over disclosure of performance goals in its LTI plan, and CEO base salary and target annual incentive opportunities larger than for comparable companies, as noted by the Charlotte Observer. Read more

Report update: votes ‘against’ pay total 28; results by industry

Now 11 weeks into our Say on Pay research and with 1200+ companies having reported, we've identified 28 total companies that have failed Say on Pay -- 10 more than last week. The additions are: Pitney Bowes, Hercules Offshore, Viad Corp, Community Health Systems, Phoenix Companies, CryoLife, Infinera Corporation, Palomar Medical, Simon Property Group, and Chemed Corporation. As we noted earlier this week, Hercules Offshore became the first company to fail Say on Pay in both 2011 and 2012. We delve into the context at Hercules in our 'Vote of the Week' (p. 3). This week, our report contains a new feature: Vote Results by GICS Sector (p. 5). Our early takeaway is that health care companies have received a disproportionate share of shareholder and proxy advisory opposition. Also notable...all companies in the consumer staples sector have passed Say on Pay. Only one company of 45 in the sector has received under 70% support. Read more

Vote of the Week: Hercules Offshore, first company to fail in 2011 and 2012

Hercules Offshore is the first company to fail Say on Pay in both 2011 and 2012, with 41% approval last year and 48% this year. We looked into the circumstances at Hercules Offshore and suspect that the failed 2012 Say on Pay vote was likely the result of increased pay year over year due to special retention awards coupled with proxy advisor concerns with several aspects of the program. Read more

Hercules Offshore: first company to fail SOP in both 2011 and 2012

Hercules Offshore is the most recent company to fail Say on Pay -- the 26th of the season -- according to its 8-K filing on Friday. 48% of shareholders voted for Say on Pay. Interestingly, Hercules Offshore also failed in 2011 (with 41% support). Our initial take of the factors influencing the vote: despite significant governance-related changes made (eg, removal of tax gross ups and share recycling, modification of equity terms to institute minimum vesting requirements, adoption of an anti-hedging policy), shareholders and their proxy advisors were concerned about increased pay year-over-year, special retention and performance awards, and specific compensation elements/practices. Read more

Behind the Numbers: What to expect with a supplemental filing

Our weekly Say on Pay report often raises interesting questions about what the data really mean. These questions are addressed in this series. Through May 15, 2012, at least 77 companies have filed supplemental proxy material specifically targeted at the Say on Pay vote, compared to 45 companies through the same period last year. Interestingly, our database shows that companies that make supplemental filings have experienced slightly lower Say on Pay votes than companies that do not file them, and that ISS recommendations are rarely reversed after a supplemental filing. Read more