Say on Pay

Behind Say on Pay

Behind Say on PayZoom inDownload PDF

We offer insights into Say on Pay vote results, answering questions about what SOP data really means in our “Behind the Numbers” series and diving into the potential drivers of specific company vote results in our “Vote of the Week” reports.

Vote of the Week: Navistar

In our "Vote of the Week," we discuss Navistar, which received an 18% vote (the lowest we have seen) in 2013 after receiving votes of roughly 70% in 2012 and 95% in 2011. The reduced support may be attributable to concerns from shareholders and their proxy advisors on the former CEO's retirement package, which consisted of a severance payment of ~$8m and pension benefits of ~$17m, coupled with negative TSR over the most recent 1-, 3-, and 5- year period, and 'retesting' provisions on the Company's performance-based cash program. Read more

Vote of the Week: Apple

In our "Vote of the Week," we discuss Apple, which received a 61% favorable vote after receiving votes above 80% in both 2012 and 2011. The decrease in the Say on Pay vote may be attributable to criticisms from proxy advisors on large, non-performance based biennial grants to all NEOs (excluding the CEO), coupled with lack of stock holding requirements and low levels of stock ownership across the NEO team. Shareholders may have also been influenced by a 31% drop in TSR since the end of fiscal-year 2012. Read more

Behind the Numbers: Are shareholders targeting financial companies?

Our weekly Say on Pay report often raises interesting questions about what the data really mean. These questions are addressed in this series. Since the financial crisis, it seems like scrutiny of executive pay has been greater and shareholder sentiment has been more negative at financials compared to other industries. Interestingly, as of June 12, companies in the GICS Financial sector received some of the highest support of any industry. Read more

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

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

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

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