Say on Pay

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The latest news, articles and reports on Say on Pay, including insights from Semler Brossy experts on trends and lessons learned from Say on Pay results.

2014 report: No new failures

We have collected Say on Pay vote results for 37 additional Russell 3000 companies, bringing our total to 165. The average vote result for all companies in 2014 is 94%. To date, only one company has failed Say on Pay: Hologic. Of companies with four years of Say on Pay votes, 95 (93%) have passed all four years while 7 (7%) have passed in three years and failed in one year. Proxy advisory firm ISS is recommending 'against' Say on Pay proposals at 5% of companies in 2014 (compared to 14% in 2013 and 2012). Read more

Vote of the Week: Apple

In our “Vote of the Week,” we discuss Apple which received 96% vote support in 2014 after receiving 61% and 83% in 2013 and 2012. The increased support is attributable to strong shareholder outreach following the low 2013 vote, addition of performance conditions to the CEO's 2011 promotion grant, and the commitment to adopt performance conditions on future executive equity awards. Read more

2014 report: One failure thus far

To date, 128 Russell 3000 companies have had their Say on Pay votes - and 97% are passing with above 70% support. Thus far, one company has failed Say on Pay (Hologic). We also capture vote results of companies that elected to have a vote every three years. At this point, no triennial companies have failed in 2014 and the average vote result of triennial companies is 97% (compared to 94% average for non-triennial companies). Proxy advisory firm ISS is recommending 'against' Say on Pay proposals at 5% of companies in 2014 (compared to 14% in 2013 and 2012). Read more

Report Update: Results for the entire proxy 2013 season; 57 companies have failed SOP

This report provides the full year of results for 2013, covering over 2,200 companies in the Russell 3000. The majority of companies continued to pass Say on Pay in 2013 with substantial shareholder support: approximately 91% of companies passed with over 70% shareholder approval. Since our last update, seven additional companies announced failures (Capstone Turbine, Corinthian Colleges, DFC Global, Fusion-io, Masmio, Oracle, and SWS Group). Total failures for 2013 stand at 57 (2.5% of Russell 3000 companies), notably the same number of Russell 3000 companies that failed in 2012. We will begin to issue Say on Pay updates for the 2014 proxy season in March 2014. Read more

LookSmart recommends “Against” and fails Say on Pay…with 0% support

LookSmart, an $11.65M online advertising company, recently became the first company to receive 0% support for Say on Pay, after its Board of Directors recommended voting “against” the Say on Pay proposal. The Board recommended against its own proposal, reasoning in the proxy that “The current directors of the Company and the current compensation committee members believe that the executive compensation and the related practices of the former directors and former executive officers were ineffective and inappropriate and that the former directors and former executive officers consistently awarded themselves excessive compensation without regard to performance or what was in the best interests of the stockholders.” All of the Company’s directors and executives were “terminated for cause, removed for cause, or ceased to hold office with the Company” in January 2013. The turnover was related to a tender offer takeover by PEEK Investments. Despite the Board’s recommendation, the Company received support from proxy advisors. Investors chose to follow the Board’s recommendation -- all 9 million+ votes were “against.” Read more

Righting the Say On Pay Ship

One of the positive outcomes of the Say on Pay provision in the Dodd-Frank legislation has been more regular dialogue between companies and shareholders. But to date, many companies have engaged with shareholders only after shockingly low votes. This article by Seymour Burchman and Blair Jones explores our recommendation - that companies should begin a dialogue with investors and proxy advisors well before pay concerns arise. This engagement can help avoid the distraction and other consequences of low Say on Pay vote results. Read more

Report update: Two more companies fail

We collected results for 81 more companies since our last report, bringing the total to 2,039 for the season. This week, we found two more companies that failed Say on Pay, bringing our total to 50 (McKesson and Helen of Troy). Year-over-year, results are roughly flat; companies that failed in 2012 have received significantly more support in 2013 (on average, +39%). Read more

Vote of the Week: McKesson

In our “Vote of the Week,” we discuss McKesson Corporation which received 22% vote support in 2013 after receiving 62% and 70% support in 2012 and 2011. The decreased support is attributable to a 30% increase in reported year over year CEO pay, continued proxy advisor and shareholder concerns over the CEO’s pension balance (valued at $159m upon voluntary termination) and duplicative performance measures in the short and long term incentive plans underscoring general concerns over the rigor of performance targets. Read more