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.

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

Report update: 4 failures thus far

We collected results for 6 more companies this week, bringing our total to 169 for the season. Thus far, 93% are passing with above 70% support. One new company failed this week (Biglari Holdings), bringing the total to four for the year. Average vote results have improved by approximately 2% year over year. Read more

Vote of the Week: Biglari Holdings

In our “Vote of the Week,” we discuss Biglari Holdings, which received 33% vote support in 2013 after receiving votes of 87% in 2012 and 85% in 2011. Biglari received a decrease in support despite positive total shareholder return performance. Investors and their proxy advisors may have maintained concerns about high absolute and relative pay levels for the CEO, rigor of performance goals, and limited linkage to shareholder returns. Read more

Vote of the Week: Tyco

In our “Vote of the Week,” we discuss Tyco, which received 69% vote support in 2013 after receiving votes of 95% in 2012 and 71% in 2011. Tyco received a decrease in support despite strong total shareholder return performance and positive investor reaction to its September 2012 corporate spin-off. Investors and their proxy advisors likely maintained concerns about the value of the former CEO’s termination package. Read more

Behind the Numbers: A Reversal of Fortunes — Understanding the Factors that Drive a Significant Reduction in Support from One Year to the Next

Receiving strong support for Say on Pay in one year is certainly no guarantee for future Say on Pay success. While only a small percentage of companies see a significant reduction in support from one year to the next, the low frequency of this event belies the significant risk companies may face if they become too complacent in their approach to Say on Pay. In this article we examine the factors that drive a reversal of Say on Pay fortunes so that companies may be better prepared to address potential vulnerabilities. Read more

Report update: no new failures; ISS reverses recommendations of two companies

We collected results for 11 more companies this week, bringing our total to 154 for the season. Thus far, 94% of companies are passing with above 70% support, and no new companies failed this week. Proxy advisory firm ISS is recommending against Say on Pay proposals at 9% of companies (compared to 14% in 2012 and 12% in 2011). One new company – Kaman Corp – filed a DEFA14A in response to proxy advisors this week. Kaman Corp also had its Say on Pay recommendation reversed by ISS (from ‘against’ to ‘for’) following the Company’s decision to remove an excise tax gross-up from an executive’s recently renewed change-in-control agreement. Read more