Say on Pay

Say on Pay Reports

Say on Pay ReportsZoom inCurrent Report

Our weekly "Say on Pay Reports" provide comprehensive coverage of vote results. Find out how companies in the Russell 3000 fared on Say on Pay votes.

Report update: 51 total have failed SOP; Freeport McMoRan receives +22% support vs.2011

Total failures for the season now stand at 51 (or 2.7% versus 1% in 2011), with two new additions since last week (Best Buy and Kforce). We discuss Freeport McMoRan in our “Vote of the Week” – the company received 22% more vote support this year, following 46% support in 2011. The year over year increase in vote results is likely due to significant program changes. The company made modifications to its AIP program, reduced total compensation by 40% (as reported in the company's supplemental table), and made governance-related changes. Nonetheless, the company still received an ‘against’ recommendation from ISS given high absolute reported pay levels coupled with negative one?year TSR and other ongoing concerns. Read more

Report update: 4 new companies fail since last week

With over 1,800 results collected, total failures for the season now stand at 49 (or 2.7% versus 1% in 2011). Four new companies announced failures this week: Abercrombie & Fitch, Cedar Realty Trust, Masimo Corp, and Sequenom Inc. We discuss Abercrombie & Fitch in more detail in our “Vote of the Week” – the Company received 25% vote support this year, following 56% support in 2011. The failed 2012 Say on Pay vote was likely the result of high absolute CEO pay levels and a year-over-year increase in reported CEO pay, coupled with continued proxy advisor and shareholder concerns over the CEO’s employment agreement and other pay elements. Despite high pay as reported in the proxy, the program is effectively set up with two hurdles to create any realizable value for the CEO. In total, there have been 106 responses to Say on Pay recommendations from proxy advisors; however, responses have slowed down, with only one new response filed this week (Marvell Technology Group Ltd). Of these responses, the majority focus on pay and performance relation, as well as other topics and peer group comparators. Read more

Report update: 45 failures…and what happened at Nabors/Chesapeake?

With over 1,700 results collected, total failures for the season now stand at 45. Five new companies announced failures this week: Nabors Industries, American Eagle Outfitters, Chesapeake Energy, Epiq Systems, and G-III Apparel. We discuss Nabors Industries and Chesapeake Energy in more detail in our “Vote of the Week” – both companies received significant opposition in both 2011 and 2012. At both companies, it appears shareholders maintained concerns over the pay programs' alignment with performance as well as broader governance practices. A majority of shareholder votes at both companies were cast against new bonus programs and cast in favor of proxy access proposals. At the industry level, health care companies in aggregate have received less support than other industries (5% of companies have failed, while 12% have received vote results below 70%). Consumer staples and financials have received the most support, with only 4% of consumer staple companies and 6% of financial companies receiving vote results below 70%, as compared to the Russell 3000 average of 8.6%. Read more

Report update: total failed votes at 40; three co’s have failed in 2011 and 2012

To date, 40 companies have failed Say on Pay - roughly 2.5% of companies, compared to 1.4% in 2011. This week, Tutor Perini became the third company to fail in both 2011 and 2012. This week’s Vote of the Week discusses Safety Insurance, the first company we are aware of to receive an ISS ‘for’ recommendation and fail Say on Pay. New additions to the list of failed companies since our report last Wednesday: Tutor Perini, Healthways Inc., United Online, and Digital River. 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

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

Report update: five new failures, high support continues…

To date, 934 Russell 3000 companies have had their Say on Pay votes – and over 92% are passing with above 70% support. This week, five more companies announced failures: Sterling Bancorp, Knight Capital, OM Group, Gentiva Health Services, and Charles River Laboratories. This brings the total for the season to 18. We analyze the reasons behind OM Group's 2012 vote result in our "Vote of the Week" feature. Read more

Report update: Total ‘failures’ at 13…

To date, 677 Russell 3000 companies have had SOP votes – and over 92% are passing with above 70% support. This week, five more companies announced failures, bringing the total to 13: Mylan, Comstock Resources, Tower Group, Cenveo, and Manitowoc Company. Read more