Say on Pay

Say on Pay Reports

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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.

2013 report: Three failures thus far, Apple receives a 61% favorable vote

To date, 124 Russell 3000 companies have had their Say on Pay votes - and over 95% are passing with above 70% support. Thus far, three companies have failed Say on Pay (Nuance Communications, Digital Generation, and Navistar). Proxy advisory firm ISS is recommending against Say on Pay proposals at 11% of companies in 2013 (compared to 14% in 2012 and 12% in 2011). Read more

Report Update: Results for the entire 2012 proxy season; 57 total have failed SOP

This report provides results for the entire 2012 proxy season, covering over 2,200 companies. The majority of companies continued to pass Say on Pay in 2012 with substantial shareholder support, with approximately 91% of companies passing with over 70% shareholder approval. Four new companies announced failures since our last update (PMFG, DFC Global, Oracle, and RBC Bearings), and total failures for the season stand at 57 (2.6% of companies). We will begin to issue Say on Pay updates for the 2013 proxy season in March 2013. Read more

Report update: 53 total have failed SOP; McKesson receives 62% support, -8% vs. 2011

Since we last updated our report, two additional companies (Iconix Brand Group and Applied Micro Circuits) have failed Say on Pay. Total failures for the season now stand at 53 (or 2.6% of companies). In our “Vote of the Week,” we discuss McKesson, a company that received 62% support in 2012 after receiving 70% support in 2011. The company made many changes to its compensation programs following the 2011 vote; however it appears that shareholders continued to have concerns over the high value of CEO pay (from both a relative and absolute standpoint) and some of the company’s retirement benefits and incentive designs. This will be our final Say on Pay update for 2012. We will issue a full report providing results for the entire 2012 proxy season in January 2013. Please check back on our blog for updates in the meantime. Read more

Report update: Yahoo receives 50% support this proxy season

Total failures for the season now stand at 51 (or 2.7% versus 1% in 2011), with no new additions since our last report. We discuss Yahoo in our “Vote of the Week” – the company received 50% support (49.86% including abstentions as 'against' votes; 50.13% excluding abstentions as 'against' votes), which represents 20% less support this year. Yahoo's vote is likely attributable to continued concerns over company performance, coupled with concerns over severance payouts and changes made to compensation programs in 2011 and 2012. Read more

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