Say on Pay

Vote of the Week

Vote of the WeekZoom inCurrent Report

Our "Vote of the Week" reports discuss Say on Pay votes and results from specific companies and offers insights on what worked and what didn't.

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

Vote of the Week: Hewlett-Packard

In our “Vote of the Week,” we discuss Hewlett-Packard, which received 76% vote support in 2013, following votes of 77% in 2012 and 48% in 2011. Hewlett-Packard originally received an ‘against’ recommendation from ISS, but the recommendation was reversed following additional changes to the pay program for 2013. Read more

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

Update: Oracle fails Say on Pay with 41% support

According to an 8-K filing, Oracle is the latest company to announce failing its Say on Pay vote. Oracle received 41% support from shareholders, which represents a year-over-year decrease of 25%. Shareholder and their proxy advisors likely maintained concerns with the high absolute and relative value of CEO pay and other aspects of the company’s pay program (including use of time-based equity, perquisite programs, and CEO pledging of shares). Shareholders were also likely disappointed with the company’s modifications to the pay program following the 2011 vote. Shareholders’ reactions were not contained solely to the Say on Pay proposal. Over 34% of shareholders withheld votes related to Compensation Committee members’ reelections – and 25% of shareholders voted against an amendment to increase shares under the directors’ stock plan. Read more

Abercrombie & Fitch fails Say on Pay after receiving 56% in 2011

According to the Columbus Dispatch, Abercrombie & Fitch announced at its annual meeting today that shareholders had voted against its executive pay programs, as shareholders “expressed displeasure with the company’s recent stock tumble.” The announcement follows 56% support for Say on Pay in 2011. Abercrombie is the 11th S&P 500 and 46th Russell 3000 company to fail this season. We will be reviewing the specifics of this vote in our “Vote of the Week” feature of our weekly Say on Pay report. Shareholders seemed to have remaining concerns over the high value of the CEO’s executive pay and the CEO’s employment agreement, which entitles the CEO to biannual LTI grants of 2.5% of total shareholder return over six-month periods. Under the agreement, the CEO received two grants of SARs last year – one in March with a grant date fair value (GDFV) of $35m and another in September with a GDFV of $8m – following respective periods of six-month TSR improvement. However, since September-end, the company’s stock price has declined over 50%. 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