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
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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.
Chiquita Brands is the 29th company to fail Say on Pay this season. 20% of shareholders voted in support of the company this year, versus 86% of shareholders in 2011. Elements that may have been of concern amongst shareholders include: continued negative total shareholder returns (-41% over a one-year time frame; -17% and -12% over a three-year and five-year time frame, respectively) during a period where CEO pay has increased, concern over disclosure of performance goals in its LTI plan, and CEO base salary and target annual incentive opportunities larger than for comparable companies, as noted by the Charlotte Observer. Read more
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
Hercules Offshore is the most recent company to fail Say on Pay -- the 26th of the season -- according to its 8-K filing on Friday. 48% of shareholders voted for Say on Pay. Interestingly, Hercules Offshore also failed in 2011 (with 41% support). Our initial take of the factors influencing the vote: despite significant governance-related changes made (eg, removal of tax gross ups and share recycling, modification of equity terms to institute minimum vesting requirements, adoption of an anti-hedging policy), shareholders and their proxy advisors were concerned about increased pay year-over-year, special retention and performance awards, and specific compensation elements/practices. Read more
Knight Capital received 32% approval from shareholders, making it the fifteenth company to fail Say on Pay. Knight Capital is also the fifth company in the GICS financials sector to fail SOP this year (aside Citigroup, FirstMerit, Sterling Bancorp, and Tower Group). Financial Times discussed earlier today some of the causes of opposition at Knight Capital; mainly, Knight Capital’s CEO was paid 250% more than median ‘comparable’ companies (as selected by ISS) over a period of below-median TSR performance. Read more here. Read more
34 Russell 3000 companies failed to receive at least 50% of the Say on Pay vote (8 companies in the S&P 500). Read more