Report update: 4 new companies fail since last week

Report update:  4 new companies fail since last weekDownload PDF

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.