This week, The Conference Board released a new Director Note titled The Influence of Proxy Advisory Firm Voting Recommendations on Say-on-Pay Votes and Executive Compensation Decisions. The report examines current evidence regarding the influence of third-party proxy advisory firms’ voting recommendations on shareholder proposal voting outcomes, particularly say-on-pay votes. It also presents the findings of a study, conducted by The Conference Board, NASDAQ, and the Rock Center for Corporate Governance at Stanford University, which shows that proxy advisory firms have a substantial impact on the design of executive compensation programs. However, the impact of those firms on governance quality and shareholder value is still unknown.
For more on this topic, view this blog’s post from March 2011 titled Worth Reading … Proxy Advisory Firms’ Power. And there is still a great deal of attention on potential SEC action after Chairman Shapiro’s December 2011 remarks on the matter. There is clearly more to come on this topic.
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