On December 16th, as people were preparing to shut down their computers for the holidays, we held a Governance Center webcast to review the key issues affecting 2012 Proxy Season. You can view the recording from that session below. Read the rest of this entry »
Armed with a new white paper from the Council of Institutional Investors and the recently released Institutional Sh
areholder Services’ 2011 updates for its U.S. Corporate Governance Policy, shareholders seem well-equipped to tackle a myriad of executive compensation issues in the next proxy season.
The Nov. 30 CII paper, which was written by The Corporate Library’s Senior Research Associate Paul Hodgson, Advisory Services Manager Greg Ruel and Research Associate Michelle Lamb, concludes that while executive compensation packages among Wall Street firms has improved, banks are still not tying compensation to long-term performance. The report was meant to be a comparison of Wall Street firms to other large U.S. companies. The timing of the report was meant to help shareholders make decisions about advisory votes on executive compensation plans in the first year of the so-called Say on Pay rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Read the rest of this entry »
If the current proxy season continues on the course it has set early on, public company boards and management are facing a contentious shareholder environment that wants to institute corporate governance changes, remove directors, remove anti-takeover mechanisms and wants some say on executive pay.
While the level of shareholder activism has ratcheted up due to the fallout from the financial crisis, a more shareholder-friendly SEC is not making things easier for boards and management. The shift in the investment community has led The Conference Board Governance Center to create an Expert Committee on Shareholder Activism and publish a 400-page Shareholder Activism Report and set up an online portal. Read the rest of this entry »
In what is starting to shape up as one of the busiest and corporate governance-changing proxy seasons in some time, shareholder proposals picking up the most steam early on have more to do with shareholder rights, such as .advisory vote on compensation, independent board chair, right to call special meeting and review/report on political spending.
It’s no surprise that governance shareholder proposals are getting more attention than hostile takeovers this proxy season, especially given the loss of shareholder value over the last two years.
The historic importance of this year’s proxy season has not been lost on such key shareholder players as RiskMetrics and corporate governance research providers as The Conference Board Governance Center. Both have introduced innovative products timed to launch with the 2010 proxy season. RiskMetrics has replaced its Corporate Governance Quotient rating system with Governance Risk Indicators, a transparent governance rating methodology designed to reflect current best practices. It uses symbols such as up and down color-coordinated arrows instead of numeric ratings. It went into effect March 17. Read the rest of this entry »
Now that all the excitement about health care reform in has begun to dissipate in Washington, D.C., the focus is back on financial regulatory reform. Or so it seems.
According to the latest comments [Read The Hill blog’s coverage.] coming out of Senate Banking Committee Republican Ranking Member Richard Shelby’s (R-Alabama) camp on Friday, there’s a chance for a bill to clear the full Senate before Memorial Day. This follows the news that two fellow Republicans on that same committee – Bob Corker of Kentucky and Judd Gregg of New Hampshire – announced Monday that the Democratic bill could receive strong bipartisan support in the Senate.
And then there were Treasury Secretary Timothy Geithner’s comments [Read here.] on Monday to the American Enterprise Institute on Financial Reform. They are as eye-opening and harsh as his predecessor, Henry Paulson, in the fall of 2008 when he revealed just how deep the financial crisis was. Read the rest of this entry »
Executive compensation continues to be a hot topic in the board room and among shareholders. In the beginning of the 2010 proxy season RiskMetrics reports that four of the Top 10 governance shareholder proposals are compensation-related with advisory vote on compensation, or Say on Pay, ranked first with 46 proposals on the ballot.
The other three compensation proposals include having a retention period for stock awards (13 proposals), establishing anti-gross-ups policy (six proposals) and limiting the number of CEOs on compensation committees (three proposals). [By the way No. 2 on RiskMetrics list is shareholders’ right to call special meetings with 42 proposals.]
While Say on Pay has been considered by the SEC and included in several financial regulatory reform bills on Capitol Hill, momentum for advisory votes on compensation has picked up steam in the past year following the requirement for TARP (Troubled Asset Relief Program) recipients to hold such a vote. As of March 2, a coalition of investors reports that more than 70 Say on Pay shareholder proposals have been filed for this proxy season. And more than 50 public companies have voluntarily adopted advisory votes for compensation. Read the rest of this entry »
With the 2010 proxy season upon us, there are already signs that risk disclosure will remain high on the priority list for boards in light of new enhanced SEC proxy disclosure rules and shareholder pressure.
In light of the recent financial crisis, the enhanced disclosure rules, which went into effect Feb. 28, [See past blog post, SEC Wants More Concise Disclosure That is Material, Dec. 18] have a heavy emphasis on risk management and oversight. Also, an Oct. 27, SEC Staff Legal Bulletin (No. 14E-CF) stresses how the regulator will not so easily allow no-action requests from companies receiving risk-related shareholder proposals. One of those risks out in front this proxy season is climate change. (See below, “Investors File a Record 95 Global Warming Resolutions: a 40% Increase Over 2009 Proxy Season”) Read the rest of this entry »
Corporate Governance News
