In its most recent action dealing with the controversial topic of executive pay, on Wednesday, April 29, 2015, the Securities and Exchange Commission (SEC) voted 3 – 2 to approve proposed rules regarding pay-for-performance in the wake of the Dodd-Frank Act. The proposed rule is intended to require companies to show, typically in their annual … Continue Reading
The Institutional Shareholder Services (“ISS”) released updates to its guidelines that govern its shareholder recommendations on a number of corporate governance matters. Significantly, ISS has adopted a new scorecard for evaluating whether ISS will recommend approving a company’s compensation plan. The Equity Plan Scorecard, or EPSC, considers a range of factors that fall into three … Continue Reading
Glass Lewis recently released updates to its policies that govern recommendations to shareholders on a number of corporate governance matters. As relates specifically to compensation, such updates include: In assessing pay-for-performance, compensation plans that otherwise receive an unsatisfactory rating from Glass Lewis’ qualitative evaluation model may nevertheless receive a recommendation of approval from Glass Lewis … Continue Reading
Earlier this year, Institutional Shareholder Services Inc. released its Governance QuickScore 2.0 data verification portal (see our March Post). It has recently announced the launch of another portal giving all U.S. public companies that have an equity-based compensation plan listed on their proxy ballot for shareholder approval the opportunity to verify the data regarding such … Continue Reading
When significant decisions for public corporations are up for shareholder vote, institutional investors and shareholders or their registered investment advisors (meaning an individual or firm registered with the Securities and Exchange Commission (“SEC”) that is in the business of giving advice about securities in exchange for compensation (“RIAs”)) often rely on the voting recommendations of … Continue Reading
Earlier this month, Squire Sanders hosted a roundtable discussion, “The Activist Shareholder,” during its 2014 Roundtable for General Counsel in the Chemical and Performance Materials Industries, a two-day executive event held in Washington, DC. The panel addressed the significant increase in shareholder activism in recent years, and among other topics, it addressed the need for … Continue Reading
On February 18, 2014, Institutional Shareholder Services (ISS) launched an updated and enhanced version of its governance and risk assessment tool for Russell 3000 companies – “ISS Governance QuickScore 2.0” (QS 2.0). Some of its new features include a new monitoring system that will be event-driven, whereby ISS will track certain regulatory filings (eg the … Continue Reading
Ahead of SEC Rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the topic of amending clawback policies is a sensitive one for companies and boards. At some point we know that rules will be enacted, but companies and boards struggle with what (if anything) to do in advance. The clawback aspects … Continue Reading
NASDAQ has filed amendments to its rules on compensation committee composition. In a welcome move, the revised rules are closer to the more flexible rules adopted by the New York Stock Exchange. The changes come into effect immediately so NASDAQ companies that have already changed their compensation committee charter to comply with the changes NASDAQ … Continue Reading
On November 24, 2013, Swiss voters soundly voted down (65.3% to 34.7%), a proposal to limit the pay of companies’ highest paid managers to 12x that of their lowest paid rank-and-file workers, known as the “1:12 Initiative”. The 1:12 Initiative was raised by Switzerland’s Young Socialists, who succeeded in collecting 100,000 signatures to put the 1:12 … Continue Reading
On October 31, 2013, shareholders of Oracle Corp. voted “no” to CEO and founder Larry Ellison’s pay package worth $78.4 million (which is actually down 18 percent from the $96.2 million package he received a year earlier for which he also received a “no” vote by Oracle shareholders) (see Oracle Form 8-K filing). Approximately 56.3 percent of … Continue Reading
Executive compensation in the US is the highest in the world in both absolute terms and relative to median salary in the US (who can forget the widely publicized news report that J.C. Penney CEO Ron Johnson received a compensation package worth 1,795 times the average salary of a US department store worker?). Other countries, … Continue Reading
