I recently provided insight for an article published in Compliance Week on the SEC’s pay ratio rule, which will require companies to disclose for the first time in their 2018 proxy statements the ratio between the median annual total compensation of all employees and the annual total compensation of its CEO. While the rule has brought some opposition, companies should still keep an eye out for developments in Washington and the SEC, but should not have unrealistic expectations. As I point out in the article, “given all the dynamics and the make-up of the Commission still evolving, companies should proceed with things the way they are now, with the rule in effect.” While there may be possibilities for some type of alleviation, companies should not rely on that to avoid delaying any adjustments needed to be made in preparation.

Continue Reading SEC’s Controversial Pay Ratio Rule Still Alive and Problematic

ISS and Glass Lewis recently updated their proxy voting guidelines in advance of the 2017 proxy season. The updates to the ISS guidelines will be effective for meetings beginning in February 1, 2017, and the updates to the Glass Lewis guidelines will be effective for meetings beginning in January 1, 2017.

Unlike in certain past years, the revisions to the proxy voting guidelines of ISS and Glass Lewis will not significantly impact the public company corporate governance landscape or impact most public companies.  The changes made to the ISS guidelines include:

  • tightening the overboarding policy of ISS (by lowering the number of public company board positions it considers acceptable for non-CEO directors from six to five),
  • certain technical revisions to ISS guidelines with respect to proposals to amend or approve equity-based compensation plans, and
  • updating the policies of ISS with respect to proposals to address non-employee director compensation.

Continue Reading ISS and Glass Lewis: Proxy Season Preparation

Recently, a shareholder was the first to attempt to use proxy access bylaws to nominate a director. The shareholder was GAMCO Asset Management, and the company involved was National Fuel Gas Company (NFG).

NFG amended its bylaws in March 2016 to include a proxy access bylaw and its terms are pretty typical:  the bylaws provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding Common Stock continuously for at least three years may nominate and include in the company’s proxy materials directors constituting up to 20% of the board, provided that the shareholders(s) and the nominee(s) satisfy the bylaw requirements. Here is NFG’s proxy access bylaw.

Continue Reading Proxy Access Developments

I authored an article published by Law360 on the growing trend in support for proxy access among shareholders. In the article, I weigh the pros and cons of adopting proxy access for a public company and concludes “on balance, we believe that many public companies that have not yet adopted proxy access or received a proxy access shareholder proposal, particularly those in the mid-cap and small-cap sectors, will deem it advisable to defer adopting proxy access bylaws at this time.”

The full article, “Should Public Cos. Voluntarily Adopt Proxy Access?” was published by Law360 on September 13, 2016, and is available online.