The Shareholder ForumTM

Electronic Participation in Shareholder Meetings

Forum Home Page [see Broadridge note below]

"E-Meetings" Home Page

"E-Meetings" Program Reference


For a copy of the report cited in the article below, see

Following are the Shareholder Support Rankings for each of the companies referenced in the article.


Shareholder Support Rankings

Votes for Management Compensation

Shareholder Support Rankings™ are based on total voting rights for all classes of stock as of record date. "Absent" votes include abstentions, broker non-votes and shares not present. All data is from SEC filing records of subject companies, provided according to Shareholder Forum specifications by Morningstar, Inc.

Ó Copyright 2012 The Shareholder Forum, Inc.


CFO Journal. (The Wall Street Journal Digital Network), June 11, 2012 article



CFO Report


June 11, 2012, 5:52 PM ET 

Say-on-Pay Failures on the Rise This Proxy Season



[Emily Chasan]

Emily Chasan
Senior Editor

More companies are facing a backlash in their say-on-pay votes this year.

The number of companies receiving less than 50% of shareholder support for their executive compensation packages this proxy season now exceeds last year’s total, according to executive pay consulting firm Semler Brossy.

Through June 8, 44 companies have failed say-on-pay this proxy season, compared to 29 at the same time last year, according to the firm, which tracks say-on-pay votes. In the full 2011 season, 41 companies failed.

While the number of failures is only marginally higher, it’s significant because there are still several weeks left in the current proxy season, according to Francis Byrd, who heads the corporate governance practice at Laurel Hill Advisory Group. He said it wouldn’t be surprising to see at least 50 failures by the end of June.

Companies “need to be closely monitoring their performance and discussing this with shareholders,” Byrd said. “Just because they received good grades one year, doesn’t mean they will receive good grades the next year.”

He said the most common reason for a failure was a disconnect between CEO compensation and company performance.

Of the companies that failed last year that have already held their annual meetings, 24 have passed. Four companies have failed say-on-pay twice –Hercules Offshore, Kilroy Realty, Tutor Perini and Nabors Industries.

“Most companies have been able to recover from a failed vote — it has not been fatal,” said Michael Littenberg, an executive compensation attorney at Schulte Roth & Zabel.

Littenberg said companies may have failed twice because their pay practices are difficult to modify or they’re in an industry doing badly. However, he said, “Companies that have failed the vote twice, they will have to consider whether there’s more that they should be saying to the market about their pay practices.”

Nabors has been under pressure since shareholders learned in February that its former chairman, Eugene Isenberg, was eligible for a $100 million exit package. Even though Isenberg declined to take the package, shareholders voted in favor of a proxy access rule at the company’s annual meeting last week, which could eventually let some big shareholders nominate their own candidates to the board.

Both Tutor Perini and Kilroy faced shareholder concern over poor stock performance and performance relative to their peers this year, Semler Brossy said. Tutor Perini wrote two letters to shareholders after receiving negative recommendations from proxy advisory firms, saying it took its negative vote in 2011 “very seriously,” made changes to its programs and undertook a shareholder outreach program. Still, shareholder support fell to 38% in the 2012 vote, down from 49% in the 2011 vote.

Kilroy received just 30% support from shareholders this year, down from 49% last year. Chief Financial Officer Tyler Rose told Bloomberg last week that the company made a lot of effort reaching out to shareholders last year and that the company’s board is continuing to evaluate the situation.

In May, Hercules Offshore became the first company to fail a say-on-pay vote twice, as proxy advisory firms said changes to the company’s pay practices, such as removing tax gross-ups from executive pay packages, did not go far enough. Hercules’ CEO received a 110% increase in reported pay due to a retention and performance award, Semler Brossy noted. The oil and gas services provider saw a modest improvement in its say-on-pay vote, receiving 48% shareholder support in 2012, versus 41% in 2011.

Spokesmen for Nabors and Tutor Perini declined to comment, while Hercules and Kilroy representatives did not immediately respond.

Copyright ©2012 Dow Jones & Company, Inc. All Rights Reserved




This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.