July 2012 Proxy Voting Fact Sheet
say-on-pay (SOP) resolutions were being voted on during the 2012 proxy
season, management nominees to boards of directors of U.S. public
companies faced less opposition by investors. This and other data from
nearly 2,500 annual general meetings (AGMs) held between January 1 and
June 30 at Russell 3000 companies are discussed in the new edition of
Proxy Voting Fact
Sheet — the periodic report issued by The Conference
Board in collaboration with FactSet Research. Data discussed in the
report is compared with the S&P 500 and analyzed across 20 business
reviews the most recent statistics on:
Voted, omitted, and withdrawn shareholder proposals.
Average voting results, by topics.
Say-on-pay management proposals.
1,856 companies reporting detailed SOP vote results through June 30, 49
executive compensation plans (up from 41 in 2011) have failed to receive
the majority support of their shareholders. The list includes notable
cases such as
American Eagles Outfitters,
Chesapeake Energy, Citigroup, and
Pitney Bowes. Interestingly, a look at 2012 disclosure from
companies that were on that list in 2011 confirms the systematic effort
subsequently made to engage with shareholders on the issue, as well as the
improvement of their SOP voting performance when their executive
compensation plans went again to a vote during this proxy season. Only a
handful of Russell 3000 companies (including
Industries, Kilroy Realty, and
Tutor Perini) failed their SOP vote for a
second year in a row.
the introduction of SOP, shareholder proposals related to executive
compensation have become better formulated and more specific. In 2012, the
total number of proposals on this subject has decreased significantly (63,
or less than half the volume registered in 2010 and 2009), yet there
appears to have been more focus on requests such as the introduction of
retention periods for equity-based awards (26 of the 63 proposals, up from
14 proposals in the January 1-August 3, 2011 period) and the vote to limit
golden parachutes and other extravagant severance agreements (12 of the 63
proposals, up from 7 in the 2011 period).
findings from the report include:
Through June 30, 66.3 percent of the shareholder proposals filed at
Russell 3000 companies went to a vote, while 24.3 percent of proposals
were omitted from the voting ballot by management, and 6 percent were
withdrawn by their sponsors.
sponsor type, most shareholder proposals submitted at Russell 3000
companies through June 30 were filed by individuals (263 proposals),
followed by labor unions (132) and public pension funds (125). Public
pension funds reported the highest percentage of voted proposals (82.4
percent), whereas proposals by religious groups showed the highest
percentage of withdrawals (25 percent) and proposals by individuals showed
the highest percentage of omissions (36.1).
subject, the largest proportion of proposals filed at Russell 3000
companies as of June 30 related to corporate governance (352 proposals),
including the popular issues of board declassification, majority voting,
and the elimination of supermajority voting requirements. Of those, 66.3
percent were voted, 27.7 percent were omitted by management, and 3.1
percent were withdrawn by their sponsors.
Among shareholder proposals on corporate governance, those to declassify
the board of directors received the highest average “for” votes as a
percentage of votes cast (80 percent). Other widely supported proposal
topics include the redemption (or the introduction of a contingency
provision for the shareholder approval) of poison pills (73.1 percent of
votes cast), the elimination of supermajority requirements (67.7 percent),
and the adoption of majority voting in director elections (60.6 percent).
Among shareholder proposals on social and environmental policy, support
level remained consistently low in spite of increasing volume. The highest
proposal volume was documented for proposals on political issues
(including the disclosure of or the adoption of formal policies on
corporate political contributions: 70 proposals, which received an average
support of 18.5 percent of votes cast) and environmental issues (including
the publication of a comprehensive sustainability report and the adoption
of a climate change policy: 32 proposals, which received an average
support of 16.6 percent of votes cast).
June 30, shareholders of Russell 3000 companies filed 21 proposals on the
election of a dissident’s nominee to the board of directors, receiving an
average support level of 69.8 percent of votes cast.
report is available
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