Say-on-pay votes: How to
secure shareholder support
shareholder support is not always an easy deal but some companies are one
Interested in improving your company’s chances of
say-on-pay support? Model your investor communications programs after your
customer relations practices. That’s according to Gary Lutin, chair of the
an independent moderator of investor/executive exchanges.
‘A company that’s publicly traded likely has won customers’ business by
delivering a cohesive marketing message,’ Lutin explains. ‘You need to do
the same thing with investors, coordinating the messages of the people
charged with responding to investors’ questions about both voting and
Integrating the communications of executives who
focus on governance
and the ones who devote their time to buy-sell issues might seem like a
no-brainer. But people familiar with shareholder relations dynamics report
that, within both companies and investor organizations, voting and valuation
concerns are often treated as wholly separate from one another.
‘That’s not usually a good thing, but it’s a fact of life,’ says Stephen
Davis, a senior fellow at Yale University School of Management’s Millstein
Center for Corporate Governance and Performance.
It doesn’t have to be. At
for example, the four departments that engage stockholders consistently –
the investor relations group, the corporate secretary, the legal department
the social responsibility
group – stay in constant communication with each other, according to Cary
Klafter, Intel’s corporate secretary.
Klafter says that, while Intel’s investor relations team almost always
visits investors ‘with regard to finance-related topics’, the in-house legal
department nevertheless ‘wouldn’t think of doing something involving
executive compensation without involving it.’
‘The investor relations team needs to be prepared and understand what our
positions are,’ Klafter explains. ‘It’s possible corporate governance issues
will arise in the course of its meetings.’
The in-house legal department and social responsibility team are likewise
involved in Intel’s quarterly earnings review, though most of the questions
fielded on the analysts’ call concern revenue, gross margin and product
At each of its last two annual shareholder meetings, Intel conducted
say-on-pay votes voluntarily. More than 90 percent of the company’s
shareholders approved the company’s executive compensation plan each time.
Intel’s 2011 shareholder meeting is scheduled for May.
Cross Border Ltd. 1995–2011.