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Bess Joffe, the subject of the interview reported in the article below, is a member of the Forum’s Program Panel for reconsidering “Say on Pay” and had also been a member of a previous Forum program's Advisory Panel that had initiated the 2006 Advisory Voting project.  She is responsible for relationships with US companies at Hermes Equity Ownership Services Ltd, which had supported the organization of the Forum's 2006 program addressing executive compensation issues.

For reports of issues addressed in the interview, see the "Say on Pay 2009" clearinghouse web site and the following:


Investor Relations Magazine, April 2, 2009 article


Crossbow logoPeople on the street

Hermes to US: do one-on-ones about exec comp

Apr 2, 2009

Webinar focuses on say-on-pay lessons from the UK

Today’s webinar from Georgeson and law firm Cleary Gottlieb looked for lessons about say on pay from the UK, where companies have had advisory votes on compensation since 2003. 

Georgeson’s senior VP of corporate governance, Rhonda Brauer, and Mary Alcock, Clear Gottlieb’s executive compensation counsel, spent an hour quizzing Bess Joffe, who handles US engagement for Hermes Equity Ownership Services (HEOS). HEOS represents BT’s pension fund, which is the UK’s largest. 

TARP firms now preparing for a say-on-pay vote should be taking questions about compensation from as many shareholders as possible,  Joffe urged. She suggested the compensation committee head as the ideal person to take the hot seat. ‘Perhaps [companies] should post contact information on the web, really striving to make the right, relevant people available for shareholders to talk to,’ she said.

Alcock suggested it’s too late for ‘meaningful engagement’ this proxy season because compensation plans have been set. She also raised concerns around selective disclosure and proxy solicitation rules.

Consensus was that most of the dialogue should happen outside the proxy season in preparation for next year’s say-on-pay votes. ‘That’s when we have the best conversations,’ said Joffe, who also said US companies should follow the UK example and issue confidential ‘consulting documents’ to major shareholders well ahead of their AGMs.

Joffe insisted that one-on-one engagement is the best means – and biggest advantage – of the UK’s say on pay scheme, even though a UK company’s remuneration report is typically clearer and ‘more digestible’ than a US CD&A: ‘One thing that’s difficult to ascertain from reading a CD&A is the philosophy of the compensation committee.’

Brauer pointed out that the UK has around 1,100 companies doing say-on-pay votes compared to 14,000 that could be covered by potential US legislation. That scale, combined with US investors being more dispersed geographically and by approach, could make a UK-style dialogue tough. She proposed it would be more sensible for the US to make say-on-pay mandatory for the S&P 1500 or the Russell 3000 but not for the whole universe of issuers.

Brauer also cited a number of other ways that companies are talking about pay with shareholders: Pfizer and Ingersoll-Rand have held meetings with their top 20 to 25 shareholders; Schering-Plough planned to send a survey about say on pay with its next proxy; some companies like Amgen are using TIAA-CREF’s 10 questions for evaluating CD&As to help investors; and Prudential has a new section of its website devoted to compensation, including a link for shareholders to provide feedback.

Joffe expressed admiration for all these initiatives but said none can replace an advisory vote: ‘The vote really acts as a lever to effect change if we feel the conversations with the company haven’t been successful, or if they haven’t taken on board the changes we’ve suggested.’ She added that the UK’s pay vote has ‘enhanced dialogue not only on compensation issues but on much broader issues. It has opened up channels of communication. [We] get a better sense of the quality of thinking at the board level.’

The webinar is archived on Georgeson’s website.

By Neil Stewart





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