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February 17, 2010 Forum Report:

Progress of 2010 “Say on Pay” Projects

Investor Survey – Phase 2: What Information Companies Should Provide

SOP Clearinghouse

Simple Responses to Standard Investor Questions

Investor Communication Processes



Forum Report: “Say on Pay”


Progress of 2010 “Say on Pay” Projects

Current plans for the continuing “Say on Pay” program are focused on supporting the practical adaptations of Forum participants to both investor and corporate responsibilities associated with anticipated voting requirements. Your advice will be appreciated to help guide our progress with the projects summarized below and to suggest others that might be considered.

Investor Survey – Phase 2: What Information Companies Should Provide

As reported in December, an initial Forum survey of voting criteria for compensation-related issues established that most investors want information directly from companies – over 70% of investors ranked management sources either “critical” or “important,” compared with only 38% and 29% giving those rankings to governance experts and proxy advisors, respectively – and that we would therefore be following up with another survey to get a more detailed definition of what should be provided.* We are now in the process of drafting and testing a questionnaire that is expected to focus on these issues:

1.      How much attention can the investor devote to different voting issues?

2.      What conditions will stimulate a need for more information?

3.      How should the information be presented?

The objective of this project is to find out from the actual investor decision-makers how corporate managers can most effectively respond to the interests of their shareholders. Any thoughts on what we should be asking will be welcomed.

SOP Clearinghouse

Last year’s “Say on Pay 2009” clearinghouse web site, managed for the Forum by the publisher of Corporate Secretary and IR Magazine, was very useful to both corporate and investor professionals as a reliable reference to the issues everyone needed to understand. We plan to refine the project for 2010, with expanded “focus sections” concentrating primarily on the practical communication and process requirements of implementing advisory voting on compensation.

If you tell us what you expect to be considering, we’ll try to find someone with relevant expertise to lead an “SOP 2010” focus section addressing that interest.

Simple Responses to Standard Investor Questions

As some of you have observed, the widely supported objective of developing broad investor consensus for some standard set of questions – presumably, a variation of the TIAA-CREF “Ten Questions” – might be sensibly combined with the more recent interest in establishing independent “verification” processes for management reports of policies or practices.  This, at least theoretically, would allow corporate managers to present relatively brief, easily understood responses to investor interests supported by assurances that a qualified independent party has conducted due diligence of the details.

Anyone interested in helping to define either the standard questions or a process for response verification is encouraged to participate.

Investor Communication Processes

Considering that the original 2006 Forum interest in advisory voting was “as a foundation for cooperative communication,” the current program has naturally involved attention to the processes for those desired communications. Questions have been raised, though, about whether such issues as standards for “virtual” annual meetings and proposals for “client directed voting” need to be addressed as part of our effort to understand the requirements of implementing “Say on Pay,” or whether we should treat those issues as being beyond the scope of this program.

Your views of what issues should be addressed will be especially helpful in relation to these important but complicating subjects.

GL – February 17, 2010


Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335



* As many of you had expected, efforts to organize the new survey with multiple corporate participants over the holidays and start-of-year period proved to be unrealistic. We have accordingly revised the schedule and expect to make results available by the end of March, in time for reference relating to most 2010 annual meetings.




This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." 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 supported by Sibson Consulting 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 performance 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.