The Shareholder ForumTM has been asked by several participants to
initiate a new program for reconsidering the “advisory voting” concepts defined
in its 2006 project.
When Forum participants first considered advisory voting, it was
viewed as a process that could be adapted individually by corporate managers and
investors as a foundation for constructive communication about common interests
in a company’s success. Its subsequent transformation into a confrontational
activist demand for legislatively imposed “Say on Pay” has necessarily raised
important new questions:
If advisory voting is required for all publicly traded US
companies, can investors satisfy their fiduciary responsibilities without
increasing reliance on proxy advisors or other bureaucratized processes?
Will focus on conformance with "good governance" theories
distract both corporate and investor decision-makers from the essential
purpose of compensation to reward competitive success?
Ultimately, will advisory voting help investors make
better decisions about their allocations of capital?
These and other concerns are reflected in increasing marketplace
uncertainty about advisory voting. Recent news reports of declining support for
“Say on Pay” proxy proposals
have been countered by RiskMetrics-ISS reports presenting statistics to show
that their activist client network seemed to be making progress. Academic research also reports significant divisions among investors, including
between “governance” and investment representatives within fund managers, and
further suggests that many of the governance professionals who advocate
“compulsory” advisory voting view it as a means of increasing their influence.
To address these issues,
Sibson Consulting has supported the organization of this open Forum program
to examine how “Say on Pay” might serve the public interest in essential
marketplace processes of enterprise competition and capital allocation. Corporate, investor and professional representatives with recognized expertise
in successful performance will be invited to support the program in an advisory
panel that guides the Forum’s conduct of workshops, academic studies, surveys,
open meetings or other processes as required for a full public review of the
issues and a concluding report.
This Forum program is
open, free of charge, to all marketplace decision-makers and
the professionals who advise them, according to the Forum's standard
Conditions of Participation.
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
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
organization of this Forum program was supported by
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
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