Financial Regulatory Forum

Corporate governance watch: vote failures signal investor dissatisfaction with executive pay

By Alex Lee

NEW YORK, May 10 (Business Law Currents) – Stockholders are making their discontent heard through say-on-pay votes that have not been flattering to executives. So far this year, multiple companies have outright failed these votes and even more have not been able to reach the 70 percent approval threshold. In light of Institutional Shareholder Services’ (ISS) 2012 Corporate Governance Policy Updates, evaluations of company pay policies are in line for even greater scrutiny.

According to ISS, a majority vote that does not reach at least a 70 percent approval rate is considered as a failure. A simple majority alone is no longer deemed a mandate of a board’s policies, and any approval level below 70 percent is now perceived as a serious exhibition of shareholder dissatisfaction. (more…)

Corporate Governance: Staggered U.S. boards are endangered species

By Erik Krusch

NEW YORK, March 23 (Westlaw Business) – Classified boards may be moving towards the endangered species list, as investors and even management are hunting them down.

Valero and Biogen Idec’s management teams, for example, are recommending that shareholders approve amendments declassifying their respective boards. Other corporations, such as Alcoa and McDonald’s Corp, however, are fighting their shareholders’ attempts to level their staggered boards. It remains to be seen how many staggered boards emerge from this proxy season unscathed. (more…)

  •