The Advisors' Blog

– Broc Romanek, CompensationStandards.com

Here is news from Ted Allen of ISS:

The SEC staff has rejected a no-action request by Winn-Dixie Stores to omit a proposal from Schultze Asset Management that seeks an annual “say on pay” vote. The Florida-based grocery retailer argued that it had “substantially implemented” the proposal because its board adopted a governance policy in July that calls for a biennial vote on compensation. Winn-Dixie plans to hold its first advisory vote at its 2010 annual meeting on Nov. 10. The staff of the SEC’s Corporation Finance Division did not agree, noting: “We are therefore unable to conclude that Winn-Dixie’s policies, practices, and procedures compare favorably with the guidelines of the proposal such that Winn-Dixie has substantially implemented the proposal.”

The staff ruling is potentially significant because many U.S. companies likely will seek to hold less frequent advisory votes after the 2011 proxy season, and some activist investors may continue to use shareholder resolutions to press for annual votes. The Dodd-Frank Act requires U.S. issuers to hold a pay vote at their first annual meeting after Jan. 21, 2011, and directs companies to conduct a vote on the frequency of future pay votes at that meeting (and then once every six years). Given this mandated vote on frequency, companies may have better luck in their efforts to exclude similar shareholder proposals next season. However, the SEC may rule differently on 2012 proposals when a frequency vote will not be on corporate ballots.