– Broc Romanek, CompensationStandards.com

Here is a blog from Fred Whittlesey of Compensation Venture Group about how an increasing number of companies are rushing to declare and pay a “special dividend” prior to the end of 2012 to hedge shareholders against the prospect of a large increase in tax rates in 2013.

– Broc Romanek, CompensationStandards.com

Ning Chiu of Davis Polk provides this news from her blog:

ISS has released a detailed set of FAQs on how it will select a company’s peer group for purposes of conducting its pay-for-performance analysis. ISS uses this peer group to measure a company’s total shareholder return and CEO pay in deciding how to recommend for the say-on-pay vote.

The FAQs provide information on how ISS will select 14-24 peers from the company’s own GICS code, as well as the GICS code of the peers named in the subject company’s proxy statement. Subject to size constraints based on revenues or assets and market value, ISS describes the order in which peers will be selected from the potential universe of companies that will come up based on those GICS codes. Other questions address the use of size parameters, which are clearly key to the selection process, the GICS industry groups (financial services) where assets will be used instead of revenue, and what happens if a company discloses using more than one peer group.

In addition, by December 21st a company can inform ISS of any changes to its peer group since the 2012 disclosures, as a source of input into the ISS peer group selection.

While more information is always useful, this is unlikely to mean that companies will be able to proactively figure out the ISS peer group themselves given the complexity of GICS, the number of potential companies that ISS can choose from under this method and the use of what they term “manual judgment” in the selection process. It appears that again companies will not know who they are being measured against until they receive the ISS report.

For those companies that may have faced a say-on-pay issue last year because of perceived faulty peer groups used by ISS, note that in back-testing this new method against their analysis applied in 2012, ISS indicates that more than 95% of companies would have received the same pay-for-performance analysis.

– Broc Romanek, CompensationStandards.com

Recently, BlackRock published this piece entitled “Time to Rethink Executive Incentive Programs“…

– Broc Romanek, CompensationStandards.com

Recently, I posted a blog from ISS about 3 failed say-on-golden-parachutes – Advance America, Ariba and Interline Brands. The blog also mentioned the European failure of Xstrata, as detailed in this WSJ article. Rajeev Kumar of Georgeson was kind enough to point out two other recent failures: Cooper Industries and Coventry Health Care. I am maintaining a list of say-on-parachute failures in our “Say-on-Parachute” Practice Area.

– Broc Romanek, CompensationStandards.com

In this podcast, Mark Brockway of ISS Corporate Services discusses the latest developments related to ISS’ executive compensation analytic services, ExecComp Analytics, including:

– What is ExecComp Analytics?
– What was your goal in creating it?
– Any surprises so far since it went live?