The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

Monthly Archives: March 2014

March 17, 2014

Poll: How Many Say-on-Pay Failures This Year? 2nd One Just Happened

Broc Romanek, CompensationStandards.com

As noted in its Form 8-K, Hologic is the 2nd company holding its annual meeting in 2014 to fail to gain majority support for its say-on-pay with only 34% voting in favor (down from 65% last year). Hat tip to Karla Bos for pointing this out!

Poll: How Many Companies Will Receive a “Failed” Say-on-Pay Vote in ’14?

With 74 say-on-pay failures in ’13 – more than most folks predicted in last year’s poll – what will this year bring? Please take part in this anonymous poll:

survey services

March 13, 2014

ISS Sold? Private-Equity “Insight Venture” Is Likely Auction Winner

Broc Romanek, CompensationStandards.com

As noted in this WSJ article: “Investor adviser Institutional Shareholder Services Inc. is set to change hands for the third time in seven years, according to people familiar with the matter, amid debate about the firm’s sway over governance in corporate America.

Insight Venture Partners, a New York private-equity and venture-capital firm that was an early investor in Twitter Inc., is the likely winner of an auction of ISS run by current owner MSCI Inc., people familiar with the matter said Monday. Terms of the potential deal and its timing couldn’t be learned. People close to the sales process had said earlier that ISS could fetch around $300 million, which would be considerably less than it has sold for in the past.”

And here is a Fortune article about how the new owner would manage ISS’ conflicts…

March 12, 2014

Proposed Tax Reform Act’s Impact on Executive Pay

Broc Romanek, CompensationStandards.com

This memo from Aon Hewitt relates to this teaser: “For those who thought the movement to rein in executive pay may be losing steam, the recently released tax reform discussion draft provides a reality check. Among the hundreds of various tax breaks that would be reduced or repealed to help pay for recommended tax rate cuts, are several proposals related to executive compensation that could (if enacted) serve as a catalyst to reduce executive pay levels at for-profit and tax-exempt organizations.” Here are other memos that I have posted on the bill…

March 11, 2014

Cap’n Cashbags: Wanna Ride My Corporate Jet?

Broc Romanek, CompensationStandards.com

Pretty excited to announce my new site – CorporateAffairs.tv – which is a free site featuring short videos that are either educational, news or entertainment-oriented. This 20-second video entitled “Cap’n Cashbags: Wanna Ride My Corporate Jet?” is an example of the fun ones:

March 10, 2014

Webcast: “The Top Compensation Consultants Speak”

Broc Romanek, CompensationStandards.com

Tune in tomorrow for the webcast – “The Top Compensation Consultants Speak” – to hear Mike Kesner of Deloitte Consulting, Blair Jones of Semler Brossy and Ira Kay of Pay Governance “tell it like it is. . . and like it should be.”

March 7, 2014

Executive Pay Conferences: The 33% Early Bird Discount Expires In 1 Week

Broc Romanek, CompensationStandards.com

The early bird discount expires next Friday, March 14th, for our popular conferences – “Tackling Your 2015 Compensation Disclosures: The Annual Proxy Disclosure Conference” & “Say-on-Pay Workshop: 11th Annual Executive Compensation Conference” – to be held September 29-30th in Las Vegas and via Live Nationwide Video Webcast. Here are the agendas – 20 panels over two days.

Early Bird Rates – Act by March 14th: Huge changes are afoot for executive compensation practices with pay ratio disclosures on the horizon. We are doing our part to help you address all these changes – and avoid costly pitfalls – by offering a special early bird discount rate to help you attend these critical conferences (both of the Conferences are bundled together with a single price). So register by March 14th to take advantage of the 33% discount.

Here is a 45-second video to remind you of the special nature of our conferences…

March 6, 2014

2014 Say-on-Pay Results So Far

Broc Romanek, CompensationStandards.com

Steven Hall & Ptrs has started their regular reporting of say-on-pay voting results for this year. This update has a chart – but the results so far are:

– 163 companies held Say on Pay votes in 2014
– 1 company has failed with a 57% ‘Against’ vote
– 83% of companies have received a greater than 90% ‘For’ vote
– Average vote among all companies

o 93% ‘For’ vote
o 5% ‘Against’ vote
o 2% Abstentions

March 5, 2014

Options Backdating: GC’s “Hippie Sensibilities” Keeps Executives Out of Jail

Broc Romanek, CompensationStandards.com

Here’s an interesting blog by Ben Horowitz, who recalls why his company didn’t get caught up in the stock options backdating scandal. Pretty scary that PwC was blessing this practice and many tech companies blindly listened…

And here’s a piece from Francine McKenna entitled “VC Horowitz Implicates Auditor PwC In Story About Dodging Backdating Bullet.”

March 4, 2014

Is the Proxy Advisors Influence Overstated?

Broc Romanek, CompensationStandards.com

Recently, Mercer released this alert entitled “Is the Proxy Advisors Influence Overstated?,” which is in the format of a roundtable among its senior advisors…

Also check out this article in Fortune entitled “Do Proxy Advisers Hurt Your Returns?“…

March 3, 2014

The Differences Between “Pay” and “Equity”

Broc Romanek, CompensationStandards.com

In this article, Paul McConnell and Jeff McCutcheon of Board Advisory identifies what they believe to be a fundamental problem with executive compensation – thinking about equity as just another form of pay. Here’s a summary of the article:

It is equity – i.e., the executives “share of the deal”. Venture capital and private equity get the distinction. It is time public companies did. We have been beating around this bush for years with walk away calculations, competitive annual grants, ownership requirements etc. If we just acknowledged that there was a pay piece and an equity piece that are fundamentally different, a lot of these issues with go away – including the firestorm that will come from the new Dodd-Frank pay ratios.