December 18, 2019
The “Holy Grail”: A Concise CD&A
– Lynn Jokela
Recently in our Q&A Forum (#1294), one of our members articulated a question that seems to be on everybody’s mind:
Our 2019 CD&A was 23 pages long, or 50% longer than the first proxy statement I drafted 25 years ago. Most of us who draft CD&As can likely agree that they are too long and contain much more detail than most investors want or need. Very few investors, whether retail or institutional, actually read them or if they do read them, get beyond the first five pages. Investors become frustrated by trying to extract and understand the most important information, even with the help of graphics and plain English. For issuers with significant institutional ownership, the CD&A is largely irrelevant to ISS and Glass Lewis when determining their say on pay vote recommendations.
Would you please point me to a CD&A that is concise (say 10-12 pages, assuming that there is one) yet effective in satisfying the SEC’s rules and explaining an issuer’s executive compensation program and outcomes to investors and the proxy advisory firms? If there is no such thing, why can’t there be?
John gave this answer:
Levi-Strauss comes to mind – as does PPG. Mark Borges blogged about both companies’ comp disclosures and you should check out some of the other companies that he highlighted in his always-informative “Proxy Disclosure Blog.”