July 25, 2022
Severance Agreement-Related Shareholder Proposals Fared Well in 2022
For the first time in recent years, the largest subcategory of “executive compensation” shareholder proposals related to requests to submit severance agreements to a vote. That’s according to this Gibson Dunn memo – which recaps key “shareholder proposal” developments from the 2022 proxy season and said that the “severance” category weighed in at 44% of the larger executive compensation group of proposals. Overall, there were 36 shareholder proposals on executive compensation this season, down 27% from last year. Here’s more detail:
The majority of the severance-related proposals asked “that boards seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments with an estimated value exceeding a certain percentage of the executive’s base salary and bonus.” Many of these were submitted by the same proponent – John Chevedden & his associates.
This is a topic worth watching. The memo notes that as of June 1, 2022, these severance-related proposals had an average shareholder support of 46.9%, and four received majority support.
– Emily Sacks-Wilner