August 10, 2023
Equity Plan Support Down: Are Repricings to Blame?
Over on the Proxy Season Blog on TheCorporateCounsel.net, I recently blogged about the 2023 US “Proxy Season Briefing” from Glass Lewis (available for download). In addition to stats and commentary on a number of proxy season topics, the Briefing notes that equity plan proposals had a rough year, with the number that failed to receive majority support at its highest level in five years. Glass Lewis suggests the following might be partially responsible:
Problematic board decisions to shield equity plan award recipients from the loss in share value may have had shareholders on edge when weighing equity plan proposals. At a time of continued market volatility, the practice of rescuing underwater stock options through repricing and exchange programs — in some cases without shareholder approval — increased.
But we can’t say this came without warning. Liz blogged about commentary from Glass Lewis this spring noting that the proxy advisor would be on the lookout for option repricing practices as part of say-on-pay and other votes this season.
– Meredith Ervine