The Advisors' Blog

Liz recently shared Dragon GC’s third annual report on shareholder engagement responses to adverse Say-on-Pay votes, which summarizes the results of its analysis of engagements conducted and disclosed by 14 Fortune 1000 companies that had sub-optimal Say-on-Pay outcomes during the 2025–2026 annual meeting season. As she noted, this report shares real-world examples for six types of responsiveness disclosures it identified in its review. Here are some things that stood out to me from the examples:

– The companies’ engagement strategies were tailored to their circumstances. Some companies disclosed broad, board-involved outreach focused on identifying concerns; some companies have such robust recurring programs that they relied on those rather than a single post-vote outreach effort; and others could specifically structure their engagement around the specific compensation concerns that had already surfaced.

– As usual, responses to investor feedback varied widely and included:

• Reducing target annual awards
• Exercising negative discretion
• Committing to no above-target or one-time awards in a year
• Adopting a policy not to grant front-loaded or off-cycle awards, except in limited circumstances
• Revising the mechanics of incentive programs
• Replacing metrics
• Increasing the proportion of compensation that is performance-based

– Some of the responsiveness disclosures touted governance reforms, which don’t necessarily come to mind when we think about responding to low Say-on-Pay votes. One company appointed a new chair of its compensation committee, added two members and conducted an RFP process that resulted in it retaining a new independent compensation consultant.

– Some companies disclosed that their compensation committees determined that no program changes were warranted, but they beefed up their disclosure regarding certain arrangements, metrics or decision-making processes where it seemed that expanded or revised disclosure could improve investors’ understanding.

For those interested in thorough or unique responsiveness disclosures, I’d encourage you to follow Mark Borges’s Proxy Disclosure Blog, where he shares interesting disclosures on many topics, including responsiveness, like this engagement and responsiveness disclosure provided by a smaller reporting company.

– Meredith Ervine