In our “2012 Consultant League Report,” we took a look at annual reports and proxy filings of public companies to determine which consulting firms had the largest, most profitable clients, and which had the best market share in various indices, sectors, and geographic locations. Although many of the large consulting firms consistently stand atop the rankings, categorical breakdowns reveal some of the smaller shops’ unique market niches. Some of our findings:
– Frederic W. Cook & Co. garnered the largest market share for board engagements in the Russell 3000 (14.8% market share), Fortune 100 (22.9%), and the S&P Composite 1500 (17.2% market share).
– W.T. Haigh & Co. achieved the highest average and median percentages of votes in favor of their clients’ Say-on-Pay proposals at 95.5%.
– Towers Watson had the highest percentage of new engagements with 14.5% market share.
Below is a sample table from the report, detailing the market share of firms engaged by the Russell 3000 (in comparison, here are last year’s numbers):
Other charts in the 2012 Consultant League Report include:
– Financial Data: Firms’ client base ranked by revenue, net income, year-end market capitalization, total assets, and one- and three-year total shareholder return
– Indices: The firms with the most market share in the Fortune 1000, S&P 1500, and more
– Sectors: Eight different industry categories, from Healthcare to Financial Services
– Geography: The firms with the most market share in each of four U.S. regions
– Engagement: The market share of firms engaged by management
The complete report is provided to all Equilar Knowledge Center subscribers. Non-subscribers can request a copy of the report.
Tower Watson’s Steve Seelig answers 7 questions in this article about the SEC’s new independence rules…and here is a sequel that answers 4 more questions…
Did you know that approximately 2000 people attend this Conference every year? And the vast majority of our attendees are in-house. They have figured out that we work hard to ensure that the panels are practical and that you leave with valuable knowledge – and new friends. If you haven’t been to our Conferences before, give it a try – particularly this year when New Orleans needs the tourism dollars. Here are the agendas for the event. Register Now.
In my capacity as the DJ for our Conferences – “Dr. Broc” – I’ll soon be putting together my set list. Here’s a sampling of last year’s set list. Feel free to send suggestions…
Recently, Ruth Wimer of McDermott, Will taped a podcast with me on personal use of aircraft. Since Ruth wrote out her answers to some of the questions, I thought I would share them since they are so useful. Below is one answer:
I believe that most public companies have some sort of aircraft policy, but there are still many that do not. Often what I see is a description of the amount of personal use, and sometimes business use, in an executive’s employment contract. In Chapter 3 of “The Corporate CEO,” the author provides that an Aircraft Use Policy, should be a simple, relatively short document that provides the central repository for: How the aircraft is to be used, Who can use it, How the aircraft is scheduled, Special cases, and Operating restrictions.
However, in drafting policies, I like also to describe, using the company’s actual information, examples showing the tax effect to the executive for his own or that of his guests, personal travel, the tax effect to the company, and if it is a public company, a description of the SEC reporting obligations concerning the travel. By covering not only the procedural aspects of the airplane travel, but also the legal effects for the company and the executive, the executive can make more informed decisions about his choice of travel.
Many of the panels for our upcoming week of conferences on executive pay are now planning their agendas. One frequent area of discussion will be the “how, when & why’s” of additional soliciting materials. One common complaint from institutional investors is their tendency to find supplemental materials that merely argue about a proxy advisor’s recommendation as not being too useful. Many would rather read about the company’s analysis – and support – for why their pay program is designed a certain way.
So perhaps they found this presentation filed by Freeport McMoRan useful as it delves into the feedback it received on its prior say-on-pay vote and provides analysis of how its program has changed since it failed its say-on-pay last year. The presentation does not comment on any proxy advisory firm recommendations for 2012.
I found this article from the Hay Group about the role of experts in compensation litigation interesting because I haven’t seen anything like it before…
Last month, it was reported that Tyco International and its former CEO, Dennis Kozlowski, reached a tentative settlement in litigation over compensation before he was convicted and jailed in 2005 for a massive fraud. This litigation has been going on for a decade – and the settlement amount has not been publicly released.
Here is another set of Section 162(m) lawsuits, as noted in the Bloomberg article below (and here’s the latest from Davis Polk on say-on-pay lawsuits):
Caterpillar Inc. (CAT), the world’s largest maker of construction and mining machines, was sued by investors who allege directors wasted corporate assets by not ensuring that executive-incentive plans were tax-deductible. Board members also wrongly enriched themselves by taking compensation that couldn’t be deducted, and the company made insufficient disclosures to stockholders, lawyers for a Philadelphia asbestos workers’ pension fund and the Lansing, Michigan, Police and Fire Retirement System said in two lawsuits filed yesterday in federal court in Wilmington, Delaware.
“There is no reason not to implement compliant compensation plans” that save the Peoria, Illinois-based company tax money, the investors contend in court papers. The investors ask for a jury trial and an order that recipients return wrongly obtained compensation to the company.
Caterpillar, with $60.1 billion in sales last year, said last week it opened a new diesel-excavator factory in Victoria, Texas, and will sell the machinery in the U.S., Mexico and South America. The pension funds also challenged in the lawsuit the cash value, including stock options, senior officials could potentially receive — as much as $87.2 million each under a long-term incentive plan. “This astronomical number, if it is a true maximum, shocks the conscience as to the amount of corporate waste the board may commit,” plaintiffs’ lawyers said in court documents.
“Our normal practice is to not discuss pending litigation,” Jim Dugan, a Caterpillar spokesman who hadn’t seen the complaints, said in an e-mailed message.
The cases are City of Lansing Police and Fire Retirement System v. Caterpillar, 12cv1076, and Asbestos Workers Philadelphia Pension Fund v. Caterpillar, 12cv1077, U.S. District Court, District of Delaware (Wilmington).
Learn about Corp Fin’s new approach to reporting equity awards in the Summary Compensation Table and the Director Compensation Table when it comes to complex equity award structures in the Summer issue of our Compensation Standards newsletter.
And learn more about this – and many more topics over 13 panels – during our upcoming “7th Annual Proxy Disclosure Conference,” which is only five weeks away. We are happy to report that the New Orleans conference hotel made it through Hurricane Issac just fine. But the city needs your support since tourism is the lifeblood of the city. If you can’t make it, you can always catch the conference by video. Register Now!
Last week, a big deal was made of Deutsche Bank being the first global bank to implement clawbacks for bankers that enable it to take back unvested shares that newly hired senior staff received in exchange for stock earned at another job. Here’s some articles: