Energy Insights

2019 Say on Pay Outcomes in Oil & Gas Continue to Trail General Industry

Several oil & gas companies had a rough proxy season in 2019, with overall lukewarm shareholder support for executive pay programs in the industry.

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While many companies received kudos from investors for the addition of returns-oriented incentive metrics, others struggled to demonstrate pay-for-performance alignment or continued to make aggressive pay actions despite lackluster shareholder returns in 2018. In this posting, we take a look…

Despite Strong 2016 Shareholder Returns, Certain Energy Companies Struggle with Say on Pay

In 2016, the oil and gas industry generated positive returns for shareholders, but in 2017 oil and gas companies lagged general industry in Say on Pay support.

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ISS recommended against 18% of oil and gas companies vs. 12% for the entire Russell 3000, and 3% of oil and gas companies failed Say on Pay (i.e., <50% support) compared to only 1% in the Russell 3000. ISS recommended…

The Impact of Lower Stock Prices on 2016 Say on Pay

Many energy companies should anticipate tripping ISS's absolute stock price test.

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The current industry downturn is already impacting compensation programs and will likely also impact the upcoming Say on Pay season. Based on our research, the market decline will cause an increased number of energy companies to trip a key ISS…

ISS’s Say on Pay Vote Recommendations Surprisingly Similar to Last Year

Some experts expected more "against" votes for the energy industry this year, but that did not come to fruition.

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Heading into this recently past proxy season, experts speculated that ISS might recommend “against” say on pay proposals among the energy industry at a higher rate compared to last year assuming the dramatic decline in stock prices, driven by the…

Proposed Pay for Performance Disclosures May Actually Help

Benefits of the proposed disclosures include a standardized methodology for realizable pay and additional data that will facilitate shareholder analysis.

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The SEC recently proposed rules outlining a new CD&A disclosure coming out of Dodd-Frank (see Meridian Alert here) – these rules require disclosure of the link between performance and compensation “actually paid”. While the proposed disclosures will likely require a…

Energy Industry Influences ISS Peer Approach

ISS recently released its policy updates for the 2015 proxy season, with one notable change.

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ISS recently released its policy updates for the 2015 proxy season (Meridian summaries here and here). One notable change is ISS’s methodology for selecting peers for energy companies for use in its pay for performance analysis. This change was likely…

SEC Releases New Guidance on Proxy Advisors

Meridian Expects to See Change, but it Might not be as Much as Some Would Like

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After months of speculation, the SEC has recently released its highly anticipated guidance on investment advisors and on proxy advisors (see our recent client alert). I know many Boards and senior executives will be pleased to see progress in this…

ISS Continues its Unpredictability

While ISS Remains Influential, Some of its Decisions are Inconsistent From Company to Company

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The 2014 proxy season is almost over for calendar year companies. Based on our analysis, ISS continues to play an influential role and the energy industry continues to be one of their favorite targets, but it’s getting more difficult to…

Using Realizable Pay to Test Pay and Performance Alignment

Testing the Link Between Pay and Performance Can Help Firms in Many Ways

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With the calendar year completed, many of our energy clients are taking this opportunity to test the long-term historical link of pay and performance. This historical analysis serves a few purposes: Helping the compensation committee understand whether they have an…

Questioning Total Shareholder Return

While Total Shareholder Return is Under Scrutiny, it Remains the Best Metric to Evaluate Performance

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Relative Total Shareholder Return (TSR) has become the most common performance metric in long-term incentive plans across the energy industry. TSR is also the primary metric used by shareholders and proxy advisors like ISS to evaluate performance and test the…

Under the Microscope

8 Keys to Benchmarking Pay to Withstand Stakeholder Scrutiny

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Say on Pay, ISS and activist investors have increased their focus on how companies benchmark pay and have raised the question whether benchmarking is used to inflate executive pay. This is particularly important in the energy sectors where pay levels…

2013 Say on Pay Recap

ISS Continues Tough Stance on the Industry

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With another proxy season behind us, one of the key headlines is ISS’s subjective application of its policies and its continued focus on the energy industry. While energy isn’t the only industry in their crosshairs, ISS continues to be critical…

2013 ISS Recommendation Trends

ISS Recommendations for the Energy Industry are Looking Up This Year with Fewer Against Votes Than Last Year

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We’re about midway through the 2013 proxy season and so far, the energy industry is faring better than last year with ISS. 12% of energy companies have received a Say on Pay AGAINST recommendation from ISS this year as opposed…

Dealing with Dissent

What to do if You Receive an Against Vote Recommendation from ISS

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The proxy season is shifting into high gear as most companies file their 2013 proxy statements. Companies will anxiously await shareholder advisor recommendations hoping for support on various compensation matters (e.g., Say on Pay, equity plans). Energy companies should have…