Report on Say on Pay and Select Shareholder Proposals For the 2019 Proxy Season

Executive Summary

Specifically, this report will cover the following areas:

■   Standard & Poor’s (S&P) 500 Say on Pay (SOP) Vote Results and Analysis,

■   Russell 3000 SOP Vote Results and Analysis, and

■   Analysis of Vote Results on Select Shareholder Proposals.

Highlights of Say on Pay Vote Results (through October 10, 2019)

■   98.43% of S&P 500 companies’ SOP proposals have received majority shareholder support (Seven S&P 500 companies’ SOP proposals failed to receive majority support – namely, Align Technology, Ameriprise Financial, CenturyLink, Fleetcor, McKesson, Netflix and Xerox).

■ 97.64% of Russell 3000 companies’ SOP proposals have received majority shareholder support (53 Russell 3000 companies’ SOP proposals failed to receive majority support).

■ Institutional Shareholder Services (ISS) has recommended AGAINST 11.5% and 12.8% of SOP proposals at S&P 500 companies and Russell 3000 companies, respectively.

■ So far this proxy season, negative ISS SOP vote recommendations at S&P 500 companies have arguably depressed shareholder support by 27.1 percentage points, down from the prior eight-year average of 30.4 percentage points.

Highlights of Vote Results on Select Shareholder Proposals (through October 10, 2019)

■ So far this proxy season, the most prevalent shareholder proposal on corporate governance relates to the separation of CEO and Board Chair roles. However, none of the 59 proposals voted on thus far have received majority support.

■ Other key shareholder proposals on corporate governance seek (i) the right to act by written consent, (ii) the right to call a special meeting at a specified ownership threshold, (iii) a majority-voting requirement in the election of directors, (iv) the right to proxy access, and (v) the elimination of supermajority requirements to amend the charter or bylaws.

■ The most prevalent type of compensation-related shareholder proposal requests that a company report on a company’s gender pay gap. The second-most prevalent type of compensation-related proposal seeks for the board to include environmental or social metrics in determining senior executive incentive compensation. However, none of the proposals voted on thus far have received
majority support.

■ Two diversity related shareholder proposals received majority shareholder support. One shareholder proposal called for Travelers Companies to issue a company-wide diversity report with employee data by gender and race in EEOC-defined job categories. The other shareholder proposal called for Newell Brands to issue a report on diversity in executive leadership.

■ Shareholder proposals calling for the adoption of a clawback policy and annual disclosure of any recouped compensation received majority support at Fleetcor Technologies and Mallinckrodt, respectively. A shareholder proposal seeking to broaden the company’s clawback policy received majority support at Mylan.

The full report can be downloaded here.

© 2019 Meridian Compensation Partners, LLC. The material in this publication may not be reproduced or distributed in whole or in part without the written consent of Meridian Compensation Partners, LLC. Questions or comments regarding this report should be directed to Donald Kalfen at dkalfen@meridiancp.com or 847-235-3605.