With the 2011 proxy season coming to a close, this report reviews the results of the inaugural season of shareholder advisory votes under the Dodd-Frank Wall Street Reform and Consumer Protection Act through June 23, 2011. It further offers recommendations for companies to consider in making their compensation and governance decisions to help position them for future say-on-pay (SOP) votes. [1]
The 2011 proxy season—the first in which all but small public companies in the United States were required to allow shareholders to vote on an advisory basis to approve or disapprove the compensation of their named executive officers—is almost over. Companies with non-calendar fiscal years or delayed meetings will continue to hold SOP votes throughout 2011, but a majority of U.S. companies that are now subject to the vote requirements (and most S&P 500 and Russell 3000 companies with calendar fiscal years) have already had their 2011 shareholder meetings. [2]
There have been many twists and turns this proxy season, but some clear trends and bottom lines have emerged. Now, while experience and memories are fresh, is a good time to review the results of the inaugural SOP season, identify trends and issues, and assess the landscape for future regulations and other developments. Most importantly, companies need to take all of this into account as they make the compensation and governance decisions in 2011 that will best position them for the 2012 proxy season and SOP votes to come.