Within days of each other two CEOs announced their intentions to step down. Sara Lee Corp. Chairman and CEO Brenda Barnes announced her decision to step down permanently to focus on improving her health following a stroke. Barnes, 56, had been on temporary medical leave since May 14. Days before Ms. Barnes’ announcement, Much-heralded Hewlett-Packard chieftain Mark Hurd resigned due to "circumstances surrounding a claim of sexual harassment." In both cases interim CEOs have been named; however, Hewlett-Packard’s shares went into a tailspin on the news.
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A study entitled, "2010 CEO Pay Strategies," conducted by Equilar (www.equilar.com), an executive compensation research firm, finds that median S&P 500 CEO compensation fell for the second year in a row, declining by 7.9 percent from 2008 to 2009. In 2009, median total compensation for S&P 500 CEOs was approximately $7.5 million, down from approximately $8.2 million in 2008.Equilar’s analysis of S&P 500 CEO compensation draws on recently filed proxy data for 342 companies in the S&P 500, all of which have had their CEOs in place for at least two full years. By selecting only incumbent CEOs, the study avoids distortion from new-hire awards and more accurately tracks year-over-year changes in compensation. The companies included in this report ended their most recent fiscal year between June 30, 2009 and January 31, 2010.
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Many years ago, the chairman of a client of mine wanted to expand the company’s board. One of the directors asked if he wanted a "real director or someone like us." I was reminded of that story by the recent death of Jerome York, by all accounts an "uber director" who served on Apple’s board. He was tough and analytical and a man of conscience; he contemplated exiting the Apple board in light of the way the company handled the disclosure of Apple chief Steve Jobs’ illness. He decided against it as he thought it would create uncertainty and instability.
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"Devastated" was a term I heard recently used in describing the expectations for the retail vote during this year’s proxy season. This individual is in a pretty good position to judge for his firm provides shareholder services.
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February 23rd, 2010
admin
The Securities and Exchange Commission recently announced a series of steps to educate investors about proxy voting and support greater investor participation in corporate elections.
The measures include amending the SEC’s e-proxy rules, issuing an Investor Alert, and creating new Internet resources that explain the proxy voting process in plain language. In a statement, SEC Chairman Mary L. Schapiro said, "Investor participation in elections at companies they own is critical to effective corporate governance."
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The SEC recently announced that it is reopening for 30 days the comment period with respect to its proposed proxy access rules that were initially released in June 2009. The SEC indicated that by doing so it hopes to solicit input on additional material and data that has been submitted to the public comment file since the initial August 17 deadline.
The SEC’s announcement reflects the many challenging issues that the agency is dealing with in connection with its consideration of proxy access. It is likely that the SEC is committed to mandating proxy access for public companies; however, it is also likely that the final proxy access rules will vary significantly from the rules proposed in June and may include a mechanism whereby public companies, through shareholder action, would be permitted to approve proxy access bylaws that are more restrictive and less shareholder proponent-friendly than the proxy access provisions mandated by the SEC.
What does this mean for corporate planning purposes?
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December 28th, 2009
admin
Recently, the SEC approved final rules to enhance certain compensation and corporate governance disclosures by public companies. These rules are based on proposed rules released earlier this year. There is some uncertainty about the effective date of the new disclosure requirements; however it is believed that the new proxy disclosure rules will be effective for filings made on or after February 28, 2010.
What IROs and the corporate legal teams need to do now:
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November 30th, 2009
admin
Executive compensation is an issue that is going to be with us for a long
time and one that is bound to generate considerable debate (not to mention
legislation and rule changes that will keep corporate attorneys running their
meters over time).
Recently, Shelley Parratt, Deputy Director of the SEC’s Division of Corporation
Finance, delivered a speech at the 4th Annual Proxy Disclosure Conference regarding
the current state of executive compensation disclosure under the SEC’s rules
and what the SEC expects to see by way of disclosure for the upcoming proxy
season.
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