21 Oct. 2010 | Comments (0)
- The largest companies (by revenue) predominantly elect directors via majority voting. More than three-quarters of companies in the largest revenue group utilize some form of majority voting, and 95.1 percent also include a mandatory resignation policy.
- Boards increasingly focus on risk oversight. Almost all financial companies with asset value equal to $10 billion or more have a designated chief risk officer. Nearly half of all non-financial companies and 46.2 percent of manufacturing companies have an enterprise risk management committee at the management level.
- Large companies, in particular, utilize clawback provisions. At least 40 percent of companies in the manufacturing and non-financial services industries have adopted clawback provisions to recoup executive compensation in the case of a restatement or fraud.
- Shareholder approval of executive compensation (Say on Pay): Section 14A (a) of the Exchange Act would require such votes to take place at least once every three years beginning with the first shareholders’ meetings taking place on or after Jan. 21, 2011. Such a vote would have to be disclosed in the annual proxy statement and the Compensation Discussion & Analysis would have to include whether a company considered the results of the non-binding vote.
- Shareholder approval of the frequency of shareholder votes on executive compensation: Starting with Jan. 21, 2011, at least once every six years companies would have to allow shareholders to vote on how often they would hold Say on Pay votes.
- Shareholder approval and disclosure of golden parachute arrangements: Companies would have to disclose compensation arrangements for executive officers in connection with mergers, going private transactions and third party tender offers. Also, companies would have to provide a shareholder advisory vote to approve such golden parachute arrangements in merger proxy statements.
- Institutional investment manager reporting of votes: Such managers would have to file annual statements with the SEC disclosing their votes on Say on Pay, frequency of Say on Pay, and golden parachute arrangements. The rule would apply to every institutional investment manager who manages certain equity securities with an aggregate fair market value of at least $100 million.