January 21, 2008
Third Company Adopts “Say on Pay”
With a hat tip to RiskMetrics, the New York City Comptroller’s office announced in this press release that Par Pharmaceuticals has agreed to adopt an annual shareholder advisory vote on executive pay. In October, a non-binding proposal received 56.8% support at the company’s annual meeting.
Par Pharmaceuticals is the 3rd company to agree to an annual advisory vote on executive pay. On CompensationStandards.com, we are maintaining a list of those companies that have agreed to adopt some form of “say on pay” in the “Advisory Shareholder Vote/Say on Pay” Practice Area.
Deadhead Flights and Incremental Costs
In the CompensationStandards.com “Q&A Forum,” Dave just posted this answer in response to a query about what is the latest thinking about the inclusion of deadhead flights in calculating the incremental cost of personal use of corporate aircraft:
“I think perhaps the most significant development on including deadhead flight costs was John White’s discussion of the issue in his September 6, 2006 “Principles Matter” speech. It was there that he said “[i]n my view, if a deadhead flight leg causes a company to incur incremental costs, those must be included in the calculation of the perk’s value.”
Even with those comments out there, in the 2007 proxy season we saw that few companies disclosed that deadhead flights have been included in the incremental cost calculation. As we noted in the November-December 2007 issue of The Corporate Executive, the inclusion of deadhead costs could increase the reported incremental cost number by as much as two to four times the amount disclosed.
Brink Dickerson of Troutman Sanders did a great presentation on Airplane Perks at our “4th Annual Executive Compensation Conference” back in October. His presentation and materials are archived on CompensationStandards.com, which includes a survey of airplane perks disclosures at many companies. You can also see the “best practice” model disclosure regarding airplane perks in the January-February 2008 issue of The Corporate Executive, where we recommend that deadhead costs and the loss of corporate tax deductions should be factored into the incremental cost calculation.”
Don’t forget to tune into the two-part webconference – “The Latest Developments: Your Upcoming Proxy Disclosures —What You Need to Do Now!” – that kicks off this Wednesday on CompensationStandards.com!
Course Materials: Forecast for 2008 Proxy Season: Wild and Woolly
Catch Pat McGurn of RiskMetrics tomorrow on our webcast – “Forecast for 2008 Proxy Season: Wild and Woolly” – to hear all the latest on the proxy season, including:
– What will be the hot topics for investors in 2008? How do they differ from what was hot this year?
– What changes in governance policies should companies now consider as broker votes may well be gone in 2009?
– What new positions were taken by RiskMetrics in their upcoming 2008 voting guidelines?
Pat always puts together some great course materials – and this year is no exception – please print out these course materials before you listen.
– Broc Romanek