TheCorporateCounsel.net

March 12, 2008

Aflac’s Proxy Disclosure: Say-on-Pay

On the heels of my blogging about Aflac’s upcoming say-on-pay vote yesterday, the company filed its preliminary proxy statement, which sets forth the text of its say-on-pay proposal. A relevant excerpt is set forth below:

In November 2006, an interest was expressed by a shareholder in casting a non-binding advisory vote on the overall executive pay-for-performance compensation policies and procedures employed by the Company, as described in the CD&A and the tabular disclosure regarding named executive officer compensation together with the accompanying narrative disclosure) in this Proxy Statement. We believe that our compensation policies and procedures are centered on a pay-for-performance culture and are strongly aligned with the long-term interests of our shareholders.

We also believe that both the Company and shareholders benefit from responsive corporate governance policies and constructive and consistent dialogue. Thus, with Board approval, the Company announced in February 2007 that the Company would voluntarily provide shareholders with the right to cast an advisory vote on our compensation program at the annual meeting of shareholders in 2009 when our disclosure could reflect three years of compensation data under the newly adopted SEC disclosure guidelines.

Subsequently, we concluded that the expanded disclosure of compensation information to be provided in this Proxy Statement would already provide our shareholders the information they need to make an informed decision as they weigh the pay of our executive officers in relation to the Company’s performance. As a result, on November 14, 2007, the Company announced that its Board of Directors accelerated to 2008 an advisory shareholder vote on the Company’s executive compensation disclosures. This proposal, commonly known as a “Say-on-Pay” proposal, gives you as a shareholder the opportunity to endorse or not endorse our executive pay program and policies through the following resolution:

“Resolved, that the shareholders approve the overall executive pay-for-performance compensation policies and procedures employed by the Company, as described in the Compensation Discussion and Analysis and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this Proxy Statement.”

Because your vote is advisory, it will not be binding upon the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

While we believe this “Say-on-Pay” proposal demonstrates our commitment to our shareholders, that commitment extends beyond adopting innovative corporate governance practices. We also are committed to achieving a high level of total return for our shareholders.

Since August 1990, when Mr. Daniel Amos was appointed as our Chief Executive Officer through December 2007, our Company’s total return to shareholders, including reinvested cash dividends, has exceeded 3,867% compared with 660% for the Dow Jones Industrial Average and 549% for the S&P 500. During the same period, the company’s market capitalization has grown from $1.2 billion to over $30 billion.

NYSE Files Proposal to Allow Listing of SPACs

From Davis Polk: “Following a similar move by the Nasdaq Stock Market last week, the NYSE has filed a proposed rule change with the Securities and Exchange Commission that contains a new listing standard specifically for special purpose acquisition companies, commonly referred to as “SPACs.” SPACs are companies with little or no operations that conduct a public offering with the intention of using the proceeds to acquire or merge with an operating company. Until now, the American Stock Exchange has been the only national securities exchange to list SPACs.

The NYSE’s current financial listing standards for operating companies require some period of operations prior to listing. Because SPACs have no operating history, they do not qualify for listing under the NYSE’s current standards. Under the proposed new standard, a SPAC seeking to list would need to demonstrate a total market value of at least $250 million and a market value of publicly held shares of at least $200 million (excluding shares held by directors, officers or their immediate families and other concentrated holdings of 10% or more). In addition, SPACs would have to meet the same distribution criteria applicable to all other IPOs. All of the NYSE’s corporate governance requirements applicable to operating companies would apply to SPACs.

The proposed rule establishes a number of requirements applicable only to SPACs, including:

– a minimum of 90% of the IPO proceeds, together with the proceeds of any other concurrent sales of equity securities, must be placed in a trust account;

– the SPAC’s business combination must be with one or more businesses or assets with a fair market value equal to at least 80% of the net assets held in trust (however, unlike the rule proposed by Nasdaq, there is no requirement that 80% of the consideration for the initial business combination be in cash); and

– the business combination must be consummated within three years.

The NYSE would have significant discretion under the proposed rule. The NYSE indicates in the rule filing that it intends to consider proposed SPAC listings on a case-by-case basis and does not necessarily intend to list every SPAC that meets the minimum requirements for listing. In addition, after shareholder approval of a business combination, the NYSE will assess the continued listing of the SPAC and will have the discretion to delist the SPAC prior to consummation of the business combination. Upon consummation of the business combination, the NYSE will consider whether the transaction constitutes an acquisition of the SPAC by an unlisted company (a “back door listing”), and if so, the resulting company must meet the standards for original listing or be delisted.

The NYSE proposal is subject to publication and approval by the SEC.”

IR Gate! My Joke Goes Awry

A few weeks ago, I recorded a podcast where I played both the role of interviewer and interviewee. The topic was about someone impersonating analysts to gain access to managers to ask questions during earning calls. I impersonated the impersonator as a joke as part of my new brand of “gonzo journalism.” Here is a new podcast that extends that nutty concept even further.

Unfortunately, a magazine ran this article entitled “Earnings call imposter gives interview” because the interview seemed all too real. Dominic Jones blogged about this snafu in his “IR Web Report.” One member asked if I have also interviewed DB Cooper?

– Broc Romanek