October 25, 2011
Two More Failed Say-on-Pays: Up to 43 For the Year
Last week, two more companies failed to gain majority support for their say-on-pay, although one of the companies failed for the second time this year – further obscuring how to count how many failures there have been so far. In this Form 8-K, Synaptics reports that it received 44% in support. And then there’s this news from Ted Allen of ISS:
Hemispherx Biopharma, a micro-cap biotech firm based in Philadelphia, has failed to win majority support (based on votes present) for its executive compensation practices for the second time. The company, which restated its 2009 results, conducted its 2011 annual meeting on Oct. 13 after holding its 2010 meeting in March 2011. Hemispherx is the first issuer with a failed Dodd-Frank Act advisory vote to face shareholders again.
At the most recent meeting, as reported in this Form 8-K, the company said it received 44.1 percent support for its pay practices, while there was 37 percent opposition and 18.9 percent in abstentions. The company pointed out that there was “very little stockholder voting on this resolution, with only 20.7% of the outstanding shares eligible voted.”
The company’s CEO, William A. Carter, received a 72 percent base salary increase in 2012, according to the proxy statement, while the company has posted negative one-, three-, and five-year total shareholder returns. In its proxy statement, the company pointed out that the CEO agreed to a 50 percent reduction in base salary during the first five months of 2009. At the same time, the CEO’s 2010 salary and fees still represent a significant increase from the 2008 level, according to the ISS report on the company.
The company also said that its compensation committee had acted “to better align the compensation options with our stockholders’ interests in supporting long-term value creation.” Hemispherx pointed out that it renewed expired stock option grants for a 10-year term at the same exercise price of the original option grants, rather than at current market price, and the company said that future non-executive employee compensation could include company stock.
While Hemispherx shareholders used the advisory vote again to express concerns over pay, most of them did not withhold support from directors. The directors all were reelected by more than a 8-1 margin. Some institutional investors have said they may take a “red card/yellow card” approach and withhold support from directors in 2012 if companies fail to adequately address significant opposition during 2011 advisory votes.
A list of the Form 8-Ks filed by the “failed” companies is posted in CompensationStandards.com’s “Say-on-Pay” Practice Area.
Course Materials Now Available: Over 50 Sets of Talking Points!
For the many of you that have registered for our Conferences coming up in just one week, we have posted the Course Materials (attendees will receive a special ID/PW later today via email to access them; but copies will be available in San Fran). The Course Materials are better than ever before – with over 50 sets of freshly written talking points comprising 200 pages of practical guidance. Our expert speakers certainly have gone the extra mile this year!
For those seeking CLE credit, here’s a list of states in which credit is available for watching the Conferences live in San Francisco and by video webcast. Note that the list is broken out for each of the Conferences – and note two states are listed as “pending” (check back to determine if the Conferences are approved in those states).
Act Now: As happens so often, there is now a mad rush for folks to register for these Conferences that begin on Tuesday, November 1st. With an aggregate of over 50 panels (including the “19th Annual NASPP Conference“), if these Conferences don’t help get you prepared for the upcoming proxy season, nothing will. You can either register for the three days of the “19th Annual NASPP Conference” (in San Francisco) – or the two days of the “6th Annual Proxy Disclosure Conference” & “8th Annual Executive Compensation Conference” (in San Francisco or by video webcast, or a combination of both). Register Now.
Say-on-Pay in the UK
In this CompensationStandards.com podcast, Euan Fergusson of White & Case and Tony Gilbert of the Hay Group discuss how say-on-pay has fared in the United Kingdom, including:
– How did say-on-pay start in the UK?
– How does the UK say-on-pay regime differ in the UK compared to the US?
– What have been the most recent say-on-pay developments in the UK?
– Broc Romanek