March 20, 2012

Two More Say-on-Pay Lawsuits Dismissed: Jacobs Engineering and BioMed Realty Trust Win

As I blogged last week on’s “The Advisors’ Blog“: In our “Say-on-Pay” Practice Area, we have posted the court order issued last week in the Superior Court of California-LA that rules against the plaintiffs. We have also posted this week’s order from the US District Court for the District of Maryland dismissing the lawsuit against BioMed Realty Trust. As Mark Poerio notes in his blog:

The directors and officers of Jacobs Engineering, and their compensation consultant, have successfully challenged a complaint alleging that poor corporate financial performance made their authorization of significant pay increases for executives “unreasonable, disloyal, and not in good faith, and violated the Board’s pay-for-performance executive compensation philosophy.”

A Los Angeles Superior Court dismissed the complaint for failure to adequately allege either (1) demand futility or (2) facts sufficient to constitute their claim. Notably, the court observed that “The Dodd-Frank Act did not create any binding obligation on the Board” [through its advisory say-on-pay vote requirement], and that there was “no actionable misrepresentation alleged or culpability” alleged to support claims based on false disclosures in the company’s proxy statements.

Webcast: “What the Top Compensation Consultants Are NOW Telling Compensation Committees”

Tune in tomorrow for the webcast – “What the Top Compensation Consultants Are NOW Telling Compensation Committees” – to hear Mike Kesner of Deloitte Consulting, Jan Koors of Pearl Meyer & Partners, Blair Jones of Semler Brossy and Eric Marquardt of Pay Governance “tell it like it is. . . and like it should be.”

Time permitting, the panel hopes to tackle all of these topics during the program:

– Weaknesses in ISS’ P4P assessment
– How ISS over values options
– Whether to consider ISS’s peer group in addition to their own
– How to best demonstrate pay/performance alignment (like Jan’s “right” pay and “right performance”)
– Rethinking severance (contracts, benefits, etc.) in a P4P world
– Whether to ‘fight’ a ISS recommendation with supplemental materials, etc.
– How and when to move away from a relative TSR program
– Whether to implement a clawback if they haven’t already

Last week, 20 members of Congress sent this letter to the SEC urging the agency to prioritize the pay disparity rulemaking. As noted in this article, Sen. Robert Menendez – the author of Section 953(b) – is leading the charge…

Poll: How Many Companies Will Receive a “Failed” Say-on-Pay Vote in ’12?

Now that we’ve already had one failed vote in 2012 – please take a moment to participate in this anonymous poll and express how you read the tea leaves for the number of failed say-on-pays to befall companies this year (last year, there were over 40 – many more than I expected, evident by how much I vastly underestimated the range of choices in last year’s poll):

Online Surveys & Market Research

– Broc Romanek