October 10, 2012

Survey Results: Use of Proxy Solicitors

Much discussion here at our Conferences about the role of proxy solicitors during the say-on-pay process (here is the video archive from yesterday’s “The Say-on-Pay Workshop: 9th Annual Executive Compensation Conference”). Here are survey results on the use of proxy solicitors:

1. Does your company use a proxy solicitor for the proxy season:
– Yes, every year – 64.9%
– Only in years of special need – 24.3%
– No, we don’t use proxy solicitors – 10.8%

2. If a proxy advisor (ie. ISS/Glass Lewis) recommended a vote ‘against’ your company’s say-on-pay proposal, your proxy solicitor’s SOP projection (at record date vs. final voting results) was:
– Less than 3% (small margin between what estimated and what occurred) – 4.2%
– Within ± 3% – 5% – 16.7%
– Within ± 5% – 10% – 8.3%
– Within ± 10% – 15% – 12.5%
– More than 15% (large margin) – 0%
– Other/Don’t know – 58.3%

3. If your proxy solicitor’s say-on-pay projection substantially missed the mark during your latest proxy season, do you feel it was:
– Likely due to a good reason (eg. unforeseen circumstances) – 18.2%
– Not likely due to a good reason (ie. they just blew it) – 9.1%
– Don’t know – 72.7%

Please take a moment to participate in this “Quick Survey on Conflict Minerals” and this “Quick Survey on Delegation of Authority.”

Day Trading During Proxy Contests

In this podcast, Chuck Nathan of RLM Finsbury discusses an interesting – and potentially novel – situation in a proxy contest in which The Clinton Group (led by Greg Taxin, formerly a Glass Lewis founder) is seeking to remove 6 out of 7 directors through a written consent campaign and replace them with five new directors of Clinton’s choosing. Clinton seems to be day trading Wet Seal stock, which may be the first instance in which an activist investor day traded the stock of a company during a proxy contest it was sponsoring.

An Update for Internal Audit Standards

Recently, the Institute of Internal Auditors (IIA) announced changes to the International Standards for the Professional Practice of Internal Auditing Standards effective January 1st. In total, 18 revisions were made.

– Broc Romanek