January 3, 2017

The DOL’s New Guidance on Proxy Voting & Shareholder Engagement!

Last week, the Department of Labor issued 19 pages of interpretive guidance on proxy voting & shareholder engagement, including the use of shareholder proposals. This guidance updates the DOL’s 2008 guidance in this area. While the new guidance is focused on ERISA funds, it provides affirmation to those investors engaged with companies on ESG issues. Some critics – like the Chamber of Commerce – have argued that some investors are violating their fiduciary duties when then spend time on climate change and diversity…

A Visionary Clawback Policy! (Bonus Edition)

I’m calling this a “bonus” edition blog because if you came to our executive pay conference a few months ago, you’ve heard a good deal of analysis about this visionary clawback policy from SunTrust Banks (I’ve all posted a version in Word in our “Clawbacks” Practice Area on Our expert panel on clawbacks – and what you should be doing now – covered that policy, the new Well Fargo one and others in detail. Come to our proxy disclosure conference in Washington DC this year!

Anyway, one of our panelists says that reading the SunTrust policy is just like reading “Gone With the Wind” – when you read it, you will laugh, you will cry. You will experience the whole range of human emotions. It’s a well-designed clawback policy, as it covers all incentives (time & performance-based) for all incentive eligible employees. It also allows a clawback for a wide range of issues – such as misconduct, theft, termination for cause, failure to perform duties and restatements to name a few. The clawback appears partly based on the banking regulators’ 2010 guidance that has a number of good principles-based recommendations that are relevant to users of incentive compensation in all industries. The company also has an internal “Events Tracking Group” that monitors incentive payouts – and the Group reports to the compensation committee regularly. SunTrust is one of the few companies that files their clawback policy as an exhibit to their SEC filings.

If you see a clawback policy that you like, let me know & I’ll add it to our samples posted in our “Clawbacks” Practice Area. Also check out these memos on the recent SEC v. Jensen case in the 9th Circuit about clawbacks under Section 304 of Sarbanes-Oxley…and this Covington blog for a high level thought piece on clawbacks…

Our January Eminders is Posted!

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Broc Romanek