There aren’t any surprises, at least when it comes to executive and stock compensation. ISS didn’t make any changes specific to stock compensation and the only change that relates to executive compensation is that they’ve changed the Relative Degree of Alignment measure to be a three-year calculation only, rather than a weighted average of the one and three-year calculations.
Six Degrees of Kevin Bacon
The Relative Degree of Alignment measure doesn’t have anything to do with Kevin Bacon (although it might be argued that it would be a lot more interesting if it did). Instead, as I noted in my blog on ISS’s proposed changes (“ISS Policy Changes for 2014,” October 29, 2013), it simply compares the company’s TSR ranking among its peers to its CEO pay ranking. Ideally (from ISS’s perspective, that is–your CEO might feel differently), your company will have a high TSR ranking and a CEO pay ranking that is equal to or lower than its TSR ranking. A low TSR ranking and a high CEO pay ranking will result a negative RDA and probably a lot more attention from ISS than you’d like.
What’s Changed
The old calculation averaged the one-year RDA and the three-year RDA with a respective weighting of 40/60. The new calculation is just the three-year RDA.
Why Change?
Because the most recent year was included in both the one-year and three-year calculations, the prior RDA measure placed significant emphasis on this year. By eliminating the one-year RDA measure, the most recent year will be deemphasized in favor of the longer three-year period. As a result, short-term changes in TSR and CEO pay rankings will have a smaller impact on this aspect of ISS’s analysis. ISS also notes that the longer term calculation will help alleviate timing mismatches in pay for performance that result from equity awards being issued early in the fiscal year, before the corresponding performance year.
No Burn Rates Yet
The burn rate tables aren’t available yet. I expect them some time in mid to late December. Hmmm, maybe I’ll be able to get three blog entries out of this whole policy update.
Don’t Miss Your Chance to Update Your Peer Group with ISS
The companies that ISS considers to be your peers are critical for the RDA measure as well as numerous other analyses that ISS performs. ISS will consider your self-selected peers when constructing your peer group. You have until December 9 to let ISS know which companies are in your self-selected peer group. For more information see, ISS’s Peer Group Methodology FAQ. You can submit your peers and any other feedback you have for ISS on your peer group at http://www.issgovernance.com/PeerFeedbackUS.
ISS has proposed changes to its corporate governance policy for 2014. You have until November 4 to comment on the changes.
What’s Changed?
In terms of stock compensation, or even compensation in general, not much. So the good news is this maybe isn’t something you have to spend a lot of time on this year and I can have a short blog entry today. Of course that’s also the bad news–things aren’t going to get any better next year in terms of the restrictions ISS places on your stock compensation program.
Evaluating Alignment of Pay to Performance
The only proposal that relates directly to compensation that ISS is looking at changing is the Relative Degree of Alignment (RDA) measure, which compares the difference between a company’s TSR ranking and its CEO’s pay ranking among its peers. For example, if the company’s TSR ranks in the 25th percentile among its peers (meaning that the company’s TSR is better than only 25% of its peers) and its CEO’s pay is in the 75th percentile (i.e., the CEO’s pay is more than 75% of his/her peers), ISS might be concerned that there is a pay for performance misalignment. This is just one of several measures ISS uses to assess whether CEO pay aligns with company performance.
Currently ISS calculates RDA on a one-year and three-year basis. They are proposing to eliminate the one-year calculation and instead consider only three-year RDA. If your RDA score has been trending downwards, you are probably pleased as punch about this; if your RDA score has been trending upwards, you are probably a little less thrilled (but what goes up most come down and, under the proposed calculation, if you do have a down year, that year won’t impact your RDA score as much).
I’m a San Diegoan at heart, and, as I write today, I’m thinking about a picture taken last year on a beautiful beach day. The water was sparkly, reflecting the bright sun. The beaches were filled with sunbathers. Someone snapped a photo of this perfect day, and accidentally captured something amazing – the image of a shark swimming through a wave, virtually unnoticed. People were smiling, nobody seemed to have a care in the world. That day ended well – it seems no one was bitten by the shark, and people probably didn’t even understand the potential danger until they saw that image later that evening on the news. So why on earth am I talking about sharks in this equity compensation blog? Well, as you’ve probably garnered by now, I’m drawing a parallel to an issue I feel is looming, somewhat under the radar, for many companies.
Stock Plan Sharks
You’ve probably heard the buzz over the past year or so about a wave of litigation surrounding say-on-pay and proxy proposals. The litigation, in short, has been brought as a series of class action suits by shareholders who want to see more information disclosed in the proxy around various proposals that are being submitted to shareholders for a vote. Many of these proposals involve stock plans (approval of a stock plan, increasing shares in an existing plan, and so on). The theory behind the lawsuits is that that shareholders have a right to be fully informed before they vote. The claim is that proxy statements lack a complete and full disclosure of material information that would aid in the shareholder’s ability to make an informed decision. In the past year there have been 21 of these cases filed. Of those, 10 cases were “successfully resolved” according to the plaintiff’s lawyer (successful meaning they resulted in a preliminary injunction or restraining order, which paved the way to an acceptable outcome). While 21 may seem to be a small number, keep in mind that this is the actual number of cases “filed” with a court. There have been many more instances where companies have received a letter from plaintiff’s attorneys, which ultimately opens a door that most companies would prefer remain closed.
Although many companies seem to have cognizance of these lawsuits, it seems that most still think “it can’t happen to us”. There have even been rumors that the litigation is dead. If you’re thinking those thoughts, think again. These lawsuits appear to be far from dead. In fact, in a unique set of circumstances at this year’s annual conference, we had both the plaintiff’s attorney and defending attorneys at front and center in these lawsuits come together to share their perspective on these suits.
The session was interesting, and I can’t do it full justice in this blog (the materials are available online for conference attendees, and the audio is available for purchase). However, I wanted to raise awareness of this concern and share some of the “red flags” that the plaintiff’s attorney shared during this session.
An Invitation to a Plaintiff’s Attorney?
Share Increases: Increasing the number of shares in an equity plan? Plaintiffs attorneys are scouring proxies to see if companies have disclosed information such as any projections that helped determined the number of shares to request.
Consultants: If the company or board hires a consultant who uses things like analysis of “share value transfer” in their assessment, and the board evaluates or relies on that information in making compensation decisions, then that information should be disclosed in the proxy.
Peer Groups: If the board determines that executive compensation should be based on peer group data points, then plaintiff’s attorneys are looking for information on the companies in the peer group, the metrics evaluated (e.g. number of employees, enterprise value), and any performance metrics, such as TSR.
Now, before you shoot the messenger – I’m not taking a stance advocating these disclosures. I’m relaying what I heard the plaintiff’s attorney identify as “red flags” when they are looking at proposals and evaluating proxy statements. If you have items going before shareholders in a vote this upcoming proxy season (yes, the proxy is months away for calendar year-end companies, but proposals are likely to be discussed in the near-term), then you absolutely want to be aware that plaintiff’s attorneys are going to look at your proxy through this lens.
Advance Mitigation
You know the sharks are out there – now what? Before I answer that, I just have to disclose that the term “shark” was borrowed from the panel’s own chosen title – so I’m not labeling anyone a shark, and I certainly appreciated the entire panel’s contribution to our conference. Now, back to the sharks and how to avoid them – there are a few suggestions that I gleaned from the presentation:
Consider including more disclosure (if it won’t hurt, it might make you appear to be a less easy target)
Advise your board of directors that a proxy proposal could result in litigation
Consider getting 3rd party advice on how to size your equity pool
Additional details, such as insight about what to do if your company is contacted by a plaintiff’s attorney can be found in the materials and audio for the conference session titled “Stock Plan Proposal and Say-on-Pay Litigation: How to Avoid the Sharks”. This is definitely an area where companies should focus some attention as they prepare for the 2014 proxy season.
Thanks to panelists Douglas Clark and David Thomas of Wilson Sonsini Goodrich & Rosati, Juan Monteverde of Faruqi & Faruqi, and John Grossbauer of Potter Anderson & Corroon for the content that I used in writing this blog.
NASPP: What is the most critical thing NASPP Conference attendees need to know about your topic?
Wendy: Proxy strategy is not one size fits all, and smaller companies–whether small reporting companies, emerging growth companies, or mature small cap companies–may have to work harder, and more creatively, to communicate their compensation message. Smaller companies face very different compensation issues than larger cap companies, including:
Delivering equity compensation value when stock price is less than a few dollars and the stock is thinly traded or volatile,
Creating meaningful cash-based performance incentives when budgets are tight, and
Recruiting in a talent pool that includes both pre-IPO and large cap executives.
Smaller companies must then craft an individual approach to communicating their decisions in the proxy, given the scaled down reporting rules applicable to SRCs and EGCs, the different shareholder base who will be reading the proxy, and the tests designed by proxy advisory services that don’t account for the special circumstances of small cap companies. This panel has first hand experience helping smaller public companies make the hard decisions on compensation design, understand the reporting optics of these decisions, and then effectively communicate these decisions in the proxy and in pre-meeting shareholder outreach campaigns.
NASPP: What common mistake do companies make and how can they avoid it?
Wendy: Smaller public companies often feel compelled to use buzz words like “performance” or follow the compensation decisions or disclosure practices of other companies who are current or perhaps aspirational peers. In doing so, smaller companies lose the real message of their program and sometimes come across as talking the talk but not walking the walk. To have a meaningful proxy disclosure, the compensation team must be willing to have open, frank, fully informed discussions with management and the board, providing information beyond benchmark numbers and statistics on the frequency of a given policy or disclosure. At the time compensation decisions are made, smaller companies must consider how their decisions will be viewed not only one or two years from now but as part of a longer term trend of the direction of their executive compensation program.
NASPP: What is the silver lining to your topic?
Wendy: Compensation strategy is like a giant ocean liner. Rarely is it too late to avoid the iceberg ahead–but it does take time, good tools, and lots of preparation to steer the ship onto a different course.
NASPP: Tell us three things people don’t know about you.
Wendy:
After law school, I drove in an 18-wheeler cab–without a trailer attached–from Seattle to Banff, and the Canadian border patrol didn’t know what to make of it.
I learned freestyle wrestling in college from US Olympic team members as a club sport and I can still perform a headlock-hiptoss (although I risk throwing out my back at this point).
I still remember, from my 9th grade final exam, and can sing a glowing rendition of “La Marseillaise” in French. But I can’t remember how to order dinner or have even a basic conversation.
Realizable pay has quickly emerged as a hot topic for this proxy season. In today’s blog, I offer a few thoughts on realizable pay as it relates to stock compensation.
Why Realizable Pay?
Realizable pay has emerged as a method for evaluating whether executive pay aligns with company performance. It’s an alternative to comparing company performance to total pay as disclosed in the Summary Compensation Table. For equity awards, pay is disclosed in the SCT at grant and is based on the grant date fair value. Arguably, the pay disclosed in this table is for future performance, not current performance. Also, the grant date fair value is not necessarily a predictor of how much compensation execs will actually receive under the arrangement.
Realizable pay, however, is based not on grant date fair value but on the current value of the company’s stock. Thus, where equity awards are a significant component of executive pay, realizable pay can make for a more compelling story for shareholders: high levels of realizable pay are likely the result of an elevated stock price, which in turn probably means that the company is performing well. On the other hand, poorly performing companies have lower stock prices, resulting in underwater stock options and low levels of realizable pay.
What Is Realizable Pay?
Realizable pay is not a mandated disclosure, so there is no standard definition for it. Generally, it can be expected to include cash compensation paid during the year, plus the intrinsic value of options and awards held by the executive. But, of course, it’s more complicated than that.
Which awards/options? Awards typically vest and pay out in three to four years, but options can be outstanding for up to ten years. The standard that is emerging seems to be to include only options and awards granted within a specified period (e.g., three years). The idea is that the grants that are generating the company’s current performance are the ones made in recent years; grants made earlier generated performance in an earlier time frame.
Vested and Unvested? Technically, executives can really only realize the value of options and awards that are vested. Most companies, however, seem to include both vested and unvested options and awards in realizable pay.
Performance Awards? Where execs hold performance awards, a decision also need to be made as to whether to include these awards at threshold, target, or maximum. These awards could also be included at the level at which they are currently expected to pay out, but companies may be uncomfortable with this approach as it potentially signals management’s expectations as to future company performance.
When Is Realizable Pay Not Realizable?
When ISS calculates it, of course. ISS includes the current Black-Scholes value of options in realizable pay, rather than just their intrinsic value (see “Proxy Advisor Policies for 2013,” November 27, 2012). The Black-Scholes value is generally always going to be higher than the intrinsic value (think fast: ten points if you can name two situations where the Black-Scholes value would not be significantly higher than intrinsic value), so this has the effect of increasing the pressure to outperform peers.
If you are an issuer that will be submitting a request for additional shares for your stock plan to a shareholder vote in the upcoming proxy season, you need to read this blog. I’m filing this under “don’t say I didn’t warn you.”
What Does Martha Stewart Have to Do With This?
A while back, a short blurb about Martha Stewart Living Omnimedia caught my eye and I put it in my back pocket for a future blog entry if I ever figured out what the heck it was about. The blurb appeared in Mark Borges’ proxy disclosure blog on CompensationStandards.com:
Martha Stewart Living Omnimedia Inc. was the target of a shareholder class action lawsuit alleging that the company’s disclosure in connection with a proposal to increase the share reserve of its omnibus stock plan was inadequate.
This intrigued me because:
In my other, non-stock compensation life, I secretly want to be Martha Stewart (but with better hair and no insider trading scandal), so I’m fascinated by anything involving her. (Don’t scoff–I’m very crafty! I make all my own window treatments, can refinish a dining room table, and can whip up some pretty tasty jams and jellies.)
It involved the company’s stock plan, which falls squarely into the category of “things I care a lot about.”
Now, thanks to Mike Melbinger’s Oct 26 blog entry on CompensationStandards.com, I’ve finally figured out the implications of the lawsuit and determined that, if you are an issuer, it should be something you care a lot about as well.
Lawsuit Over Stock Plan Disclosures Could Delay Shareholders Meeting
There have now been several similar lawsuits filed. The lawsuits allege that the company’s disclosures relating to stock plan or Say-on-Pay proposals are inadequate and seek to delay the shareholders meeting. As Mike explains it:
[Companies] are forced to decide between (a) paying the class action lawyers hundreds of thousands of dollars of attorneys’ fees and issuing enhanced disclosures or (b) fighting the matter through a preliminary injunction hearing, which may have the effect of delaying [their] shareholder meeting (and create additional legal fees).
One company has already paid $625K to plaintiff attorneys to settle a similar lawsuit and, while they didn’t have to delay their entire annual meeting, they still had to delay the vote on their stock plan and file a supplement to their proxy statement with additional disclosures about the plan.
What Can You Do?
Mike asks “Does that sound like Armageddon?” and I’d say that it sure sounds like that me. Mike says that it is too soon to panic but suggests taking extra care in drafting your disclosures relating to any stock plan proposals and your Say-on-Pay propoals. A recent memo we posted from Orrick has suggestions for fortifying both types of disclosures against attack. Here are their suggestions for disclosures relating to any stock plan proposals:
Disclose the number of shares currently available for issuance under the stock plan and explain why the existing share reserve is insufficient to meet future needs. Consider citing your current burn rate and anticipated shares needed for new grants over the next year.
Explain how the remaining shares in the reserve and the new shares will be used and how long the new share reserve is expected to last.
Describe how you determined the number of shares you are requesting approval of.
ISS has issued a draft of proposed updates to its corporate governance policies for the 2013 proxy season.
Speak Your Mind–But Be Quick About It
If you have an opinion on the draft that you’d like to express to ISS, you need to get your comments in by October 31. I know you’re thinking that maybe I could have mentioned this a little sooner, but actually, I couldn’t have. The draft was just released last week, after my blog was published. If you follow the NASPP on Twitter or Facebook, however, you at least knew about the draft by last Thursday, when we posted an NASPP alert on it.
You Probably Don’t Have a Lot to Say Anyway
The quick turnaround time for comments probably isn’t a problem because my guess is you aren’t going to have much to say about the proposed changes. ISS is proposing only three changes on their policies relating to executive compensation and only one of those changes relates directly to stock compensation. Here are the proposed changes:
New methodology for determining peer groups
Qualitative analysis will consider how “realizable pay” compares to grant date pay
Allowing executives to pledge company stock will be considered a problematic pay practice
Peer Groups
ISS’s determination of peer groups is critical to their analysis of whether CEO pay aligns with company performance. ISS puts together a peer group of around 14 to 24 companies (I have no idea why 14 to 24 and not, say, 15 to 25–that’s just what ISS says): if your CEO’s pay outpaces the peer group by more than the company’s performance, ISS perceives a possible pay-for-performance disconnect. As noted in my blog “Giving ISS an Earful” (August 14, 2012), the peer group methodology was already an anticipated target for change in this year’s policy.
Up to two years ago, ISS based peer groups solely on GICS codes. Last year, ISS updated it’s policy to base peer groups on revenue and market capitalization, in addition to GICS codes. This year, ISS is further refining peer identification to take into account the GICS codes of the company’s self-selected peers.
Realizable Pay vs. Grant Date Pay
If you follow Mark Borges’ Proxy Disclosure Blog on CompensationStandards.com, you know that a number of companies have been comparing the grant date pay disclosed in the Summary Compensation Table to “realizable pay.” Grant date pay, is, of course, the fair value of awards at grant. Realizable pay is a calculation of how much the executives could realize from their awards as of a specified point in time (usually the end of the year). As I’m sure my reader’s can imagine, the values are usually very diffferent.
Where ISS perceives a pay-for-performance disconnect, it will perform a more in-depth qualitative analysis of the CEO’s pay. In this year’s policy, ISS is proposing to include “realizable pay compared to grant pay” in that analysis.
ISS doesn’t provide any further information, such as what might be considered a favorable comparison or even how “realizable pay” will be determined. In taking a quick gander at the realizable pay disclosures Mark has highlighted recently in his blog, it seems that there is significant variation in practice as to how companies calculate this figure. Some look at pay realizable only from options and awards granted during the current year, others look at all outstanding options and awards, and others look at options and awards granted within a specified range (e.g., five years). I’m not sure whether ISS will perform its own realizable pay calculation (and whether it would have sufficient information to do so) or just accept the number disclosed by the company (assuming a company chooses to make this voluntary disclosure).
More Information
For more information on ISS’s proposed policy updates, including their discussion of the policy around pledging and proposed changes to their policy for Say-on-Parachute-Payment votes, see the NASPP alert “ISS Draft of 2013 Policy Updates.”
If you have concerns or comments that you’d like to voice to ISS about their policies, now is your chance. ISS’s policy survey, the responses to which will be used to formulate their corporate governance policies, is open through the end of this week (Friday, August 17). Speak now or forever hold your piece (well, not really “forever,” presumably they’ll do another survey next year).
This Year’s ISS Policy Survey
The only questions on the survey I noticed that directly address stock compensation were a couple of questions that ask about single-trigger acceleration of vesting of stock awards in the event of a change-in-control. A few other topics in the survey that could indirectly have an impact on stock compensation include:
ISS’s determination of peer groups
How pay should be measured (always a challenge for stock compensation)
Types of performance metrics (e.g., TSR vs. internal metrics)
A few last topics ISS focuses on in the survey that could have an even more indirect impact on stock compensation include director qualifications, director independence, and pledging (e.g., allowing executives to use company stock as collateral for margin accounts or other loans). There also were a bunch of topics that fall under the heading of “Things I Don’t Care About,” so I didn’t read those questions (e.g., corporate lobbying, proxy access, sustainability performance measures).
A Preview of Policy Changes to Come?
The issues covered in the survey are likely indicative of the areas where ISS is considering revising its corporate governance policies for next year–otherwise why would they be asking about these topics? ISS changed its peer group determinations as part of last year’s overhaul of the pay-for-performance analysis (see my blog entry “ISS Policy Updates for 2012,” November 29, 2011); now it looks like ISS may be considering further changes to peer groups. (But probably only for the pay-for-performance analysis; ISS didn’t change peer groups for burn rate purposes last year so I don’t think they’ll change burn rate peer groups for this year either.)
Next Steps
The ISS survey will close this Friday. ISS will hold round-table discussions of the topics covered in the survey during August and September and expects to release the survey results in September. ISS will then accept comments on the results until October and will release its final policy update in November.
We are now well into the second season of Say-on-Pay voting. In today’s blog, I provide an update of the voting thus far.
Turn-Around of the Year?
It’s probably a little too early in the season to award the title for “Turn-Around of the Year,” but Umpqua Holdings looks like a strong contender. Last year, their Say-on-Pay vote received only 35% support–an emphatic message of disapprobation from their shareholders. Their vote this year was of interest to me because they were one of the companies that modified options and awards granted to their officers to be subject to performance conditions (see my April 2, 2011 blog, “Happy Birthday, Dodd-Frank“). The modification was in response to last year’s Say-on-Pay vote, so I was curious to see if this year’s vote went any better. It did–this year’s vote received 95% support.
The turnaround was not entirely attributable to the grant modifications; Umpqua also did a significant amount of outreach to its shareholders and implemented some other programs (including a policy that at least 50% of all equity awards to executive officers must be performance based), but the modifications surely were a factor. In their discussion of their response to last year’s vote, the grant modifications are the second item that Umpqua mentions.
Citigroup
The most notable failure so far has been Citigroup. The vote has caused such a splash that I feel obliged to mention it, but to be honest, I got nothin’ on it. As far as I can tell, the failure didn’t have anything to do with Citigroup’s stock compensation program, putting it squarely in the category of “things I don’t really care about.” I’ve read speculation that the failure had more to do with dissatisfaction with the banking industry than with Citigroup’s executive compensation programs.
Funny Numbers
This year’s Say-on-Pay vote for Cooper Industries may prove that it doesn’t pay to get cute with your Say-on-Pay vote. Last year, Cooper Industries reported that their Say-on-Pay vote passed with 50.4% support. But, to achieve this, Cooper chose not to count abstentions as “against” votes. This is legally permissible and handy for Cooper because if the abstentions had been counted as “against” votes, their Say-on-Pay proposal would have failed last year.
But, in the end, their decision about how to count abstentions earned them only a short reprieve–this year’s Say-on-Pay vote failed with 70.6% of the votes cast against the proposal.
The Round-Up
According to Mark Borges’ Proxy Disclosure Blog on CompensationStandards.com (my #1 source for the most recent Say-on-Pay vote tabulations), there have been seven Say-on-Pay failures in the 2012 proxy season as of yesterday. As of May 2, 2011, there had been eleven failed Say-on-Pay votes, so companies this year seem to be faring slightly better (unless there are four more failures by tomorrow). Of the seven failures this season, only one failed last year (I believe Mark is counting Cooper Industries as a failure in 2011, despite how they counted their own vote). Three of the failures (Citigroup, FirstMerit, and International Games) had received strong support (over 80%) for their Say-on-Pay votes in 2011.
NASPP “To Do” List We have so much going on here at the NASPP that it can be hard to keep track of it all, so we keep an ongoing “to do” list for you here in our blog.
Register for the 20th Annual NASPP Conference in New Orleans. Don’t wait, the early-bird rate is only available until May 31.
Register for the NASPP’s newly updated online Stock Plan Fundamentals program–it’s not too late to get into the course; the first three webcasts have been archived for you to listen to at your convenience.
Last week, on April 5, President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. Intended to make it easier for startups to raise capital and go public, JOBS has three primary thrusts: 1) making it easier to raise capital (including “crowdfunding” and unregistered offerings), 2) making it easier for companies to go public, and 3) making it easier for newly public companies to be public (e.g., reduced public reporting). Today I begin looking at the provisions of JOBS that are relevant to stock compensation.
Reduced Disclosures for EGCs
JOBS creates a new category of company, an “Emerging Growth Company.” An EGC is essentially a company with less than $1 billion in revenues that is private or has been public for less than five years (I’m simplifying this, there are a couple of other requirements). In addition to provisions designed to encourage investment in EGCS and allow them to explore an IPO without filing a public registration statement, JOBS also reduces the public disclosures and reporting EGCs are subject to.
In the context of compensation, EGCs are allowed to comply with the executive compensation disclosures required for smaller reporting companies (companies with a public float of less than $75 million or, if unable to calculate public float, revenues of less than $50 million). This results in the following changes to their disclosures:
Disclosure for only top three, rather than top five, NEOs
No CD&A
Only two years reported in Summary Compensation Table
Fewer tabular disclosures: only the SCT, Outstanding Equity Awards at Fiscal Year-End Table, and Director Compensation Table
Dodd-Frank “Light”
EGCs also don’t have to comply with some of the provisions of the Dodd-Frank Act, including:
Say-on-Pay, et. al.
CEO pay ratio disclosure
Disclosure relating executive pay to company financial performance
Of course, right now, there aren’t any companies required to comply with the CEO pay ratio and executive pay for performance disclosures because the SEC hasn’t promulgated rules on these yet. JOBS only adds to the long list of SEC rule-making projects and I’ve read speculation that the SEC won’t make the deadlines under JOBS because of Dodd-Frank and other rulemaking projects that are still outstanding.
I also find it ironic that, just 21 months after Congress decided that shareholder advisory votes on executive compensation were a critical component of an effective corporate governance system, that policy has now taken a back seat to other considerations when it comes to recently-public companies.
Finally, I can’t quite get my head around the reasoning for exempting emerging growth companies from the CEO pay ratio requirement. It was my understanding that the complaints of the business community that the provision is too burdensome were falling on deaf ears in Congress. Yet, it appears that Congress has just decided that the provision is too burdensome for newly-public companies – a group that, ostensibly, doesn’t face the same compliance challenges of large, global companies.
Stay tuned; next week I’ll discuss the new shareholder thresholds for required registration.
NASPP Conference Early-Bird Rate Ends on Friday The early-bird rate for the 20th Annual NASPP Conference ends this Friday, April 13. This rate will not be extended, so don’t wait any longer to register.
Online Fundamentals Starts on Thursday The NASPP’s acclaimed online program, Stock Plan Fundamentals, starts this Thursday, April 12. This is a great program for anyone new to the industry. Register today so you don’t miss the first webcast.
NASPP “To Do” List We have so much going on here at the NASPP that it can be hard to keep track of it all, so we keep an ongoing “to do” list for you here in our blog.
Register for the NASPP’s newly updated online Stock Plan Fundamentals program–don’t wait; the first webcast is this Thursday.
Register for the 20th Annual NASPP Conference in New Orleans. The early-bird rate is only available through this Friday, April 13.