I will be out of the office traveling from Wednesday, January 29th through Friday, January 31st. I will be periodically checking email and responding as necessary.
Thanks,
Dale
>>> "Drake, Carol" <cdrake@opers.org> 01/31/14 09:37 >>>
Thank you for the question, Amy,
>From the OPERS Board of Trustees' Proxy Voting Guidelines, we have included language to hold the members of the Compensation Committee accountable if compensation practices are not aligned with shareowner value:
Board of Directors
Boards of Directors are shareowners' representatives at the company. As
such, OPERS believes Directors should be held accountable for the
consistent implementation of the best practices standards outlined in
these Guidelines. This accountability will vary from director to director,
depending on the director's role on the board and on various committees.
For instance, if executive compensation is excessive relative to
performance, the directors on the Compensation Committee should be
held accountable for the poor implementation of compensation practices
and policies that link pay to performance for the purpose of building
sustainable, long-term shareowner value.
Compensation Committee
One key measure of board performance is how effectively the
company's executive compensation practices and policies link
pay to performance for the purpose of building sustainable,
long-term shareowner value. OPERS believes executive
compensation should be linked directly with the performance
of the business the executive is charged with managing, it
should not have an unreasonable annual cost, and it should
be benchmarked against appropriate peer groups. The
compensation committee should develop, approve, monitor,
and disclose the company's compensation philosophy with
respect to the entire range of pay elements including, mix of
cash and equity awards, goal for distribution throughout the
company, use of employment contracts, perquisites,
supplemental executive retirement plans, and philosophy
regarding dilution. The compensation committee should also
be authorized to retain outside advisors. Equity compensation
plans and material revisions to those plans must now be put to
shareowner vote for approval....
If the Comp Committee failed to effectively evaluate executive compensation practices, OPERS would generally vote to Withhold from the directors on the Committee. In 2012, staff voted with management 83.6% of the time on Advisory Votes on Executive Compensation. Staff Withheld or voted Against the election of board members 20.6% of the time. The 2013 stats are being reviewed soon. If you have any questions, please let me know. Our sense is that companies that have had failed Say on Pay votes will need to take measurable steps to avoid more significant Withhold or Against director votes this coming proxy season. Thanks,
CND
Carol Nolan Drake, J.D.
Chief External Affairs Officer
Ohio PERS
277 East Town Street
Columbus, OH 43215
cdrake@opers.org<mailto:cdrake@opers.org>
Mission: Our mission is to provide secure retirement benefits to our members.
From: Amy Borrus [mailto:amy@cii.org]
Sent: Thursday, January 30, 2014 3:35 PM
To: CII's Email Discussion Group
Cc: Amy Borrus
Subject: [ciidiscussion] Voting against compensation committee directors
CII staff seeks a better understanding of what drives members' votes and what trends to anticipate for the 2014 proxy season. With that in mind: Do you expect in 2014 to withhold/vote against more compensation committee directors at companies that had poor say-on-pay results in one or more years in the past? And if so, why?
Thanks very much!
Amy
Reminder-how to post on this members-only listserv: Just send an email addressed to ciidiscussion@cii.org<mailto:ciidiscussion@cii.org> and it will be distributed automatically to all members who subscribe to the listserv.
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