ON Securities

Responding to the Yahoo Resume Debacle

Martin Rosenbaum — Tue, 15 May 2012 21:42:20 -0600

As reported by Bloomberg this week, Scott Thompson, the CEO of Yahoo since January, was forced to resign after it was discovered that he did not in fact obtain one of the college degrees listed in Yahoo’s reports. To make matters worse, a discrepancy was also discovered in the reported educational background of Patti Hart, the Chair of Yahoo’s Governance Committee and the search committee that evaluated Thompson. She will not seek re-election at the Yahoo annual meeting this...

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Perspectives on Citigroup's Negative Say-on-Pay Vote

Martin Rosenbaum — Tue, 01 May 2012 19:41:16 -0600

As the 2012 proxy season kicks into high gear, Citigroup’s negative Say-on-Pay vote a couple of weeks ago remains the big story. Because of Citigroup’s size and prominence, the vote received a lot of commentary in newspapers and blogs. As Mark Borges pointed out in the Proxy Disclosure Blog on CompensationStandards.com (subscription site): This turns out to be Citigroup's fourth "Say on Pay" vote since 2009 - the first two were as a participant in the Troubled Asset...

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What Should Public Companies Know About the JOBS Act?

Martin Rosenbaum — Mon, 16 Apr 2012 21:44:36 -0600

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups (JOBS) Act (PDF), which increases the ability of companies to access capital without registration under the Securities Act and encourages initial public offerings of "emerging growth companies." For those of you who have only received 500 law firm alerts about the JOBS Act and are anxious to read your 501st, you should review the Maslon Legal Alert, which is refreshingly short. The JOBS Act focuses mainly on...

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Say-on-Pay Votes: New Resources Make It Easy to Keep Score

Martin Rosenbaum — Sun, 01 Apr 2012 21:34:15 -0600

The Semler Brossy compensation consulting firm is publishing a very useful resource for those of us who want to “keep score” on the results of Say-on-Pay votes in 2012. “2012 Say on Pay Results” is a weekly publication of the cumulative results of Say-on-Pay shareholder advisory votes at Russell 3000 public companies. The most recent report includes the following stats: The majority of companies continue to pass Say-on-Pay in 2012 with substantial shareholder...

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Risky Business: What If the CEO Has a Risky Hobby?

Martin Rosenbaum — Thu, 22 Mar 2012 21:58:18 -0600

The death of Steven Appleton, the CEO of Micron Technologies, in the crash of his experimental plane last month highlighted the issues faced by companies whose CEOs have risky hobbies. What are the board’s duties in that situation? And what disclosure issues are presented? In a Wall Street Journal article last week, “Executive No-Fly Zone?”, Joann Lublin pointed out that, in these cases, many boards of directors would like to prevent the CEOs from flying stunt planes. In the...

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Survey Results Reveal Attitudes About Pay Equity Disclosure

Martin Rosenbaum — Thu, 08 Mar 2012 22:13:02 -0600

According to a recent survey about the “pay equity” disclosures that will be required in future public company proxy statements, most respondents believe the requirement will be fairly burdensome, but many respondents haven’t spent much time figuring out specifically how their companies will comply. Broc Romanek reported on the results of the survey, conducted by TheCorporateCounsel.net, today in the Advisors’ Blog on CompensationStandards.com (subscription...

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The Psychology of Equity Awards - A Compensation Consultant's View

Martin Rosenbaum — Thu, 23 Feb 2012 21:29:01 -0600

This time of year, many public companies are drafting the Compensation Discussion and Analysis section of their proxy statement, including a description of how the company’s executive compensation program aligns the interests of executives with those of shareholders. But do the elements of compensation always have the desired effect? Not according to one compensation consultant. Jim Sillery of Buck Consultants today gave an entertaining presentation to the Twin Cities Chapter of the...

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Incentive Design Study Sheds Light on Compensation Practices

Martin Rosenbaum — Thu, 16 Feb 2012 21:56:53 -0600

As we approach the second proxy season featuring Say-on-Pay votes, public companies are under increasing pressure to describe how executive pay is tied to company performance. The compensation consulting firm James F. Reda & Associates recently issued its “Study of 2010 Short- and Long-Term Incentive Design Criterion Among Top 200 S&P 500 Companies” (PDF). This study provides a good snapshot of the types of practices large companies used in 2010 (reported in 2011 proxy...

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Facebook IPO Includes Insider-Friendly Corporate Governance Provisions

Martin Rosenbaum — Thu, 02 Feb 2012 16:35:53 -0600

As nearly everyone knows by now, Facebook, Inc. filed its initial registration statement yesterday with the SEC, leading toward an initial public offering. As the filing reveals, Facebook’s corporate structure includes some corporate governance provisions that founder Mark Zuckerberg and other insiders are certain to “Like”. In a post on the DealBook Blog, “A Big Bet on Zuckerberg,” Steven Davidoff reports that Facebook, Inc. is structured to give Zuckerberg a...

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"Sue-on-Pay" Litigation Update: The Good News and the Bad for Boards

Martin Rosenbaum — Thu, 26 Jan 2012 17:49:22 -0600

In recent weeks, there have been several important developments in litigation against companies that have experienced negative Say-on-Pay votes – what I refer to as “Sue-on-Pay” cases. It’s a good time to put these events into perspective. For public companies concerned about the adverse consequences of a failed Say-on-Pay vote, the recent litigation developments present a classic “good news - bad news” situation. The good news for corporate boards is that...

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A Tally of "Say When on Pay" Votes in 2011

Martin Rosenbaum — Wed, 18 Jan 2012 15:48:14 -0600

With 2011 behind us, it’s interesting to look back at the results of public companies’ “Say When on Pay” shareholder advisory votes regarding the preferred frequency of Say-on-Pay votes, as required under the Dodd-Frank Act. Numerous commentators, including me, spent a lot of time last year “watching the scoreboard” last year – would companies recommend an annual, biennial or triennial vote, and how would the shareholders ultimately vote? Mark Borges...

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A Look Forward to 2012, and Some Highlights of 2011

Martin Rosenbaum — Fri, 30 Dec 2011 16:15:44 -0600

My plans for New Year’s Eve are saved! I don’t need to sit at home on Saturday night waiting for the SEC’s to-be-issued proposed and final rules under the Dodd-Frank Act that have been long been listed on the SEC's Dodd-Frank web page under the category “December 2011 (planned).” I checked again today, and I found that the caption above those items has now been changed to “January – June 2012 (planned).” Further, the items that had been labeled...

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Why Am I Inspired By the Songs of Stephen Sondheim?

Martin Rosenbaum — Wed, 21 Dec 2011 23:37:46 -0600

As I said in my last post, the theme of the Maslon Law Firm’s holiday project is “Inspiration – Pass It On”. My inspiration – “Studying the Songs of Sondheim.” So why am I inspired by the songs of Stephen Sondheim? And can he teach any lessons to those of us who draft disclosure and communication documents for a living? I’ve been a fan of musical theater at least since high school, when I got a chance to play Tevye in Fiddler on the Roof. I still...

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Payback Time: How to Prepare for Required Clawbacks Under Dodd-Frank

Martin Rosenbaum — Thu, 15 Dec 2011 22:29:43 -0600

Compensation attorney and fellow blogger Mike Melbinger recently gave an excellent presentation in Minneapolis on the clawbacks required under the Dodd-Frank Act. His message – start getting prepared now for some complex and sensitive issues. His presentation was sponsored by the Twin Cities Chapters of the National Association of Stock Plan Professionals and the Society of Corporate Secretaries and Governance Professionals. Melbinger’s presentation, “Payback Time: Issues...

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More Proxy Advisor Insights: Through The Looking Glass (Lewis)

Martin Rosenbaum — Mon, 05 Dec 2011 23:03:08 -0600

As I reported in this prior post, the recent Proxy Disclosure Conference sponsored by CompensationStandards.com (subscription site) featured a session called “The Proxy Advisors Speak”, featuring insights from representatives of ISS and Glass Lewis on how to gain their positive recommendations. This is critically important in the upcoming season of Say-on-Pay advisory votes on executive compensation. David Eaton, the Glass Lewis representative, made these points: ...

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ISS 2012 Policy Updates, Continued: Board Response to a High Negative Vote

Martin Rosenbaum — Thu, 01 Dec 2011 01:11:08 -0600

As discussed in my last post, the proxy advisory firm ISS recently issued its 2012 Updates to its U.S. Corporate Governance Policy (PDF). One important change relates to the board’s response to a high negative vote. For companies that experienced a lot of “thumbs down” votes from shareholders at the last annual meeting, ISS’s evaluation of the board’s responsiveness will affect ISS’s recommendation on the upcoming Say-on-Pay vote. Not only that, but this...

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ISS Policy Updates Shed Light on Pay-for-Performance Analysis

Martin Rosenbaum — Sun, 20 Nov 2011 22:46:13 -0600

The proxy advisory firm ISS last week issued the 2012 Updates to its U.S. Corporate Governance Policy (PDF). The Updates outline this year’s changes to ISS’s policies in recommending investor votes at public companies’ shareholder meetings. Essentially, the policies say when ISS will act like the popular kids on Facebook and “like” a company’s postings – see this prior post. These recommendations are especially important in the upcoming proxy season,...

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What Should Public Companies Know About the Proxy Advisors?

Martin Rosenbaum — Sun, 13 Nov 2011 20:57:02 -0600

In the second year of mandatory Say-on-Pay votes on public company compensation, the proxy advisory firms such as ISS and Glass Lewis will be like the popular kids on Facebook: it’s important to get them to “like” the company’s postings. In other words, their positive recommendations are an important factor in winning the Say-on-Pay vote by the widest possible margin. Therefore, one of the best parts of attending the recent Proxy Disclosure Conference sponsored by...

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Proxy Disclosure Conference Teaches the Importance of Pay for Performance

Martin Rosenbaum — Fri, 04 Nov 2011 00:15:13 -0600

I have been attending the Proxy Disclosure Conference and Say-on-Pay Workshop sponsored by CompensationStandards.com (subscription site) in San Francisco. The Conference and Workshop were unique, in that the speakers included representatives of: Proxy advisory firms, including ISS and Glass Lewis. Institutional investors, including CalSTRS, T. Rowe Price and BlackRock. Proxy solicitors, including Georgeson and Innisfree M&A Compensation consultants, including Compensia and...

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Report Sheds Light on Stock Ownership Guidelines

Martin Rosenbaum — Thu, 20 Oct 2011 20:48:48 -0600

Stock ownership guidelines have become a common governance tool for encouraging stock ownership by executives and directors. A recent post on the NASPP Blog by Executive Director Barb Baksa provided useful insight and data on public companies’ stock ownership guidelines. The Blog is sponsored by the National Association of Stock Plan Professionals, and the post reported results from the NASPP’s 2011 Domestic Stock Plan Administration Survey, co-sponsored by Deloitte. The survey...

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