The Say on Pay Paradigm Shift: What You Need to Know NOW!

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Expert Perspective by Grahall’s OmniMedia Editorial Board

In his most recent client alert, “Say On Pay Ushering in Paradigm Shirt? What You Need to Know NOWGrahall’s Garry Rogers discusses trends appearing in the first two months of early filing companies regarding Say on Pay requirements and frequency.  And those trends are potentially significant. Rogers says: “… we may be heading for nothing less than a total transformation of the process by which executive compensation is both determined and implemented.”

In his Client Alert, Rogers says:  “Barely a few months into the Say-On-Pay era, and we’ve already experienced more than a few surprises, as the initial filings have highlighted many of the concerns and new challenges that will be brought to the forefront by the new say on pay process.”

Rogers goes beyond a rules summary and investigates some surprises illustrated by early proxy filers regarding say on payincluding:

• Outright rejection of existing compensation schemes at two major companies
• The immediate impact of the disallowance of Broker Non-Votes on compensation and say on frequency approval
• Luke-warm votes of approval at two other companies, including one with solid 2010 financial performance
• Shareholders eschewing companies’ requests for triennial review in favor of annual review of compensation programs

Rogers includes a set of recommendations to help Compensation Committees and Boards structure and communicate compensation programs that avoid governance concerns relating to executive pay that could render the company less attractive to shareholders.

Keep tuned to Grahall’s Regulatory Updates for the release of this important Client Alert.  We will post a blog with a direct link as soon as the article is available.

Contact Garry Rogers at garry.rogers@grahall.com.

Click here to read more in our blogs about Say on Pay.

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