Brief Summary of 2015 Proxy Items
- Still pending SEC actions based on Dodd-Frank:
- Claw backs – Discovery’s implementation of a claw back policy in 2011 anticipated increased requirements
- Hedging
- Pay for performance
- Pay Ratio – Set to be effective in 2016. Requires comparison of CEO pay to median employee pay.
- If use non-GAAP incentive measures, consult with counsel on disclosure and Reg G compliance
- Shareholder lawsuits gaining limited traction. Make sure what is disclosed is followed
- Nasdaq director independence rules now in effect
- ISS has revised its corporate governance scorecard—nothing major, but should review
- ISS has revised its equity plan approval guidance, now employing a scorecard rather than pass/fail options:
- Plan cost (45% weighting)
- Plan features (35% weighting):
- Single trigger vesting
- Discretionary vesting
- Liberal share recycling
- Minimum vesting
- Grant practices (20% weighting)
- Burn rate
- CEO vesting over three years
- Life of plan (shares remaining divided by three year usage
- Portion of CEO awards subject to performance
- Clawback policy
- Post exercise holding requirements
- No vote if on balance plan not in shareholder interest or has egregious features, such as repricing