Welcome to Proxy Season Halftime

Photo courtesy of Natalie Blackburn on Flickr

Photo courtesy of Natalie Blackburn on Flickr

Rob Swystun, Pristine Advisers

Welcome to the Proxy Season halftime show.

For analysis and highlights, we turn to Frank B. Glassner, the CEO of Veritas Executive Compensation Consultants, LLC, who recently posted a proxy season halftime report in the Harvard Law School Forum on Corporate Governance and Financial Regulation regarding governance trends for this year based on an analysis of ISS Voting Analytics data.

Let’s get to those highlights.

Director Elections

Almost all directors who were up for election in 2015 have been elected so far, with average support levels of over 96%. That’s about at the same level as last year. Also similar is that 14 directors so far this season have failed to get majority support, just a tad more than the 12 board members who didn’t at this time last year.

Most of the failed director elections have occurred at firms in the Technology Media and Telecom sector (seven) and financial services firms (three).

Shareholder Proposals

The numbers on shareholder proposals so far this proxy season:

  • Roughly 950 resolutions have been submitted at almost 500 firms for the 2015 proxy season.
  • 600 shareholder proposals have so far appeared on proxy ballots at about 350 companies.
  • About 18% of the proposals have been withdrawn and approximately 14% excluded from ballots with agreement from the SEC.

Voting Analytics are available for about 190 shareholder resolutions and average investor support for those is 33.5% with 28 of them receiving majority support (proxy access proposals account for nearly half of the ones that have received majority support).

Last year saw about 560 proposals at almost 330 companies, which received, on average, 32.7% support, 83 of which received majority votes.


  • Governance proposals account for about 50% of all resolutions on ballots this year
  • Environmental and social (E&S) proposals account for 37%
  • Compensation proposals account for 13%
  • Governance proposals have received 43% average support
  • E&S resolutions have garnered 22.6% support on average
  • Compensation resolutions have received 33.4% support on average

Governance proposals have drawn 25 of the 28 majority votes thus far this year, with the remaining three majority votes for compensation resolutions.

Proxy Access

Proxy access is the highest-profile shareholder proposal topic this proxy season, with 84 shareholder proposals on the ballot to date. That’s more than four times the number of proposals that appeared on ballots in 2014.

Almost all of them are modeled on the 3%-for-three-years formulation featured in the SEC’s vacated proxy access rule. Voting Analytics data shows they’ve received 54.9% shareholder support at the 32 companies where vote results are available, with 14 receiving majority support.

The boards of seven companies have sponsored proxy access proposals with more restrictive terms that compete with the shareholder proposals on ballot.

The results of two of the proxy access proposals/counter proposals are available:

  • At AES Corp, investors voted down the board-sponsored 5%-for-three-years proposal (36% support) in favor of the 3%-for-three-years shareholder proposal (66% support).
  • At Exelon, shareholders passed the 5%-for-three-years board proposal (52% support) rather than the 3%-for-three-years shareholder proposal (44% support).

Independent Board Chairs

Independent board chairs are the most frequently occurring shareholder resolution after proxy access.

  • 64 proposals on ballots so far this year.
  • Vote results are available for 29 proposals and they have average support of 29.5%, down slightly from last year’s 31.1% average support.

So far in 2015, no independent chair shareholder proposals have received majority votes. In 2014, four independent chair proposals received majority support,( two of which are on ballot again in 2015).

Management Say on Pay

Levels of support for management say-on-pay (MSoP) ballot have remained relatively unchanged from last year, with average shareholder support for MSoP proposals at 92.3%. Eleven firms have so far received less than majority support, compared with 16 failed votes at this time last year.

The Ups and Downs of SoP

Glassner ends his half-time proxy season report with a look at just how quickly things can change for companies with year-over-year support for say on pay using numbers from Edward Kamonjoh, ISS’ Head of U.S. Strategic Research Analysis and Studies :

  • Sensient Technologies – 98% support in 2015,  46% support in 2014
  • FirstMerit Corporation – 93% support in 2015, 42% support in 2014
  • Walter Energy – 28% support in 2015, 95% support in 2014
  • Schnitzer Steel – 24% support in 2015, 76% support in 2014
  • Nuance Communication – 14.6% support in 2015, 51% support in 2014

We now return you to Proxy Season. Enjoy the rest of the voting.


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