The Equilar Institute provides in-depth research and analysis on boards of directors, shareholder engagement, executive compensation and other issues affecting the world of corporate governance. Below are some key highlights from the last quarter that showcase the in-depth information available in public filings via the Equilar database. Visit www.equilar.com/institute or www.equilar.com/blog.html to read these articles in full as well as many more.
Generally, a candidate for the chief executive position needs decades of experience to develop skills and build the necessary resume. Individuals who reach the CEO post before the average age are curiosities. The patterns among companies with the youngest CEOs mirror those of companies with the youngest median directors, suggesting that the context of industry plays a large role in hiring strategies. For example, four of the youngest CEOs are from either the technology or service sectors. This Equilar study* takes a look at the youngest U.S. CEOs.
Equilar explored Say on Pay voting trends over the last five years. The variations seen each year are slight, but overall the trend is toward fewer companies passing with more than 80% approval. This most likely reflects a change in voting behavior, as investors are evaluating compensation packages more rigorously.
Proxy advisory firms continue to have an influence on proxy voting outcomes. Typically, companies will take notice when proxy advisory firms release their annual voting guidelines. A new 2020 ISS proxy voting guideline recommends a negative vote against directors responsible for setting excessive nonemployee director compensation for over two years. This Equilar study examines the impacts of the new policy on director pay.
Recently, the SEC proposed amendments to update the procedural requirements and resubmission thresholds under Exchange Act Rule 14a-8. Two changes look to modernize the ownership requirements to submit shareholder proposals and the level of support a proposal must receive to be eligible for resubmission at the same company’s annual general meeting the following year. These changes will challenge activist shareholders by creating additional barriers. Learn more about how changes to Exchange Act Rule 14a-8 will affect proposals in this study.