Week in Review: Nov. 8, 2013
SH&P Comment Letter to ISS re 2014 Draft Policies
To Whom It May Concern:
We appreciate the opportunity to comment on the 2014 Draft Policies. Our responses to each question are provided below.
Pay For Performance Quantitative Screen (U.S. and Canada)
Our answers to your specific questions are provided below. More fundamentally, however, as in past years, we reiterate our concerns that the RDA measure specifically and the pay-for-performance evaluation methodology more generally are flawed due to the reliance on TSR as the sole quantitative factor used to assess corporate performance. While TSR performance is certainly important, we continue to believe that there are potential adverse consequences associated with creating a disproportionate focus on stock price performance at the expense of other operational and financial metrics which should ultimately contribute to long-term returns for shareholders. By continuing to use TSR as the sole quantitative benchmark for corporate performance and relegating an analysis of operational and financial performance metrics to the qualitative assessment, we believe that this policy puts many compensation committees in the position of having to choose between doing the right thing for the long-term value of the company and doing the right thing to secure favorable Say on Pay vote recommendations from ISS. Read more…
65 Companies have Failed Say on Pay in 2013
Cytodyn, Inc. failed their first-ever Say on Pay vote, bringing the 2013 total to 65. Including Cytodyn, there have been six companies that have failed their first-ever Say on Pay vote in 2013.
SEC Comment Letter of the Week
This week we focus on the form comment letter that the SEC has received over 20,000 times.
I’m writing in support of a strong Dodd-Frank rule 953(b).
Disclosing corporate pay ratios between CEOs and average employees will discourage the outrageous and reckless pay practices that fueled the 2008 crash.
Knowing which corporations heap riches upon their executives while squeezing struggling employees also will be a useful factor for me when considering which businesses to support with my consumer and investment dollars.
I am aware that you are under intense pressure by business interests to weaken or abandon the rule. Do not give in. Instead, weigh your duty to protect investors and the American public against the self-serving interests of those seeking to undermine this rule.
Thank you for considering my comment,