Week in Review: Oct 11, 2013

Week in Review: Oct 11, 2013

October 11 2013

Nasdaq OMX Group Inc. Takes Aim at ISS and Glass Lewis

Edward Knight, EVP, General Counsel & Chief Regulatory Officer of Nasdaq OMX Group Inc., wrote an opinion letter in the Wall Street Journal critical of ISS and Glass Lewis.  Knight points out that, “While transparency has come to be accepted as a fundamental tenet of good corporate governance, the two principal firms that render advice and recommendations on proxies, Investor Shareholder Services (ISS) and Glass Lewis & Company, are anything but transparent.”  Mr. Knight is critical of the influence these organizations hold over public companies while they “operate behind closed doors, blocking public companies from any direct access or input or opportunity to review the accuracy of the facts that serve as the basis for the proxy advisory firms’ recommendations, or whether these recommendations reflect the specific circumstances of their company.”

Finally, Mr. Knight says Nasdaq OMX will petition the SEC “to require the proxy advisory firms to make public the models and methodologies that frame their vote recommendations, and to mandate public disclosure of any and all business relationships that may give rise to conflicts of interest.”

Link: Edward Knight: Raising the Curtain on Proxy Advisers (subscription required)

ISS Policy Survey

ISS recently released the results of their annual survey of institutional investors and companies on emerging corporate governance issues.  ISS considers the survey a critical component of its annual policy review and formulation process.  Check back next week for our Client Alert highlighting the results.

Link: 2013‐2014 Policy Survey Summary of Results

60 Companies have Failed Say on Pay in 2013

With the fail of Masimo’s Say on Pay vote, we have reached the the total number of companies that failed in 2012.  Masimo failed even though they received more ‘For’ than ‘Against’ votes because the company treats abstentions as ‘Against’ votes.

2013 Say on Pay Voting Results
List of companies that have failed Say on Pay in 2013

SEC Comment Letter of the Week

While the comment period for the CEO Pay Ratio Disclosure remains open we will highlight a recent noteworthy comment letter.  This week’s letter was submitted by American Insurance Association, et al. who asked for a 60-day extension of the deadline for filing comments.

Excerpt:
Having reviewed the proposal to implement Section 953(b), the undersigned organizations hereby request a 60-day extension of the deadline for filing comments on the proposed Pay Ratio Disclosure rule published in the Federal Register on October 1, 2013 (“Proposed Rule”).

We believe an extension is necessary if stakeholders and interested parties are to even begin to have a chance to provide the diverse, detailed, and complex information sought in the overlapping requests for comments contained in this Proposed Rule.

The letter was signed by American Insurance Association, Center On Executive Compensation, Competitive Enterprise Institute, HR Policy Association, National Association of Real Estate Investment Trusts, National Association of Wholesaler-Distributors, National Investor Relations Institute, National Restaurant Association, National Retail Federation, Retail Industry Leaders Association, Society for Human Resource Management, The Real Estate Roundtable, U.S. Chamber of Commerce and WorldatWork.

Link: Request for Extension of Comment Period, Proposed Rule on Pay Ratio Disclosure; Release Nos. 33-9452; 34-70443; File No. S7-07-13; RIN 3235-AL47

Top 100 Non-Profit University President Compensation Study

Earlier this week we posted the results of our recent study of compensation for Presidents of the 100 largest private non-profit universities in the United States, as determined by asset size. Click here for study highlights or to download a copy of the study.

Link: “Pay at the Top” Private University President Compensation Among the 100 Largest Private Non-Profit Universities