Say on Frequency

Law: see Say on Pay Home Page

SEC 8-Ks to reflect Board Determinations re Frequency 

  • Item 5.07(d) to Form 8-K requires issuers to disclose a company’s decision as to how frequently it will include future shareholder votes on executive compensation in its proxy materials until the next required vote on the frequency of shareholder votes on the compensation of executives.  This 8-K disclosure must occur within 150 calendar days after the end of the annual or other meeting of shareholders at which shareholders voted on the frequency of shareholder votes on the compensation of executives, but in no event later than 60 calendar days prior to the deadline for submission of shareholder proposals under Rule14a-8, as disclosed in the issuer’s most recent proxy statement.

Notable disclosures:

  • American Reprographics: opting for triennial vote even though shareholders voted for annual (70%) over triennial (30%), with the Company explaining that --
  • "As previously disclosed, the Company has recently renewed, or entered into, binding employment contracts with its named executive officers with three-year terms expiring in 2014. The Company believes that any attempt to modify the terms of those contracts prior to expiration could pose an executive retention risk to the Company. In addition, the Company has not historically engaged in problematic pay practices. Rather, compensation paid to the Company’s named executive officers in prior years reveals a practice of curtailing executive compensation in response to a challenging economic environment. A three-year frequency cycle will also allow stockholders to continue to evaluate the effectiveness of the Company’s executive compensation program on long-term performance of the Company."
  • Annaly Capital Management: same as above but without explanation; shareholders voted 71% for annual; 27% for triennial (per 8-K).

Policy encouraging Annual Votes:

  • Institutional Investors with more than $830 billion in assets -- issued a statement on 2011.Feb.1 supporting an annual advisory vote on executive compensation. See its News Release.
  • Fidelity Investments (fyi: search for "advisory vote")
  • Institutional Shareholder Services (ISS)