Shareholder Approval of Stock Plans
Sample Proposals and Plan Documents
See these proxy statements for sample plans and proposals that reflect drafting for good governance and/or a favorable ISS review:
- Emerson Electric 2015 Incentive Shares Plan (new under ISS Scorecard, and received shareholder approval)
- Coca-Cola 2014 Equity Plan (see 2014 Proxy Statement Proposal) - Coke's 2014 Plan
- Procter & Gamble 2014 Stock and Incentive Compensation Plan (starting on page C-1)
- Intel 2006 Equity Incentive Plan (as restated in 2013).Stock Option Exchange Programs
Voting Results (notable outcomes)
- 2017.10.01 FW Cook Mid-year Report. Here are quotes from this FW Cook update concerning shareholder voting in 2017 among Russell 3000 companies:
– There were a total of 412 proposals seeking shareholder approval of equity plan amendments and 191 proposals requesting shareholder approval of new equity plans. With the exception of three proposals, all received majority shareholder support.
– ISS opposed approximately 18% of the proposals because they failed to receive a passing score under the Equity Plan Scorecard or exhibited negative overriding factors, such as single-trigger vesting risk on a potentially “liberal” change-of-control definition.
– The average passing vote in the aggregate was 90% for both amendments and new plan approvals. With a favorable ISS vote recommendation, both types of proposals passed with 93% shareholder support, on average. Without ISS’ support, the passing rate dipped slightly below 80% for both types of proposals. - 2013.11. Equity Plan Rejections (Survey 2007-2012). Six years, 4800 shareholder votes, and only 54 failures to approve proposed stock plans. Those numbers open a recent survey from Exequity/Alliance Advisors, with its 18-page report providing insights such as these: (1) an unfavorable ISS recommendation led to a failed shareholder vote in less than about 5% of votes; and (2) “if the dilution caused by the proposal exceeds 20 percent, it is much more likely to fail,” with 45 of the 54 failed proposals involving dilution of 15% or more. Significant but less determinative were survey results relating to the “cost” ISS attributed to a proposed plan, and the burn rate for making past awards.
- 2012.May.4 Shareholders Reject Only 1% of Proposed Stock Plans. A survey covering 4800 shareholder votes from 2007-2012 finds a 99% approval rate (Exequity and Alliance Advisors). Of 54 rejections, 45 involved dilution of 15% or more, and all but one involved an ISS "against" recommendation based commonly on failure of its shareholder value transfer test.