HomeWebcastThe 2017 Proxy Season: Trending Issues and Significant Considerations
Online CLE Proxy Season CLE

The 2017 Proxy Season: Trending Issues and Significant Considerations

Live Webcast Date: Thursday, April 20, 2017 from 12:00 pm to 2:00 pm (ET)
CLE Corporate LawRecording

Online CLE Proxy Season

Join us for this Knowledge Group Online CLE Proxy Season Webinar. Widespread adoption of proxy access has occurred at a fast pace.  Over 50% of the S&P 500 companies have adopted proxy access in the past two plus years.  Proxy access is expected to be a significant issue in the 2017 proxy season as it was during the 2015 and 2016 proxy seasons.   The changing dynamics surrounding proxy access, including companies' responses to these proposals, will be among the topics discussed by this  panel of thought leaders and practitioners assembled by The Knowledge Group in this two-hour Webcast.

Key topics that will be covered include:

  • Proxy Access Update and Other Shareholder Proposals
  • Developments on Executive Compensation
  • Dodd-Frank Compensation-Related Rulemaking
  • Other Key Disclosure and Specialized Disclosure Topics
  • Nasdaq Rule Requirements
  • Shareholder Engagement and Activism Developments

Agenda

SEGMENT 1:
Stephen GiovePartner
Shearman & Sterling LLP

  • Proxy Access
    • Background/context
      • Large number of shareholder proposals in 2015 and 2016 proxy sessions
      • Large number expected in 2017 proxy session
      • Proposals driven by NYC Comptroller and McRitchie/Chevedden
      • Greater than 50% of S&P 500 has adopted a proxy access by-law
      • Increasingly companies are adopting without receiving a shareholder proposal
    • Approaches Taken if Receive a Shareholder Proposal
      • “Fight” vs. “Adopt”
      • Ultimate results if “fight”
      • Institutional shareholder perspectives
      • ISS/Glass Lewis perspectives
      • SEC’s Rule 14a-8 no action results
    • Adopted By-Laws
      • Headline terms have become fairly standard
      • Secondary terms are beginning to also become standard
      • Negotiations are typically centering on selected secondary terms
    • Post Adoption Considerations
      • Risk of receiving a “fix-it” or amend shareholder proposal
      • Amendments history to date
      • Use of proxy access by shareholders

SEGMENT 2:
Jonathan E. SalzbergerDirector
Innisfree M&A Incorporated

  • Shareholder Centric Governance and Engagement
    • Overview
      • Transition: Proxy access is a symptom of a broader change in shareholder and board dynamics
      • New Shareholder Centric Paradigm: shareholders increasingly inject themselves into traditional board affairs and occasionally the operations of the company
      • Engagement: shareholder expectations have changed
    • Shareholder Centric Governance
      • Introduction Point: Investor Stewardship Group (ISG) Corporate Governance and Stewardship Principles
      • Concerns over settlements with activists without meaningful shareholder input (specifically State Street)
      • Diversity of thought and emphasis on the right board composition
        • Recent push for gender diversity on the board (specifically by State Street)
        • Director tenure concerns
        • The right mix to deliver long-term shareholder value
      • Shareholder monitoring of board oversight to drive long-term value
        • Monitoring board as capital allocator: investment vs. dividends vs. buybacks
        • New shareholder emphasis on risk oversight (cyber, regulatory, legal)
        • New ESG emphasis
          • BlackRock’s letter re: environmental sustainability
          • New prominence of ESG funds
          • Several ESG-related proposals passed in 2016
          • Sustainability/stranded assets/supply chain management
    • Shareholder Engagement
      • Introduction Point: Letters from Vanguard and BlackRock – Focusing on the long-term and explaining strategy to shareholders
      • But what do these letters actually mean? Changes from the traditional IR program
      • Direct shareholder engagement by board
      • Communicating the long-term strategy
      • Board responsiveness to shareholder concerns

SEGMENT 3:
Kelly MalafisPartner
Compensation Advisory Partners

  • Current Trends, Disclosure and Presentation
    • Assessment of Current Impact of Shareholder Engagement & Proxy Advisory Firms’ Views on Executive Compensation Trends
      • Positive practices:  increased shareholder engagement, greater pay-for-performance alignment and disclosure, reduction of non-performance-based elements (i.e., perquisites, SERPs, CIC excise tax gross ups, etc.)
      • Troubling practices:  pressure to move to a “one size fits all” model, lack of creativity, increased complexity and shorter term performance focus
    • Another Type of Shareholder Engagement: Activist Investors
      • While executive compensation is typically not the main concern of activist investors, the compensation plans are generally impacted to support the performance agenda
      • In our experience, activists tend to like highly performance-based and highly leveraged programs.  We will highlight some of the changes in plan design influenced by activists.
    • Disclosure - Turning proxy statements into a communication tool rather than just a compliance document
      • Updates have often been driven by (i) say-on-pay votes, (ii) shareholder activism on a particular topic, (iii) changes made by peer companies
      • Management should view as a tool to increase shareholder engagement, improve corporate branding, explain past performance and introduce strategy for future
      • Disclosure of shareholder engagement programs
    • Presentation
      • Including proxy summaries at the beginning of the proxy statement
      • Emphasizing board involvement and skills
      • Including graphics and other visual aids
      • Using pictures – personal touch while demonstrating diversity
      • Providing an enhanced online version of proxy statement
      • Simplifying and moving FAQs

SEGMENT 4:
Joseph A. SorrentinoManaging Director
Steven Hall & Partners

  • Dodd-Frank update
    • Status of CEO Pay Ratio
      • Overview of additional comment letters sent to SEC
    • Updates on status of other compensation-related Dodd-Frank regulations
  • 2017 Proxy season trends and issues
    • Pay levels
    • Program designs
    • Say on Pay voting results
    • Say on Frequency voting results

Who Should Attend

  • Corporate Governance/Proxy Advisory Professionals
  • Shareholders
  • Institutional Investors
  • C-Suite Executives
  • HR and Compensation Officers/Professionals
  • General Counsel
  • In-house Counsel
  • Board of Directors
  • Public Companies

Online CLE Proxy Season

SEGMENT 1:
Stephen GiovePartner
Shearman & Sterling LLP

  • Proxy Access
    • Background/context
      • Large number of shareholder proposals in 2015 and 2016 proxy sessions
      • Large number expected in 2017 proxy session
      • Proposals driven by NYC Comptroller and McRitchie/Chevedden
      • Greater than 50% of S&P 500 has adopted a proxy access by-law
      • Increasingly companies are adopting without receiving a shareholder proposal
    • Approaches Taken if Receive a Shareholder Proposal
      • “Fight” vs. “Adopt”
      • Ultimate results if “fight”
      • Institutional shareholder perspectives
      • ISS/Glass Lewis perspectives
      • SEC’s Rule 14a-8 no action results
    • Adopted By-Laws
      • Headline terms have become fairly standard
      • Secondary terms are beginning to also become standard
      • Negotiations are typically centering on selected secondary terms
    • Post Adoption Considerations
      • Risk of receiving a “fix-it” or amend shareholder proposal
      • Amendments history to date
      • Use of proxy access by shareholders

SEGMENT 2:
Jonathan E. SalzbergerDirector
Innisfree M&A Incorporated

  • Shareholder Centric Governance and Engagement
    • Overview
      • Transition: Proxy access is a symptom of a broader change in shareholder and board dynamics
      • New Shareholder Centric Paradigm: shareholders increasingly inject themselves into traditional board affairs and occasionally the operations of the company
      • Engagement: shareholder expectations have changed
    • Shareholder Centric Governance
      • Introduction Point: Investor Stewardship Group (ISG) Corporate Governance and Stewardship Principles
      • Concerns over settlements with activists without meaningful shareholder input (specifically State Street)
      • Diversity of thought and emphasis on the right board composition
        • Recent push for gender diversity on the board (specifically by State Street)
        • Director tenure concerns
        • The right mix to deliver long-term shareholder value
      • Shareholder monitoring of board oversight to drive long-term value
        • Monitoring board as capital allocator: investment vs. dividends vs. buybacks
        • New shareholder emphasis on risk oversight (cyber, regulatory, legal)
        • New ESG emphasis
          • BlackRock’s letter re: environmental sustainability
          • New prominence of ESG funds
          • Several ESG-related proposals passed in 2016
          • Sustainability/stranded assets/supply chain management
    • Shareholder Engagement
      • Introduction Point: Letters from Vanguard and BlackRock – Focusing on the long-term and explaining strategy to shareholders
      • But what do these letters actually mean? Changes from the traditional IR program
      • Direct shareholder engagement by board
      • Communicating the long-term strategy
      • Board responsiveness to shareholder concerns

SEGMENT 3:
Kelly MalafisPartner
Compensation Advisory Partners

  • Current Trends, Disclosure and Presentation
    • Assessment of Current Impact of Shareholder Engagement & Proxy Advisory Firms’ Views on Executive Compensation Trends
      • Positive practices:  increased shareholder engagement, greater pay-for-performance alignment and disclosure, reduction of non-performance-based elements (i.e., perquisites, SERPs, CIC excise tax gross ups, etc.)
      • Troubling practices:  pressure to move to a “one size fits all” model, lack of creativity, increased complexity and shorter term performance focus
    • Another Type of Shareholder Engagement: Activist Investors
      • While executive compensation is typically not the main concern of activist investors, the compensation plans are generally impacted to support the performance agenda
      • In our experience, activists tend to like highly performance-based and highly leveraged programs.  We will highlight some of the changes in plan design influenced by activists.
    • Disclosure - Turning proxy statements into a communication tool rather than just a compliance document
      • Updates have often been driven by (i) say-on-pay votes, (ii) shareholder activism on a particular topic, (iii) changes made by peer companies
      • Management should view as a tool to increase shareholder engagement, improve corporate branding, explain past performance and introduce strategy for future
      • Disclosure of shareholder engagement programs
    • Presentation
      • Including proxy summaries at the beginning of the proxy statement
      • Emphasizing board involvement and skills
      • Including graphics and other visual aids
      • Using pictures – personal touch while demonstrating diversity
      • Providing an enhanced online version of proxy statement
      • Simplifying and moving FAQs

SEGMENT 4:
Joseph A. SorrentinoManaging Director
Steven Hall & Partners

  • Dodd-Frank update
    • Status of CEO Pay Ratio
      • Overview of additional comment letters sent to SEC
    • Updates on status of other compensation-related Dodd-Frank regulations
  • 2017 Proxy season trends and issues
    • Pay levels
    • Program designs
    • Say on Pay voting results
    • Say on Frequency voting results

Online CLE Proxy Season

Online CLE Proxy Season

Joseph A. SorrentinoManaging DirectorSteven Hall & Partners

Joseph Sorrentino, Managing Director of Steven Hall & Partners joined the firm on its founding in September 2005.

Mr. Sorrentino has 20 years of experience consulting with public and privately held companies in the design and implementation of executive compensation and board remuneration programs with an emphasis on designing annual and long term incentive plans that align pay with performance.  His expertise includes ISS compensation and equity plan modeling and governance policies.

A regular speaker on issues related to executive compensation, he is frequently quoted in notable publications such as The Wall Street Journal, The New York Times, and Bloomberg News.  In addition, Mr. Sorrentino has been interviewed on the BBC, Bloomberg TV, Fox Business and NPR. 

A cum laude graduate of New York University, he received his M.B.A. from the Leonard N. Stern Graduate School of Business.

Online CLE Proxy Season

Stephen GiovePartnerShearman & Sterling LLP

Stephen Giove is a partner in Shearman & Sterling’s Capital Markets Group, and a current member and co-founder of the firm’s Corporate Governance Advisory Group. His practice is principally focused on counseling corporate clients and boards of directors with respect to strategic, governance, financing and public company matters.

Steve joined the firm in 1987, became a partner in 1993, was the firm’s hiring partner from 1997–1999, was the co-head of its US Capital Markets Group from 2003-2007, was a member of the firm’s Global Business Development Committee from 2008-2010 and was co-chair of the firm’s Corporate Governance Advisory Group from 2007-2013.

Online CLE Proxy Season

Jonathan E. SalzbergerDirectorInnisfree M&A Incorporated

Jonathan Salzberger is a Director of Innisfree M&A Incorporated. Mr. Salzberger advises companies and investors on shareholder engagement, corporate governance, activism and proxy solicitation, with an emphasis on merger solicitations and proxy contests. 

Prior to joining Innisfree, Mr. Salzberger was a corporate attorney with Sullivan & Cromwell LLP. Mr. Salzberger earned B.A. degrees in Economics and History, summa cum laude, from New York University, and a J.D. from the New York University School of Law, where he was the Editor-in-Chief of the NYU Journal of Law and Business.

Online CLE Proxy Season

Kelly MalafisPartnerCompensation Advisory Partners

Kelly Malafis is a founding Partner of Compensation Advisory Partners LLC (CAP) in New York.  She has 20 years of executive compensation consulting experience working with Compensation Committees and senior management teams.  Work performed has been for large and small publicly traded companies in a variety of industries, including financial services, insurance, pharmaceutical, manufacturing, and retail.  Kelly has also provided advice on compensation issues for privately-held companies and companies with special circumstances such as IPOs and spin-offs. Kelly holds a BS in Industrial and Labor Relations from Cornell University and an MBA from New York University’s Stern School of Business.  

Online CLE Proxy Season

Course Level:
   Intermediate

Advance Preparation:
   Print and review course materials

Method Of Presentation:
   On-demand Webcast

Prerequisite:
   Experience in corporate law

Course Code:
   145996

NASBA Field of Study:
   Business Law - Technical

NY Category of CLE Credit:
   Areas of Professional Practice

Total Credits:
    2.0 CLE

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About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

About the Knowledge Group

The Knowledge Group

The Knowledge Group has been a leading global provider of Continuing Education (CLE, CPE) for over 13 Years. We produce over 450 LIVE webcasts annually and have a catalog of over 4,000 on-demand courses.

Steven Hall & Partners (“SH&P”) is a nationally recognized, independent compensation consulting firm, specializing exclusively in the areas of executive compensation, board remuneration and related corporate governance issues.  By focusing solely on these critical and complex areas of the human resources arena, SH&P is able to provide clients with the highest quality expertise and advice on a practical basis.

Website: https://www.shallpartners.com/

From complex cross-border transactions to exclusively local deals, clients rely on Shearman & Sterling’s vast international network to help accomplish their business goals. The firm has approximately 850 lawyers in 20 offices around the world, and its lawyers come from some 80 countries, speak more than 60 languages and practice US, English, EU, French, German, Italian, Hong Kong, OHADA and Saudi law. They also practice Dubai International Financial Centre law and Abu Dhabi Global Market law.

Since 2003, the firm has published its annual Corporate Governance & Executive Compensation Survey of the 100 largest U.S. public companies.  The survey archives and other related content can be found at corpgov.shearman.com

Website: https://www.shearman.com/

Innisfree is a full service shareholder engagement firm providing clients with sound tactical and strategic advice and results-oriented implementation in proxy and consent solicitations (whether friendly or contested), tender and exchange offers, mergers, rights offerings, strategic restructurings and other domestic and cross-border transactions requiring action by public security-holders.  Innisfree provides expert consulting services on a wide range of matters, including shareholder activism, executive compensation proposals, corporate governance issues and investor relations

Website: https://www.innisfreema.com/

CAP is an independent executive compensation consulting firm.  We work with boards of directors and management teams to develop innovative and practical solutions that advance company objectives and help our clients make informed decisions about executive compensation.  Our advice is ground in extensive real-time experience, aligns with strong corporate governance standards and is supported by rigorous analytics.

Website: https://www.capartners.com/

Joseph Sorrentino, Managing Director of Steven Hall & Partners joined the firm on its founding in September 2005.

Mr. Sorrentino has 20 years of experience consulting with public and privately held companies in the design and implementation of executive compensation and board remuneration programs with an emphasis on designing annual and long term incentive plans that align pay with performance.  His expertise includes ISS compensation and equity plan modeling and governance policies.

A regular speaker on issues related to executive compensation, he is frequently quoted in notable publications such as The Wall Street Journal, The New York Times, and Bloomberg News.  In addition, Mr. Sorrentino has been interviewed on the BBC, Bloomberg TV, Fox Business and NPR. 

A cum laude graduate of New York University, he received his M.B.A. from the Leonard N. Stern Graduate School of Business.

Stephen Giove is a partner in Shearman & Sterling’s Capital Markets Group, and a current member and co-founder of the firm’s Corporate Governance Advisory Group. His practice is principally focused on counseling corporate clients and boards of directors with respect to strategic, governance, financing and public company matters.

Steve joined the firm in 1987, became a partner in 1993, was the firm’s hiring partner from 1997–1999, was the co-head of its US Capital Markets Group from 2003-2007, was a member of the firm’s Global Business Development Committee from 2008-2010 and was co-chair of the firm’s Corporate Governance Advisory Group from 2007-2013.

Jonathan Salzberger is a Director of Innisfree M&A Incorporated. Mr. Salzberger advises companies and investors on shareholder engagement, corporate governance, activism and proxy solicitation, with an emphasis on merger solicitations and proxy contests. 

Prior to joining Innisfree, Mr. Salzberger was a corporate attorney with Sullivan & Cromwell LLP. Mr. Salzberger earned B.A. degrees in Economics and History, summa cum laude, from New York University, and a J.D. from the New York University School of Law, where he was the Editor-in-Chief of the NYU Journal of Law and Business.

Kelly Malafis is a founding Partner of Compensation Advisory Partners LLC (CAP) in New York.  She has 20 years of executive compensation consulting experience working with Compensation Committees and senior management teams.  Work performed has been for large and small publicly traded companies in a variety of industries, including financial services, insurance, pharmaceutical, manufacturing, and retail.  Kelly has also provided advice on compensation issues for privately-held companies and companies with special circumstances such as IPOs and spin-offs. Kelly holds a BS in Industrial and Labor Relations from Cornell University and an MBA from New York University’s Stern School of Business.  

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