Gunster attorney Bob Lamm contributed to a discussion regarding say-on-pay votes in a recent Agenda article. The article illustrates the way to turn around a say-on-pay vote when a company comes in low.
According to the article, pay for performance continues to be the number one driver of low and failed say-on-pay votes. Lamm weighs in to explain how important it is for a company to have initiative in the process in order to get in front of the issue.
Lamm explains that in order to avoid low support, the most important task for compensation committees is to engage with their shareholders before and after the voting occurs. By cultivating a conversation, investors feel acknowledged and the company directors can voice their explanations which will lead to a beneficial outcome for both parties. Lamm states, “When it comes to disclosure, too often companies only disclose what is required and not what the comp committee’s strategy around the plan and metrics are.” However, by linking performance to metrics, investors will understand what the company did, why they did it and how they did it.
Bob Lamm chairs the firm’s securities and corporate governance practice. His previous experience includes senior legal positions at W. R. Grace, CA Technologies, and Financial Guaranty Insurance Company. In addition to his role at Gunster, Lamm is an independent senior advisor to the Deloitte Center for Board Effectiveness. He frequently speaks and writes on securities law, corporate governance and related topics, including the “Bob’s Upticks” column on Gunster’s Securities Edge blog, and he serves on the board of editors of The Corporate Counselor.
Read the full article: Turning around a low say-on-pay vote (subscription required)