ON Securities

At Thanksgiving, our thoughts naturally turn to gluttony of all sorts. So it seems like a fitting time to recognize a few companies for granting awards to their executives that look so ridiculous they practically beg Congress to speed up compensation reform. . . . So pass the cranberry sauce and gravy, here are my nominees for the “Compensation Turkeys of the Year”, all reported by footnoted.org in the past few weeks . . . . Of course, Goldman Sachs makes the list for its announcement that it is setting aside around $17 billion for compensation and bonuses, calculated to be more than $700,000 on average for each of the company’s 31,700 employees. . . . Last week I reported that RiskMetrics Group came out with its 2010 updates to its proxy voting guidelines, summarized here. . . .

Several new reports have been published that provide valuable information about what’s going on in the public company world . . . . Pearl Meyer & Partners released a survey report covering companies’ attitudes toward Say-on-Pay, which is currently required for TARP recipients but will not be required for other public companies until at least 2011 . . . . Frederick W. Cook & Co. released a report of its study of non-employee director compensation at the 100 largest New York Stock Exchange companies and the 100 largest Nasdaq companies . . . . One more update – hot off the presses: I noticed that RiskMetrics today published some of its 2010 policy information, which applies to all shareholder meetings occurring on or after February 1, 2010 . . . . [to read more, click on the link above]

Early November finds us in a kind of limbo – those of us who advise public companies on governance and compensation matters are waiting for something big to happen. But there’s plenty of smaller stuff to report on – although most of these items present more questions than answers . . . . On November 4, SEC Chairman gave a speech addressing current regulatory developments. She described the proxy disclosure rules but did not address when they would be adopted or considered. . . . Rep. Maxine Waters has proposed an amendment to the Investor Protection Act of 2009 . . . . [to read more, click on the link above]

Mark Borges, the well known compensation consultant with Compensia, gave a very interesting talk this week at a joint meeting of the Society of Corporate Secretaries and Governance Professionals and the Twin Cities Compensation Network. Mark was gracious enough to give me permission to post his presentation, which is full of useful updates on governance and compensation reform and tips on how to get ready. . . . Mark made these points, among many others . . . . [to read more, click on the link above]

Just as lawmakers and regulators are preparing to consider compensation reform once again, a new report has surfaced that’s likely to turn up the heat on the debate. The Wall Street Journal reported that the major financial institutions are on pace to pay their employees around $140 billion this year – a record level. . . . For example, the Journal projects that Goldman Sachs will pay $20 billion in compensation and benefits ($743,000 per employee) this year. . . . At long last, this month there has been a new development worthy of changing the Cheat Sheet. As reported in Bloomberg and elsewhere, the SEC has decided not to take any action on the proposed shareholder access rules this year . . . . [to read more, click on the link above]

The past few weeks have been fairly slow in terms of new developments in securities law, corporate governance and executive compensation. However, summer’s over, and I’m expecting a flurry in the next few weeks. Take a look back at the ON Securities Cheat Sheet – a lot of these developments are likely to change as we head into the fall . . . . Last weekend I saw my all-time favorite film about blogging – okay, maybe the only film I have seen about blogging. “Julie & Julia” follows two parallel true stories . . . . I watched Julie’s story with my “blogger hat” on, and I tried to figure out what made her blog successful. . . .[to read more, click on the title above].

. . . Say-on-Pay has become a political football lately. . . [Editor’s Note: You may have noticed veiled references to “football” in the title and the first paragraph of this post. The Editor of the ON Securities Blog categorically denies ANY relationship between these references and Brett Favre’s announcement Tuesday that he signed a contract with the Minnesota Vikings.] . . . So, what does the scoreboard look like in Say-on-Pay season? Generally, the non-binding proposals to approve executive compensation did very well. . . . [To read more, click on the title above]

On Friday, the House of Representatives passed the Corporate and Financial Institution Fairness Act of 2009. The Senate still needs to consider similar legislation, and any differences will need to be resolved. . . . For most public companies, the bill will . . . . [to read more, click on the title above]

It’s a pretty good bet that non-binding shareholder advisory votes on executive compensation (“Say-on-Pay”) will be adopted this year and will become mandatory for public companies, probably starting with the 2010 proxy season. . . . So, what does Say-on-Pay look like in practice, and what is the likely outcome of the shareholder vote? . . . . Assuming Say-on-Pay is required to be on the ballot in 2010, what should companies do now? . . . .We have just posted an updated version of the ON Securities Cheat Sheet under the Resources listing on the home page of this Blog. . . . [To read more, click on the title above.]

Is your head spinning from the number of new developments in corporate governance and compensation reform? Are you dizzy from trying to remember whether “say-on-severance” is part of the Schumer Bill or the Treasury Department’s white paper? Is your heart racing from trying to keep track of the progress of shareholder access proposals? . . . We have just the answer – the ON Securities Cheat Sheet will cure what ails you. The Cheat Sheet is a one stop shop for “capsule summaries” of each bill and regulatory proposal being considered. These capsules are sure to make you feel better – and in the spirit of health care reform, this remedy is ABSOLUTELY FREE! . . . . [To read more, click on the Title above.]