Shareholder Engagement on Compensation Matters: Special Time-Sensitive Complications for the 2025 Proxy Season
As most public companies know, shareholder outreach is often an important part of the playbook when a company is seeking approval of compensation-related proposals at an annual meeting. A company may engage with shareholders proactively ahead of a compensation-related proposal or in response to a negative recommendation from proxy advisory firms. In addition to engagement […]
Alessandra Murata, Michael Bergmann, and Brad Goldberg are Partners at Cooley LLP. This post is based on their Cooley memorandum.
As most public companies know, shareholder outreach is often an important part of the playbook when a company is seeking approval of compensation-related proposals at an annual meeting. A company may engage with shareholders proactively ahead of a compensation-related proposal or in response to a negative recommendation from proxy advisory firms. In addition to engagement relating to current-year proposals, where a company in a prior year received less than a specified favorable vote on its “say-on-pay” proposal – more than 70% for Institutional Shareholder Services (ISS) or 80% for Glass Lewis – proxy advisors expect the company and its independent directors to engage with shareholders following the annual meeting regarding its executive compensation practices, and detail such engagement in the proxy for the next year’s annual meeting, including information about the extent of the outreach (i.e., which shareholders were engaged), what the company and its independent directors heard, and what, if anything, the company did in response to shareholder concerns.
