When we asked why Nominet has been not doing anything for members with respect to the COVID-19 pandemic, despite having had a year to do so and over £90m held in a reserve, he noted that the board had discussed such a measure “just this week.”
We understand, incidentally, that that a board meeting was held on Thursday, the same day that it became aware of the plan to call an extraordinary general meeting and the PublicBenefit.uk website.
When asked about the price rise in .uk domains, Haworth said the additional funds have gone into investing in the .uk registry though when we said we could not find any details regarding that investment, he promised to set up a webinar outlining what had been done.
The Midwest Investors Diversity Initiative, a 14-member alliance co-led by the Illinois State Treasurer’s Office and Segal Marco Advisors, recently announced that it obtained commitments from 32 companies to adopt Rooney Rule policies for every open board seat through engagements over the past four years.
The vast majority of these proposals reached a vote prior to George Floyd’s death and the resulting societal focus on racial inequality and systemic racism. Accordingly, we expect the submission, and passage, of proposals focused on diversity, equity and inclusion will likely accelerate in the 2021 proxy season.
Specifically, ISS recommended voting in favor of only three of these proposals due to concerns regarding how a racial pay gap ratio would be calculated. In comparison, it recommended votes in favor for 13 of the pay gap proposals voted on during 2019.
Voluntary agreements to publicly disclose unadjusted pay gap information continued to be rare during 2020, with only two companies agreeing to do so—MasterCard and Starbucks. In light of the current social climate, this may be another area ripe for expanded focus during the 2021 proxy season.
In 2020 six employment-related mandatory arbitration proposals were submitted (a slight increase from the five submitted during 2019).
Ceo half board uk domain voted for
Governance Review will provide further analysis of institutions’ voting decisions on these proposals.
Environmental and Social Proposals Submitted vs. Voted, 2017-2020
Environmental and Social Proposals Voted vs. Passed & Average Support, 2017-2020
Passing Environmental and Social Proposals, 2020
Proposals Voted Upon Relating to Select Social Issues, 2017-2020
Proposals Voted Upon Relating to Select Social Issues, 2017-2020
Proposals Voted Upon Relating to Select Environmental Issues, 2017-2020
Proposals Voted Upon Relating to Select Environmental Issues, 2017-2020
Director Elections
The investor spotlight continued to shine on director elections this proxy season.
The other proposals all specifically sought reporting on the diversity of the respective company’s workforce based on gender and the Employer Information Report EEO-1 racial and ethnic categories. In the case of Genuine Parts and O’Reilly Automotive, the proposals also requested broader reporting on policies, performance and improvement targets (taking into account SASB-aligned metrics) related to material human capital risks and opportunities.
Also focused on the topic of board and workforce diversity, the National Center for Public Policy Research, a conservative think tank, this season submitted nine proposals relating to “ideological” diversity.
Best Paid CEOs of Large CompaniesNote: Sample consists of CEOs in the 250 largest companies, ranked by 1988 sales.
1.
The median CEO in our sample holds stock worth $2.4 million. The average 1988 salary and bonus for the CEOs in our sample was roughly $1 million.
The cash compensation of Walt Disney CEO Michael Eisner, whose pay has generated such attention in recent years, is more than ten times more sensitive to corporate performance than the median CEO in our sample. Yet the small number of CEOs for whom cash compensation changes in any meaningful way in response to corporate performance shows how far corporate America must travel if pay is to become an effective incentive.
Creating better incentives for CEOs almost necessarily means increasing the financial risk CEOs face. In this respect, cash compensation has certain advantages over stock and stock options.
Stock-based incentives subject CEOs to vagaries of the stock market that are clearly beyond their control.
The two instances that did not receive the requisite support are distinguishable given individual facts and circumstances.
Despite shareholders’ routinely high support of these proposals, they sometimes prove difficult for management to implement in subsequent years. This is due to the supermajority vote required to eliminate the supermajority provisions themselves and the composition of the company’s shareholder base.
Reduction of Thresholds for Shareholders to Call a Special Meeting
The number of proposals seeking reduction of the threshold required for shareholders to call a special meeting saw a surge similar to what we saw in the 2018 proxy season, with 40 such proposals going to a vote this year. The 2018 surge was due to the Chevedden Group’s focus on the proposal and its ability to get the proposal on 52 companies’ proxy ballots.
At a real interest rate of 3%, the present value of the salary and bonus for the next five years to retirement (the average for the sample) is $4.6 million. Thus total lifetime wealth from the company is $7 million.
2. See Robert Gibbons and Kevin J. Murphy, “Relative Performance Evaluation for Chief Executive Officers,” Industrial and Labor Relations Review, February 1990, p.
30-
S.
3. See Jerold B. Warner, Ross L. Watts, and Karen H. Wruck, “Stock Prices and Top Management Changes,” Journal of Financial Economics, January–March 1988, p. 461; and Michael S. Weisbach, “Outside Directors and CEO Turnover,” Journal of Financial Economics, January–March 1988, p.
431.
4. For more detail on these tests, see our article, “Performance Pay and Top-Management Incentives,” Journal of Political Economy, April 1990.
5.
The median CEO of one of the nation’s 250 largest public companies owns shares worth just over $2.4 million—again, less than 0.07% of the company’s market value. Also, 9 out of 10 CEOs own less than 1% of their company’s stock, while fewer than 1 in 20 owns more than 5% of the company’s outstanding shares.
It is unreasonable to expect all public-company CEOs to own as large a percentage of their company’s equity as Warren Buffett’s share of Berkshire Hathaway. Still, the basic lesson holds. The larger the share of company stock controlled by the CEO and senior management, the more substantial the linkage between shareholder wealth and executive wealth.
A few companies have taken steps to increase the share of corporate equity owned by senior management. Employees of Morgan Stanley now own 55% of the firm’s outstanding equity.
However, despite employees–and shareholders–repeatedly calling for Kotick’s resignation, it looks as though he’ll be around through 2023.
As for if Kotick will remain CEO of Activision Blizzard, it’s still too soon to tell. Right now, the company is in the process of being purchased by Microsoft in a historic $70 billion dollar deal. Some reports claim Kotick will receive a “$15 million dollar golden parachute” following the purchase and his exit is imminent, while others are unsure about what will happen following the acquisition.
Earlier this month, Activision Blizzard released the results of its own internal investigation via its investor site.
