Global Proxy Watch, November 3, 2006 article

Shareholder Forum for Options Policies

The article copied below appeared in Global Proxy Watch, a private weekly newsletter covering international corporate governance developments for clients of Davis Global Advisors, Inc.

For previous developments concerning the meeting reported in the article, see

February 8, 2007 Financial Times: "Blue chips in talks on UK-style pay vote"
January 26, 2007 Financial Times: "Push to curb executive pay"
January 25, 2007 American Federation of State, County and Municipal Employees (AFSCME) press release: "Institutional Investors to Press Companies For a Shareowner Vote on Executive Pay"

Right Option Can the market untangle the mess surrounding stock options at US companies—or is this one for the regulators? On Monday, as some 150 companies faced probes into options backdating, the market said it wants a crack at the job. New York-based governance advocate Gary Lutin took the chair of a new transatlantic Options Policies Forum sponsored in part by Hermes Equity Ownership Services (EOS). The purpose: forging dialogue with select corporates to issue common principles on stock option pricing. Sure, one might be ‘no backdating allowed.’ But sponsors want a broader framework on option pricing. And they want it quick. An advisory panel will issue recommendations by March—in time for the 2007 US AGM season. EOS hopes the Forum will pioneer UK-style constructive engagement among corporates and shareowners as an alternative to confrontation. Contact gl@shareholderforum.com.

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Stephen Davis, editor. T +1 203 245 2288 +44 [0]20 8133 6828 Skype: davisglobal F +1 203 245 2278 E gpw@davisglobal.com

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