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Forum Report: “Say on Pay”
Plans for Next Phase of “Say on Pay”
Program: Reality
Your comments will be welcomed to guide the development of plans for the
next phase of Forum attention to “Say on Pay” issues, as we focus now on the
practical implementation of voting with its associated information and
communication processes.
Experiment with policy debate
Before addressing future plans, though, I want to congratulate all the Forum
participants who helped define issues relating to public policies. You
should certainly take pride, for example, in the open exchange of views that
guided Professor Gordon’s development of recommendations ultimately
incorporated in the recent House bill.
Although the Forum was organized to consider marketplace decisions rather
than political decisions, it is encouraging to see that our informed
discussion of shared objectives can be equally effective in either context
as an alternative to partisan advocacy practices.
One of the things we must decide now is whether the Forum should continue
its attention to public policy issues. Those of you with commercial or
career interests in the Senate’s treatment of “Say on Pay” or the SEC’s
rules for it should of course consider supporting an organization that
advocates your particular interests, or even doing your own advocacy. If
your interest is “pure policy” development, you should consider contributing
to the programs of one the university governance centers. But if you think
the marketplace might benefit from a non-partisan Forum project, please
offer your suggestions.
Developing the resources you’ll need
For most Forum participants, what is really important about “Say on Pay” is
the very practical challenge of managing its information and communication
requirements. The increase in these requirements will be significant, even
if regulated voting is limited and delayed another year, and the adaptation
process will present extraordinary opportunities for corporate managers,
investors and service providers to distinguish themselves competitively.
This is the kind of marketplace process the Forum was organized to address.
If you tell us what might help you perform your responsibilities in the new
environment, the Forum will organize projects to develop the resources you
and other participants need. These are examples of the range of what is
currently being considered, to stimulate your thinking:
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Survey and other investor communication processes for more
effective analysis of investor views than what is allowed by proxy voting
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Practices for fair consideration of all investor constituency
interests
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Technologies to support more effective delivery and exchange
of information
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Neutral clearinghouse for compensation information relevant to
both corporate and investor decisions
Supporting competitive success
Participants in the Forum program that initiated the “Advisory
Voting Project” in 2006 should recall that the first of three
conclusions presented by the panel was that corporate managers and investors
share a common interest in the competitive success of their business
enterprise.
I want to emphasize now that we also share a common interest in making the
most of “Say on Pay.” However you view the concept or its implementation,
the related communication processes will shape what may become the most
important consideration in capital allocation and voting decisions:
investor confidence that a company is paying its executives to run a sound
business.
GL – August 13, 2009
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Email:
gl@shareholderforum.com
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