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Preparing for the 2023 Proxy Season

Harvard Corporate Governance

This table will include, for the principal executive officer (PEO) and, as an average, for the company’s other named executive officers (NEOs), the summary compensation table measure of total compensation and a measure of “executive compensation actually paid,” as specified by the rule. more…) Practitioner Publications Clawbacks pay versus performance Proxy season Say on frequency SEC ShareholdersPosted by David M.

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Executive Compensation Considerations in the 2023 Reporting Season

Harvard Corporate Governance

Posted by Brian Breheny, Raquel Fox, Joseph Yaffe, Skadden, Arps, Slate, Meagher & Flom LLP, on Wednesday, December 14, 2022 Editor's Note: Brian Breheny , Raquel Fox and Joseph Yaffe are Partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on their Skadden memorandum. Prepare for New Pay-Versus Performance Disclosures.

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Annual Meetings and Activism in the Era of ESG and TSR

Harvard Corporate Governance

Bebchuk and Roberto Tallarita (discussed on the Forum here ); Companies Should Maximize Shareholder Welfare Not Market Value by Oliver Hart and Luigi Zingales (discussed on the Forum here ); Reconciling Fiduciary Duty and Social Conscience: The Law and Economics of ESG Investing by a Trustee by Max M. Boards of Directors ESG Institutional Investors Practitioner Publications Proxy voting Shareholder activism Shareholder voting StakeholdersPosted by Edward D.

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ESG Incentives and Executives

Harvard Corporate Governance

This unprecedented movement in incentive metric usage—much faster even than the relative total shareholder return (TSR) transition—is caused by many factors: from boards’/executives’ desire to help improve the social footprint of their companies and society to responding to shareholder pressures.

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How the SEC’s Executive Compensation Disclosure Rule Could Impact the 2023 Proxy Season

Harvard Corporate Governance

To help companies prepare for 2023 proxy statements and annual shareholder meetings, we summarize below the key elements of the final rules, how key stakeholders (activists, investors, proxy advisors) may use them and key considerations for companies subject to the new disclosure rules. Legislative & Regulatory Developments Practitioner Publications Securities Litigation & Enforcement Disclosure Executive Compensation Proxy voting SEC Shareholder activism Stakeholders

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Performance Bounced Back—CEO Pay Up

Harvard Corporate Governance

Median financial performance in all measures reviewed was up double digits over 2020 and median CEO total pay was up +19%. Revenue (+17.1%), pre-tax income (+62.5%), EPS (+71.0%), and one-year total shareholder return, or TSR, (+35.8%) were all up substantially.

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What Do Elevated Shareholder Expectations Mean for Large Company Boards and Compensation Programs?

Harvard Corporate Governance

Bebchuk and Roberto Tallarita ; and Does Enlightened Shareholder Value add Value (discuss on the Forum here ) and Stakeholder Capitalism in the Time of COVID (discussed on the Forum here ) both by Lucian A.

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SEC Pay Versus Performance Disclosure Requirements: Initial Observations

Harvard Corporate Governance

The new table is required to incorporate several specific calculations of executive compensation, including: The Summary Compensation Table (SCT) total for the principal executive officer (PEO; usually the chief executive officer), The compensation “actually paid” to the PEO, The average SCT total for the non-PEO NEOs, and. Summary Total vs Actually Paid.

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SEC Chair Gensler on Final Rule About Pay Versus Performance

Reynolds Holding

Building upon this long tradition of disclosure, today’s rule makes it easier for shareholders to assess a public company’s decision-making with respect to its executive compensation policies. These key performance metrics include total shareholder return (TSR), peer group TSR, net income, and a measure specific to the company.

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ESG Valuation Considerations – Top Down or Bottom Up?

Value Scope

It will return as a topic across the business, regulatory, and investment communities again soon. By focusing now on ESG, companies have the opportunity to affect current shareholder value. Click to Download: ESG Valuation Considerations – Top Down or Bottom Up?

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Skadden Discusses SEC’s Pay Versus Performance Disclosure Rules

Reynolds Holding

footnote disclosure to the table for any amounts deducted and added to total compensation of the NEOs to determine the amount of compensation “actually paid” (as described below) and certain related assumptions, as well as the name of each CEO and other NEO included in table for each year and the fiscal year for which they were included. On August 25, 2022, the U.S.

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Davis Polk Discusses Reopening of Comment Period for SEC’s Dodd-Frank Clawback Rule

Reynolds Holding

Incentive-based compensation is any compensation that is granted, earned or vested based wholly or in part on the attainment of a financial reporting measure, including stock price or total shareholder return. Thus, if the final rule were to encompass both types of restatements, it would increase the total number of restatements that could potentially trigger a clawback analysis.

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ESG A Valuation Framework

Value Scope

How do you justify making substantial investments and fundamental changes to corporate structures and culture without empirical evidence that it will make a direct impact on shareholder value, total shareholder return, net present value, and individual rates of return? .

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SEC Commissioner Peirce on Flaws in New Clawback Rules

Reynolds Holding

2] Instead of taking advantage of this statutory flexibility, the release before us adopts a prescriptive approach that, because of its breadth and inflexibility, in some cases, could impose costs on shareholders greater than the benefits they derive from the clawbacks. Such an approach would have served shareholders by ensuring that companies claw back erroneously awarded compensation when doing so yields a net benefit to shareholders.

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Wachtell Lipton on Dealing with Activist Hedge Funds and Other Activist Investors

Reynolds Holding

As stated by ISS in its report on the universal proxy card: The indisputable fact about the universal proxy card (UPC) is that it is a far superior way for shareholders to exercise their voting franchise than the two-card system that has dominated proxy contests for decades. Reaching a company’s retail shareholders through Internet forums and social media channels, weekly mailings, telephonic outreach, local newspaper advertisements and user-friendly infographics.