A Lesson in Dealing with Shareholder Advisory Firms

Now headed into the fourth year of Dodd Frank and Say-On-Pay, many companies have had the unfortunate experience of crossing paths with ISS and their seemingly unexplainable influence on otherwise logical shareholders.  We have helped many clients successfully navigate through negative ISS recommendations and develop plans to reduce the risk of future run ins.  Our… Read more »

Question: Oil company directors & officers own 3% of US oil & gas company shares. Is that too low?

We were asked on Twitter the following question: "Oil Company directors and officers own 3% of U.S oil, gas company shares.  Is that too low?" http://fuelfix.com/blog/2014/10/21/report-retirees-401ks-hold-most-shares-in-oil-gas-industry/ Our Resonse: The amount executives and directors own as a percent of a company is tied to the size of the company.  The larger the company, the smaller the… Read more »

Executive Pay: The Sin Tax of the Future

Executive pay is about to become the new sin tax. Executive Pay continues to be one of the most heated discussions in America.  In addition, the US Government is in serious debt ($16.5 trillion) and running a deficit each year ($500 billion); the gap between the average worker and CEO has jumped from 46x in… Read more »

Sustainability Bonuses: A New Trend That May Become the Norm

A New Trend that May Become the Norm We have seen a recent uptick in companies, especially Fortune 500, integrating metrics that are more about the company sustainability and/or social responsibility.  While these metrics are not the majority of the weight for determining payouts, they may be a gatekeeper that prohibits payouts. Companies are using… Read more »

Chipotle Fails Say on Pay with High TSR

Last week we saw the news come out of Chipotle failing the Say on Pay vote, and it was NOT because of performance.  In fact, the company saw 1, 3 and 5-year TSRs in the 83rd, 77th and 95th percentiles as compared to peers, yet they received a "no" vote recommendation from ISS.  It is… Read more »

Not-for-Profit Board Best Practices from NACD Program

Our group attended the NACD Tri-Cities event last week in Houston, where the topic was not-for-profit board best practices.  The panel discussion touched on some really great points on what the modern not-for-profit boards should look like and be focused on.  The speakers stressed that not-for-profits MUST start thinking more like for-profit businesses in order… Read more »

The GM CEO Issue & the Misunderstanding of Executive Compensation

The past three weeks has been a roller coaster for General Motors in the news.  The reason: the media doesn't understand executive compensation structures…again.  The issue of the gap between genders is a big one, and we do not mean to discredit it as being that on average women are making approximately 75% of what… Read more »

Why Caps on Executive Pay Won’t Work

We have all heard the argument for caps on executive compensation.  Although we here at L&A believe that compensation should be targeted at appropriate levels, tied to performance, and sustainable, the idea to cap executive compensation has a lot of holes in it. The argument was most recently made by Mr. Douglas Smith in the… Read more »

What Directors Should Know: Preparations for Compensation Decisions in 2014

Compensation has become a larger issue in the past three to five years, and the directors of public, private and not-for-profit companies have to spend more time and effort on these decisions. Although this can be viewed as a negative, it does give the directors an opportunity to re-evaluate the compensation decision process and systems within the Company and… Read more »