Category: Agenda

Special Fees for CEO Searches?

Given the amount of expertise, judgment and skill required in hiring a new CEO — to say nothing of time — special retainers for leading a CEO search or executive transition used to be de rigueur. But no longer.

A survey conducted by TheCorporateCounsel.net asking if boards had paid a special fee for serving on a CEO search committee received only 14 responses, and among that sample, only 7% reported paying directors a fee. In the same vein, a 2016 study conducted by Equilar found 15 boards that had paid special committee fees, and only one explicitly tasked the committee with CEO search responsibilities.

A look through director compensation disclosures using MyLogIQ’s SEC filings intelligence service shows that CEO search committees with special fees were more common a decade ago than in recent years. Comparative data is difficult to come by given that companies don’t hire new CEOs on a regular basis. However, overall the data appears to paint a picture of special CEO search fees going the way of the dodo.

FedEx Dodges Mandatory Retirement Bullet

Directors are paring down their board seats and opting not to stand for reelection or are alerting companies that they’ll be retiring or resigning, based on a review of recent filings. Directors at companies such as Exelon, Halliburton, Loews and J. Crew Group announced board departures this month, according to SEC filings analyzer MyLogIQ.

Meanwhile, the FedEx board on Jan. 28 announced it had amended its corporate governance guidelines so that its mandatory retirement age guideline would apply to only non-management directors, effective immediately. FedEx founder, CEO and chairman Fred Smith is 74 and would have been required to retire from the board after his 75th birthday. Instead, the board tweaked its guideline, and Smith will remain as board chairman. However, the board also announced that president and COO David Bronczek would join the board, effective immediately.

Are Comp Plans Too Similar?

No two companies are identical. So why should their compensation plans be?

It’s a question that’s frequently being asked by board directors and compensation consultants, especially at this time of year, leading into proxy season, as governance observers are noting an increasing convergence in plan design across the board for companies, such as a heavy reliance on performance-based pay, a movement away from stock options and the use of TSR as an incentive metric.

While sources’ views on the reason for the broad similarities across plans vary, many are questioning whether the homogenization of executive pay plans has gone too far.

Founder’s Dilemma: How Boards Work With a Founder-CEO to Deliver Value

Alphabet, Facebook and Tesla are just a few of the large-cap companies with founders at the helm. And as more companies — particularly those coming from Silicon Valley — go public, boards of founder-led companies are grappling with how to balance governance best practices with the desire to build shareholder value while working with visionary, often non-traditional, leaders. According… Continue reading Founder’s Dilemma: How Boards Work With a Founder-CEO to Deliver Value

Caterpillar Backtracks On Split CEO/Chair Role

Caterpillar has named chief executive Jim Umpleby as chairman of the board, reversing the company’s decision to split the roles last year, reports The Wall Street Journal. Though corporate governance experts argue that oversight and decision-making is improved if the two roles are separated, this only happens at about 40% of S&P 500 companies, according to MyLogIQ. The leadership structure… Continue reading Caterpillar Backtracks On Split CEO/Chair Role

Is the SEC Failing Investors on Cyber-Security Risk?

Hackers hack weakness. They are efficient at finding it and work relentlessly to exploit it. Now, new moves by the SEC are raising questions about whether the regulator is taking the right steps to protect America’s capital markets and investors. Warren Buffett recently declared at the 2018 Berkshire Hathaway annual meeting that cyber risk “is uncharted territory. It’s going to… Continue reading Is the SEC Failing Investors on Cyber-Security Risk?

Turning Around a Low Say-On-Pay Vote

Say-on-pay votes remain a critical way for shareholders to express discontent with executive compensation packages. But they also act as a barometer for shareholder dissatisfaction with the board. Gauging how investors might vote on say on pay ahead of the company’s annual meeting can help avoid an embarrassing or contentious director reelection vote or other… Continue reading Turning Around a Low Say-On-Pay Vote

Clawing Back Pay in the Wake of #MeToo

The #MeToo movement has led directors to take a harder look at internal policies around harassment, including whether they need the ability to claw back the pay of an executive who is entangled in a sexual misconduct scandal. Indeed, boards wield an incredibly important sword in clawbacks, and it can protect directors if a matter… Continue reading Clawing Back Pay in the Wake of #MeToo