April 17, 2012

Say on Golden Parachute Votes: Continued Support for Transactional Pay Arrangements

By Margaret Black and Dan Wetzel

The 2011 proxy season introduced three shareholder advisory votes mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. While extensive analysis has been done of Say on Pay and Say on Frequency votes, less attention has been paid to the inauguration of Say on Golden Parachute (SGP) votes, which were required in connection with corporate transactions on or after April 25th, 2011.

This white paper discusses outcomes among the 86 companies that disclosed their SOGP pay arrangements in their merger-related proxies as of February 29, 2012, of which 76 have reported final voting results. The analysis includes:

• The overall level of support for transactional compensation arrangements
• Shareholder support for golden parachute programs, compared to votes on the related transaction
• The impact of ISS recommendations on shareholder votes