Based on filed 8-Ks, two companies have reported the results of the shareholder advisory vote on frequency of the say-on-pay vote as of January 25, 2011. In both, the board recommended a triennial vote. However, the shareholders in one voted for an annual say-on-pay vote, and the other went with a three year vote.
The shareholders in Monsanto voted for the one year frequency (62.2% annual, 35.9% biennial, 1.4% triennial and 0.5% abstain). Given Monsanto status as a large cap and ISS’s one year recommendation, perhaps the surprise here is the number of shareholders electing a biennial vote. ISS was quick to pound its chest, issuing this statement which says “Monsanto investors overwhelmingly defied management’s triennial recommendation and voted for an annual advisory vote on executive compensation.”
But not so fast. Little known Roebling Financial Corp, Inc. filed an 8-K as well, where the shareholders approved a triennial vote (27% annual, 4% biennial, 64% triennial, 5% abstain). Roebling’s proxy statement discloses insider ownership at 22.8% with no institutional owners.
While the end of the story remains to be written, the results make clear what we have been telling clients for months will probably happen: If ISS has significant influence over your shareholder base, expect a one year frequency vote. For the vast majority of other smaller issues (by number, not market cap), you stand a much better chance of obtaining a triennial vote if that is what the Board is willing to recommend.
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