In just a few weeks, 2017 will descend upon us. We on the Ipreo Blog are loath to make any predictions about the future, but if it’s anything like 2016, it will be an eventful, tumultuous year. And not just because of the shifting political landscape.
Due to rules set forth by the SEC under the Dodd-Frank act, companies are required to hold “say-on-pay” votes at least once every three years, beginning with the date of the first annual shareholders meeting or after January 21, 2011. Especially significant for 2017 is the fact that companies are also required to hold a ‘frequency’ vote at least once every six years in order to allow shareholders to decide how often they would like to be presented with the say-on-pay vote. When you do the math (here: 2011 + 6 = 2017), you realize why next year is an important one for this regulation.
Scott Amling, a Corporate Governance Account Manager in Ipreo’s Raleigh office, and Brian Matt, Ipreo’s Director and Global Head, Strategy and Innovation, wrote a paper explaining why not having an annual say on pay proposal could more easily lead to higher withhold votes for compensation committee members.