The 2020 proxy season has entered its busiest period during the COVID-19 crisis. Virtual shareholder meetings are now standard operating procedure and have broadly proved successful. While say-on-pay results are in-line with recent years, shareholder proposals have seen substantially higher levels of support.
- 143 have received more than 80% say-on-pay support
- 11 received between 50-80%
- 3 did not receive 50% support
- In Goldman's case, shareholders appeared to have concerns with CEO David Solomon's 2019 bonus. The concern seemed to include a substantial level of public perception risk as both ISS and shareholders highlighted concerns about the compensation in the middle of the COVID-19 economic fallout. Goldman also saw depressed financial results due to legal costs associated with the 1MDB lawsuit in Malaysia. Goldman's board reiterated its confidence in Mr. Solomon and its belief that his compensation is in line with peers and largely tied to shareholder returns.
- Federal Realty Income Trust likely failed to receive majority support due to changes to its long-term incentive midflight. Specifically, the company modified the goals for the 2017-2019 performance period resulting in an above target payout. The changes also will apply to the 2018-2020 performance period. While the changes were not made in response to the COVID-19 crisis, it may prove indicative of shareholder views on changes to existing awards.
Shareholder Proposals. Shareholder proposals are receiving increased support in 2020, including a landmark proposal from the NYC Comptroller calling for Expeditors International of Washington to adopt a diversity policy ensuring women and minorities are included in each slate considered for board seats and CEO. This "Rooney Rule" style proposal was approved with 53% support, a surprising level of support for this type of proposal.
- 21 proposals have received majority support in 2020, up from 12 during the same period in 2019.
- 14 related to governance provisions
- 5 related to social concerns
- 2 related to environmental concerns
- 19 proposals have received between 40-50% support, compared to 23 in 2019.