We would like to share some helpful advice on how to prepare for the upcoming 2017 proxy season. Following Michael Melbinger's blog on Tuesday (Say on Pay Frequency Vote in 2017), his clients wanted to know the rest of his tips and reminders for 2017 proxy season. The long form...
3 Trends Affecting Today’s Compensation Committees
In this article, Cameco’s Jim Curtiss discusses several trends that will continue to impact compensation committees in the months ahead: 1) greater emphasis on transparency, 2) greater scrutiny of the CD&A, and 3) greater oversight from proxy...
EpiPen Maker Dispenses Outsize Pay
In this Wall Street Journal article entitled, "EpiPen Maker Dispenses Outsize Pay", the author points out potential excessive pay (based on peer group) and aligning business decisions purely due to desired achievement of incentive plans versus company profits. Here is a...
What You Need to Know About NASDAQ’s Golden Leash Disclosure
Because NASDAQ’s new golden leash disclosure requirement is effective, we would like to pass along this Gibson Dunn memo about how it intersects with the Form 8-K disclosure requirements. Please let us know if you have...
Beware: Binding Say on Pay, May Pay the CEO more.
Four recent, independent articles paint an interesting picture on the topic of binding Say on Pay votes. 1. The UK’s potential new prime minister, post Brexit, could move to a binding Say on Pay vote to curb CEO pay (read more here). 2. A recent article by Fortune, suggests...
Chris Crawford quoted in HBJ Article: “Houston’s Highest Paid Pubco CEOs – Are They Worth It?”
Our President, Chris Crawford, was recently quoted in a Houston Business Journal article entitled, "Houston's Highest Paid Pubco CEOs - Are They Worth It?". Check out the full article...
NFPCC Featured in RIGZONE article – “Midstream: A Silver Lining in Oil, Gas Downturn?”
While the upstream sector continues to struggle in the low oil price environment, RIGZONE's Valerie Jones explores possible opportunities in midstream. NFPCC's own, Kevin Kuschel (Managing Partner) and Josh Whittaker (Senior Consultant), were featured in her article entitled,...
What do Disney and Yahoo have in Common?
An interesting read on Compensation Litigation! History may not always repeat itself but often times, rhymes. The Delaware Court of Chancery has issued an opinion on a Section 220 demand made against Yahoo which is very similar to the Disney case several years back. Disney...
SEC’s Proposed Rules Requiring Member Companies to “Clawback” Excess Incentive-Based Compensation
SEC's Proposed Rules Requiring Member Companies to "Clawback" Excess Incentive-Based Compensation Article Written by Fulcrum Partners LLC MARKET TREND: There continues to be serious concern among regulators over the compensation of certain public company executives. The SEC's...
Summary of ISS’ New Policies for 2016
For companies subject to ISS’ United States policy, there are several changes to be aware of: Management Proposals • Director overboarding: o Subject to the one-year transition period described below, ISS will issue a negative vote recommendation on directors who are not...
Analyzing Male vs. Female Executive Pay
The Washington Post ran an interesting article summarizing research attempting to analyze male vs. female executive pay. Among several conclusions, the researchers found that female executives are paid less than their male counterparts, and in particular, have less incentive...
Chris Crawford Interviewed by RIGZONE Regarding Oil & Gas Company Layoffs
Our President, Chris Crawford, was recently interviewed by Valerie Jones with RIGZONE regarding oil & gas company layoffs. Read the full interview entitled, "Layoffs Continue to Affect Oil, Gas Companies at All...
IN THE NEWS: NFP Compensation Consulting Featured on DownstreamToday.com
DownstreamToday recently interviewed NFPCC President Chris Crawford and Senior Consultant Josh Whittaker about the company’s findings from its recent midstream compensation survey. In the interview, Crawford and Whittaker detail the sector’s major compensation trends. Listen...
The Pay Ratio Disclosure
The pay ratio disclosure has been a topic of great debate since the passing of the Dodd Frank Act, but it’s seen a particular uptick in coverage over the past few years. While many companies stayed ahead of the curve by instituting clawback policies, due to pressure from...
Shareholder Outreach Works!
The Dodd-Frank Act was passed several years ago, and since then NFP Compensation Consulting has been helping companies reach out to their shareholders, stakeholders, and advisory groups to educate, discuss and update issues around governance and compensation. We have always...
Dodd-Frank Co-Author Disappointed on Pay Votes, Cites Fund Managers
I read this article, "Dodd-Frank Co-Author Disappointed On Pay Votes, Cites Fund Managers", that Barney Frank is disappointed with Say on Pay, and that it has not made more changes in the board room regarding compensation. However, he isn’t living in the...
Shareholders Focus on Pay Practices
In this article we're sharing, "Shareholders Focus on Pay Practices," Andrew McIlvaine details how activist shareholders are calling on several large companies to focus on issues such as the pay gender gap and employee motivation. According to Chris...
Corporate Sustainability: The Board’s Role in Oversight
In this article we're sharing, MCC (Metropolitan Corporate Counsel) interviews Robyn Bew, director of research, National Association of Corporate Directors (NACD), which recently published its Director’s Handbook on Oversight of Corporate Sustainability...
Say-On-Pay Vote Did Not Create Disclosure Obligation
Good article by Steve Quinlivan with Stinson Leonard Street...
Headwinds and Tailwinds for Oil & Gas
We thought we'd share this great article, "Headwinds and Tailwinds for Oil & Gas" written by Chris Reinsvold, Vice President at Pearson Partners International. Reinsvold wrote, "Longer term drivers of opportunity (tailwinds) and challenges...
Tailor Incentive Compensation to Strategy
Because incentive compensation structure is one of the tools top management uses to pursue corporate goals, it must be made consistent with strategy. When designing the structure, a company's top executives should think of it in terms of four aspects of corporate policy:...
A First Look at ISS’ Equity Plan Scorecard
As announced in their draft rules published in December, ISS is adopting an Equity Plan Scorecard Model (EPSC) that is intended to consider a range of positive and negative factors rather than their traditional "pass" or "fail" tests. They are hoping to use...
Hear Ye, Hear Ye: Is ISS Starting to Listen? Yes and No…
Last month ISS "inflated" a new game ball with a new policy update for peer group selection in the energy industry. They have decided to move from peer selection on revenue to that of market cap. We discuss at length the issue and wonder if this will be coming for...
Choosing a Strategic Compensation Consultant
Choosing the right consulting firm is more important than ever before. How do you know which type of consulting firm is best suited to meet your needs? This article breaks down the different types of consulting firms and how each accommodates to a particular type of...
ISS and Glass Lewis Continue to Clinch the Purse Strings
There is one looming question for public company management teams and board of directors which always creeps into discussions related to compensation planning: How much will ISS and Glass Lewis move the target for their pay-for-performance and governance models in the coming...
SEC Guidance May Lessen Investment Adviser Demand for Proxy Advisory Services
Pulled from Harvard Law School's Forum on Corporate Governance and Financial Regulation, this article discusses recent SEC guidance related to investment adviser demand for proxy advisory services. We have noticed an increased concern amongst our public...
A Lesson in Dealing with Shareholder Advisory Firms
Now headed into the fourth year of Dodd Frank and Say-On-Pay, many companies have had the unfortunate experience of crossing paths with ISS and their seemingly unexplainable influence on otherwise logical shareholders. We have helped many clients successfully navigate...
Question: Oil company directors & officers own 3% of US oil & gas company shares. Is that too low?
We were asked on Twitter the following question: "Oil Company directors and officers own 3% of U.S oil, gas company shares. Is that too low?" http://fuelfix.com/blog/2014/10/21/report-retirees-401ks-hold-most-shares-in-oil-gas-industry/ Our Resonse: The amount...
Executive Pay: The Sin Tax of the Future
Executive pay is about to become the new sin tax. Executive Pay continues to be one of the most heated discussions in America. In addition, the US Government is in serious debt ($16.5 trillion) and running a deficit each year ($500 billion); the gap between the average...
Sustainability Bonuses: A New Trend That May Become the Norm
A New Trend that May Become the Norm We have seen a recent uptick in companies, especially Fortune 500, integrating metrics that are more about the company sustainability and/or social responsibility. While these metrics are not the majority of the weight for determining...
Chipotle Fails Say on Pay with High TSR
Last week we saw the news come out of Chipotle failing the Say on Pay vote, and it was NOT because of performance. In fact, the company saw 1, 3 and 5-year TSRs in the 83rd, 77th and 95th percentiles as compared to peers, yet they received a "no" vote...
Not-for-Profit Board Best Practices from NACD Program
Our group attended the NACD Tri-Cities event last week in Houston, where the topic was not-for-profit board best practices. The panel discussion touched on some really great points on what the modern not-for-profit boards should look like and be focused on. The...
Why Caps on Executive Pay Won’t Work
We have all heard the argument for caps on executive compensation. Although we here at NFPCC believe that compensation should be targeted at appropriate levels, tied to performance, and sustainable, the idea to cap executive compensation has a lot of holes in it. The...
What Directors Should Know: Preparations for Compensation Decisions in 2014
Compensation has become a larger issue in the past three to five years, and the directors of public, private and not-for-profit companies have to spend more time and effort on these decisions. Although this can be viewed as a negative, it does give the directors...
Yet Again the Media Distorts Executive Pay
USA Today created another amazing twist of CEO pay realities. In an article released on Oct. 21 gives us one more example of magazines and newspapers distorting truths to sell in a more competitive online news environment. Here is a link to the...
Generation Gap in Houston’s Workforce
Were you able to tune in to our Managing Director, Josh Henke, speak on the Generation Gap in Houston's workforce? Here's the link to KUHF/NPR's Houston Matters broadcast from October 1,...
10 Ways to Calculate Pay Disparity (Since the SEC said you can)
It’s official. The SEC has followed through with pay disparity disclosures. This is one of those rules that bureaucrats picked up from the media and turned it into a law, without any real thought as to the cost of calculating this number versus the value it provides...
Join us on October 1st!
Join us for a joint presentation with Vinson & Elkins entitled: "Executive Compensation Compliance and Trends in the Energy Industry: Insights from both Consultants and Attorneys". It is here in Houston on October 1, but is also available via webcast. Click here...
Feds Poised to Act on CEO Pay
"A rule requiring public companies to disclose how much their chief executives are paid compared to average workers will be issued 'in the near future,' according to the chairwoman of the Securities and Exchange Commission (SEC). The rule was ordered under the...
Stock Options on the Decline
For years we have been watching the trends in long-term incentives. As we had predicted, more and more companies are decreasing the use of stock options as a long-term incentive vehicle. NFP Compensation Consulting has written books on the subject, one of which is...
Dodd-Frank Update: Where Do We Stand?
Here is an important update on the status of the Dodd-Frank Act that we obtained from the National Association of Corporate Directors (NACD). This is an amazing organization whose primary mission is to "Advance Exemplary Board Leadership," and they do it...
The Profile of a Say-on-Pay Failure
55. That is the number of publicly traded companies which have failed the Say-on-Pay vote as of July 23, 2013. That is two less than the total of 2012 and 18 more than in 2011. It has been three years since the Dodd-Frank Act initiated this provision of a shareholder...
It’s Good to be an Executive on Payday
NFP Compensation Consulting performed an analysis of the 720 highest-paid local executives who work for publicly traded companies in Houston for the Houston Chronicle. Check out the full article, including quotes from NFPCC's own Josh Henke and Jon Covington, entitled,...
The Executive Incentive Plan Design: Who Creates, Who Critiques?
In any company, the relationship among the management team, compensation committee and outside advisers can be complex. This dynamic interplay of parties often comes to a crescendo in the executive incentive plan design process. When a company implements an executive...
Heinz Shareholders Reject Golden Parachute, But Sale Will Go On
Say on Parachute Payments: While well intentioned, it doesn’t seem like our lawmakers fully thought through the small portion of the Dodd-Frank Act that deals with the advisory vote for Say on Parachute Payments. Exhibit A: Heinz Shareholders recently rejected...
Justifying Pay: It’s Not All Performance
In a postrecession era of heightened sensitivity to compensation, setting compensation is no longer a check-the-box-process but a dynamic process compelling human resources professionals to justify pay packages, specifically to senior management. So where is the line of...
Government Proposes $500,000 Compensation Deduction Limit Paid by Health Insurance Providers
If your company receives federal money, watch out! CHiPs are essentially capped from deducting any compensation to any executive over $500,000. It doesn't’t stop them from paying $500,000, but the cost of doing so just went up. Why $500,000? It’s...
NFP Compensation Consulting Launches 2013 Long-Term Incentive Survey
NFP Compensation Consulting is pleased to announce the launch of our 2013 Energy Industry Long-Term Incentive Survey. NFPCC understands utilizing long-term incentives to attract, retain and motivate talent in an extremely competitive energy labor market is imperative. Our...
Say on Pay 2013 Begins With Three Failures
It is that time of year again for shareholder say on pay votes. Already we are seeing companies struggling and three failures. Below we have our analysis of these failures. All proxy season we will be updating you with our analyses of the failures, and the lessons which...
Small and Emerging Growth Companies Will Get First Taste of Say-on-Pay in 2013
In January of 2011, the SEC adopted the rules on which companies would be affected by say-on-frequency and say-on-pay votes under the Dodd-Frank Act. The rules stated that public companies are required to conduct shareholder advisory votes to a) determine...