This presentation was given by Edward Hauder of Exequity and Reid Pearson of The Altman Group on topi tips companies should consider when requesting shareholders approve a share request for their equity compensation plans
Say on Pay (and Evaluating the Impact of Shareholder Advisory Groups)Edward Hauder
The document summarizes key points about "Say on Pay" (SOP) proposals, which allow shareholders a non-binding vote on executive compensation. It discusses the history and timeline of SOP proposals in the US, forms they can take, and companies that have voluntarily adopted them. It also analyzes voting results for 2010 on mandatory and voluntary SOP proposals, including those that failed to receive majority support. Reasons cited for failed votes include pay not aligned with performance and concerns about incentive plans and severance agreements.
Special Report: Equity Plan Proposal Failures: 2007-2009, Lessons to Consider...Edward Hauder
In this Special Report, Ed Hauder of Exequity and Reid Pearson of The Altman Group examine the 38 equity plan proposals that failed out of approximately 2,200 total proposals put forward by Russell 3,000 companies from 2007 through 2009. The authors detail several lessons for companies to consider when requesting shares, the most significant of which are to ensure that both dilution and burn rate are not excessive. The Special Report also looks at the success rates of RiskMetrics/ISS' against vote recommendations for equity plan proposals and finds that they vary, sometimes significantly, based on the industry group. Similarly, the percent of equity plan proposals that failed varies based on industry group. Companies that are considering requesting shareholders to approve additional shares for their equity compensation plans will have a better idea of the challenges they face after reading this Special Report.
This presentation was used by Ed Hauder at the National Association of Stock Plan Professionals' Chicago Chapter meeting on December 8, 2009. In it Ed walks through the newly announced policy updates from RiskMetrics Group for 2010 as well as their Compensation FAQs, and then covers tips to get shareholders to approve equity plan proposals.
Presentation given to the National Association of Stock Plan Professionals' Chicago Chapter on the Executive Compensation and Corporate Governance provisions of the Dodd-Frank Act, which was signed into law by President Obama on July 21, 2010.
The fact is that most of the executives who did not earn a salary or cash bonus last year were nevertheless increasing
their personal wealth in other ways, sometimes in addition to having significant stockholdings.
Structured investments are financial products that provide returns linked to the performance of underlying assets but may offer some degree of downside protection. They can be used by investors both before and after retirement to provide market-linked returns or guaranteed income. Close to retirement, products with capital protection can ensure returns while protecting savings. In retirement, structured products can provide enhanced stable income through quarterly paying notes. Overall, structured products provide alternatives to traditional investments and annuities that balance growth, income and risk management over the long term.
EY Human Capital Conference 2012: Trends in performance-based remunerationEY
This presentation considers regulatory trends in performance-based remuneration as well as trends in executive compensation, both short-term incentives (STI) and long-term incentives (LTI).
Say on Pay (and Evaluating the Impact of Shareholder Advisory Groups)Edward Hauder
The document summarizes key points about "Say on Pay" (SOP) proposals, which allow shareholders a non-binding vote on executive compensation. It discusses the history and timeline of SOP proposals in the US, forms they can take, and companies that have voluntarily adopted them. It also analyzes voting results for 2010 on mandatory and voluntary SOP proposals, including those that failed to receive majority support. Reasons cited for failed votes include pay not aligned with performance and concerns about incentive plans and severance agreements.
Special Report: Equity Plan Proposal Failures: 2007-2009, Lessons to Consider...Edward Hauder
In this Special Report, Ed Hauder of Exequity and Reid Pearson of The Altman Group examine the 38 equity plan proposals that failed out of approximately 2,200 total proposals put forward by Russell 3,000 companies from 2007 through 2009. The authors detail several lessons for companies to consider when requesting shares, the most significant of which are to ensure that both dilution and burn rate are not excessive. The Special Report also looks at the success rates of RiskMetrics/ISS' against vote recommendations for equity plan proposals and finds that they vary, sometimes significantly, based on the industry group. Similarly, the percent of equity plan proposals that failed varies based on industry group. Companies that are considering requesting shareholders to approve additional shares for their equity compensation plans will have a better idea of the challenges they face after reading this Special Report.
This presentation was used by Ed Hauder at the National Association of Stock Plan Professionals' Chicago Chapter meeting on December 8, 2009. In it Ed walks through the newly announced policy updates from RiskMetrics Group for 2010 as well as their Compensation FAQs, and then covers tips to get shareholders to approve equity plan proposals.
Presentation given to the National Association of Stock Plan Professionals' Chicago Chapter on the Executive Compensation and Corporate Governance provisions of the Dodd-Frank Act, which was signed into law by President Obama on July 21, 2010.
The fact is that most of the executives who did not earn a salary or cash bonus last year were nevertheless increasing
their personal wealth in other ways, sometimes in addition to having significant stockholdings.
Structured investments are financial products that provide returns linked to the performance of underlying assets but may offer some degree of downside protection. They can be used by investors both before and after retirement to provide market-linked returns or guaranteed income. Close to retirement, products with capital protection can ensure returns while protecting savings. In retirement, structured products can provide enhanced stable income through quarterly paying notes. Overall, structured products provide alternatives to traditional investments and annuities that balance growth, income and risk management over the long term.
EY Human Capital Conference 2012: Trends in performance-based remunerationEY
This presentation considers regulatory trends in performance-based remuneration as well as trends in executive compensation, both short-term incentives (STI) and long-term incentives (LTI).
1. Business succession planning can be achieved through a buy-sell agreement funded by life insurance policies on owners. This allows the business to purchase shares from an estate.
2. Key person insurance offsets lost cash flow if important employees die or leave by providing funds.
3. Executive benefits like deferred compensation plans incentivize key employees to stay by providing retirement funds from a single insurance policy's cash value.
Combining these needs into one policy provides an efficient solution that addresses all the business's succession planning requirements.
This document summarizes a presentation on SMSFs and real property applications. The presentation discusses how SMSFs have become a preferred vehicle for holding real estate, replacing the traditional family trust model. It describes how real estate can be held in an SMSF, with the SMSF leasing the property to a related business. This allows the business to deduct rent and the SMSF to accumulate wealth for retirement with favorable tax treatment compared to a family trust. The presentation focuses on various real estate arrangements involving SMSFs and the superannuation regulations governing related party transactions.
The document summarizes proposed legislation that would treat income from carried interest as ordinary income rather than capital gains. It would apply to investment partnership interests where the partner performs investment management services. Income, gains, losses and distributions would generally be treated as ordinary, with some exceptions for qualified capital interests. The legislation has passed the House multiple times but has faced resistance in the Senate. It is estimated to raise $10.5 billion in tax revenue over 5 years.
Top10 SMSF strategies for 2011/12 presentation conducted by Aaron Dunn of The SMSF Academy in conjunction with Business Fitness.
Download a copy of the free webinar, by visiting http://thesmsfacademy.com.au/free-webinars/
This document discusses the valuation and characteristics of stocks. It covers preferred stock, which is a hybrid security with characteristics of both common stock and bonds. Preferred stock pays fixed dividends, has priority over common stock in claims to assets and income, and may be cumulative or convertible. Common stock represents ownership in a company and entitles the owner to voting rights and residual claims to income and assets. The document discusses how to value preferred stock as a perpetuity and common stock using the dividend valuation model that incorporates growth. It also defines the expected rate of return for stocks.
This document summarizes the key features of ordinary shares. Ordinary shareholders have a residual claim on the company's income and assets. They are entitled to any dividends declared after other financial obligations are met, but dividends are at the discretion of the board of directors and are not guaranteed. Ordinary shareholders also have voting rights that allow them to elect the board of directors and vote on major company decisions. Their shares represent ownership in the company but are also considered a risky investment due to uncertainty around dividends and potential for loss of investment value.
This document provides an overview of common stock and differences between debt and equity financing. It discusses key differences such as creditors having legal right to repayment while investors only have expectation, equityholders having last claim on assets in bankruptcy. Common stockholders are residual owners who receive dividends and capital gains. Preemptive rights protect common stockholders from dilution from new share issuances. Voting rights, dividends and international stock issues are also summarized.
allstate Quarterly Investor Information Earnings Press Release 2004 1stfinance7
Allstate reported strong financial results for the first quarter of 2004, with a 43% increase in net income and 52% increase in operating income per share compared to the first quarter of 2003. Operating income reached $1 billion for the first quarter, driven by higher premiums earned in Property-Liability and higher realized capital gains. Property-Liability underwriting income increased 109% due to higher premiums, favorable loss trends, and lower catastrophes. Allstate Financial also saw increases in premiums and deposits as well as operating income. As a result of the strong performance, Allstate increased its full-year 2004 operating income per share guidance.
Baird September 2012 Facility Services ReportDavid Crace
RW Baird is the leading financial institution tracking the uniform industry. This is the September 2012 update which hallmarks a downward shift in outlook.
The document discusses key considerations for drafting enforceable teaming agreements for government contracts. It defines joint ventures and prime/subcontract relationships and notes regulatory requirements for joint ventures. It summarizes the Cyberlock court case which found that a teaming agreement needs specific terms like work scope and subcontract details to be enforceable, not just a generic agreement to agree. The document aims to help drafting agreements that meet needs of both parties and comply with government regulations.
The document discusses key considerations for drafting enforceable and helpful teaming agreements, including joint ventures and prime/subcontractor agreements, for government contracts. It provides an overview of the differences between joint ventures and prime/subcontractor relationships. It also summarizes the Cyberlock court case, which established that a detailed teaming agreement with agreed upon terms is needed before parties can jointly pursue a government contract, or the agreement may not be enforceable.
dividend policy and its determinants and constraintsPriyanka Sahoo
The document discusses the purpose of a dividend policy and its determinants and constraints. The purpose of a dividend policy is to determine the portion of net income paid out to shareholders in order to maximize shareholder wealth while providing sufficient financing for the company. A dividend policy must consider factors like dividend payout ratios, stable dividends, divisible profits, legal restrictions, owners' considerations, capital market conditions, industry type, ownership structure, and future financial needs. Constraints on a dividend policy include legal restrictions, financial condition, access to capital markets, and liquidity.
This M Intelligence piece will explore the product mechanics and design considerations of Whole Life (WL) insurance. There are two general categories of WL...
The chapter discusses dividend policy and its importance as a financing decision for corporations. It defines dividend policy as the board of director's decision regarding how much of the company's residual earnings to distribute to shareholders. The mechanics of dividend payments are also outlined, including the declaration date, holder of record date, ex-dividend date, and payment date. Key assumptions and theories around dividend policy such as M&M's dividend irrelevance theorem and the "bird in the hand" argument are introduced.
Northwestern Mutual has a unique investment approach that contributes to strong financial performance. They invest across all major asset classes including fixed income, equities, real estate, and private investments. This diversification helps reduce volatility while still achieving competitive returns. Over the past 20 years, their portfolio has averaged an annual return of 8.24% while exposing assets to less risk than stocks alone. Their balanced approach provides policyholders with consistent, reliable growth of their life insurance savings.
Some executives who accumulate a substantial ownership position in the company hedge or pledge their shares to limit their financial risk. Should the board of directors allow this to occur?
Here are the key steps:
1. SMSF borrows $1,000,000 from bank via LRBA to acquire units in a unit trust
2. Unit trust (Jones Property Trust) is established with the SMSF and others as unit holders. Unit trust acquires the land.
3. Unit trust undertakes the property development using the borrowed funds
4. Upon completion, the developed land is held via separate titles by the unit trust
5. Income/profits from the developed land/titles are distributed to the unit holders (SMSF). The SMSF uses these distributions to repay the bank loan.
The unit trust structure allows the SMSF to undertake the development via the trust, avoiding
1) Exceptions to the early withdrawal penalty from retirement accounts include distributions for qualified education expenses, home purchases up to $10,000, and health insurance premiums during unemployment.
2) Distributions due to death, disability, medical expenses, IRS levies, and qualified domestic relations orders are also exempt from the penalty.
3) The substantially equal periodic payments exception allows penalty-free withdrawals if amounts are taken at least annually based on an IRS-approved calculation method until age 59.5.
Many people consider executive compensation to be excessive, but is it really? The answer may lay in the eye of the beholder. A thought provoking discussion on the topic.
Northwestern Mutual's permanent life insurance policies offer financial security for policyholders' beneficiaries. The company takes a unique long-term investment approach, allocating assets across various classes like bonds, stocks, and real estate to generate higher returns with less risk than alternatives. This balanced portfolio has allowed Northwestern Mutual to achieve above-average returns of 8.24% annually from 1990-2009 while experiencing lower volatility than stock-only investments.
This document is a proxy statement from Becton, Dickinson and Company inviting shareholders to attend their 2006 Annual Meeting on January 31, 2006. It provides information on voting procedures, the election of directors, board committees, executive compensation, auditor selection, and shareholder proposals. Shareholders are asked to vote on electing directors, ratifying auditor selection, and two shareholder proposals relating to an environmental report and cumulative voting.
This document discusses HD water, which is produced using Sweden technology. It claims HD water kills 99.9% of germs, has scientifically proven health benefits, and consists of water clusters of 6 molecules that are easily absorbed by cells. Several testimonials praise HD water's effects of increasing energy, improving skin health, aiding digestion, and reducing colds. The document promotes drinking HD water from Halsa antibacterial bottles for health benefits.
1. Business succession planning can be achieved through a buy-sell agreement funded by life insurance policies on owners. This allows the business to purchase shares from an estate.
2. Key person insurance offsets lost cash flow if important employees die or leave by providing funds.
3. Executive benefits like deferred compensation plans incentivize key employees to stay by providing retirement funds from a single insurance policy's cash value.
Combining these needs into one policy provides an efficient solution that addresses all the business's succession planning requirements.
This document summarizes a presentation on SMSFs and real property applications. The presentation discusses how SMSFs have become a preferred vehicle for holding real estate, replacing the traditional family trust model. It describes how real estate can be held in an SMSF, with the SMSF leasing the property to a related business. This allows the business to deduct rent and the SMSF to accumulate wealth for retirement with favorable tax treatment compared to a family trust. The presentation focuses on various real estate arrangements involving SMSFs and the superannuation regulations governing related party transactions.
The document summarizes proposed legislation that would treat income from carried interest as ordinary income rather than capital gains. It would apply to investment partnership interests where the partner performs investment management services. Income, gains, losses and distributions would generally be treated as ordinary, with some exceptions for qualified capital interests. The legislation has passed the House multiple times but has faced resistance in the Senate. It is estimated to raise $10.5 billion in tax revenue over 5 years.
Top10 SMSF strategies for 2011/12 presentation conducted by Aaron Dunn of The SMSF Academy in conjunction with Business Fitness.
Download a copy of the free webinar, by visiting http://thesmsfacademy.com.au/free-webinars/
This document discusses the valuation and characteristics of stocks. It covers preferred stock, which is a hybrid security with characteristics of both common stock and bonds. Preferred stock pays fixed dividends, has priority over common stock in claims to assets and income, and may be cumulative or convertible. Common stock represents ownership in a company and entitles the owner to voting rights and residual claims to income and assets. The document discusses how to value preferred stock as a perpetuity and common stock using the dividend valuation model that incorporates growth. It also defines the expected rate of return for stocks.
This document summarizes the key features of ordinary shares. Ordinary shareholders have a residual claim on the company's income and assets. They are entitled to any dividends declared after other financial obligations are met, but dividends are at the discretion of the board of directors and are not guaranteed. Ordinary shareholders also have voting rights that allow them to elect the board of directors and vote on major company decisions. Their shares represent ownership in the company but are also considered a risky investment due to uncertainty around dividends and potential for loss of investment value.
This document provides an overview of common stock and differences between debt and equity financing. It discusses key differences such as creditors having legal right to repayment while investors only have expectation, equityholders having last claim on assets in bankruptcy. Common stockholders are residual owners who receive dividends and capital gains. Preemptive rights protect common stockholders from dilution from new share issuances. Voting rights, dividends and international stock issues are also summarized.
allstate Quarterly Investor Information Earnings Press Release 2004 1stfinance7
Allstate reported strong financial results for the first quarter of 2004, with a 43% increase in net income and 52% increase in operating income per share compared to the first quarter of 2003. Operating income reached $1 billion for the first quarter, driven by higher premiums earned in Property-Liability and higher realized capital gains. Property-Liability underwriting income increased 109% due to higher premiums, favorable loss trends, and lower catastrophes. Allstate Financial also saw increases in premiums and deposits as well as operating income. As a result of the strong performance, Allstate increased its full-year 2004 operating income per share guidance.
Baird September 2012 Facility Services ReportDavid Crace
RW Baird is the leading financial institution tracking the uniform industry. This is the September 2012 update which hallmarks a downward shift in outlook.
The document discusses key considerations for drafting enforceable teaming agreements for government contracts. It defines joint ventures and prime/subcontract relationships and notes regulatory requirements for joint ventures. It summarizes the Cyberlock court case which found that a teaming agreement needs specific terms like work scope and subcontract details to be enforceable, not just a generic agreement to agree. The document aims to help drafting agreements that meet needs of both parties and comply with government regulations.
The document discusses key considerations for drafting enforceable and helpful teaming agreements, including joint ventures and prime/subcontractor agreements, for government contracts. It provides an overview of the differences between joint ventures and prime/subcontractor relationships. It also summarizes the Cyberlock court case, which established that a detailed teaming agreement with agreed upon terms is needed before parties can jointly pursue a government contract, or the agreement may not be enforceable.
dividend policy and its determinants and constraintsPriyanka Sahoo
The document discusses the purpose of a dividend policy and its determinants and constraints. The purpose of a dividend policy is to determine the portion of net income paid out to shareholders in order to maximize shareholder wealth while providing sufficient financing for the company. A dividend policy must consider factors like dividend payout ratios, stable dividends, divisible profits, legal restrictions, owners' considerations, capital market conditions, industry type, ownership structure, and future financial needs. Constraints on a dividend policy include legal restrictions, financial condition, access to capital markets, and liquidity.
This M Intelligence piece will explore the product mechanics and design considerations of Whole Life (WL) insurance. There are two general categories of WL...
The chapter discusses dividend policy and its importance as a financing decision for corporations. It defines dividend policy as the board of director's decision regarding how much of the company's residual earnings to distribute to shareholders. The mechanics of dividend payments are also outlined, including the declaration date, holder of record date, ex-dividend date, and payment date. Key assumptions and theories around dividend policy such as M&M's dividend irrelevance theorem and the "bird in the hand" argument are introduced.
Northwestern Mutual has a unique investment approach that contributes to strong financial performance. They invest across all major asset classes including fixed income, equities, real estate, and private investments. This diversification helps reduce volatility while still achieving competitive returns. Over the past 20 years, their portfolio has averaged an annual return of 8.24% while exposing assets to less risk than stocks alone. Their balanced approach provides policyholders with consistent, reliable growth of their life insurance savings.
Some executives who accumulate a substantial ownership position in the company hedge or pledge their shares to limit their financial risk. Should the board of directors allow this to occur?
Here are the key steps:
1. SMSF borrows $1,000,000 from bank via LRBA to acquire units in a unit trust
2. Unit trust (Jones Property Trust) is established with the SMSF and others as unit holders. Unit trust acquires the land.
3. Unit trust undertakes the property development using the borrowed funds
4. Upon completion, the developed land is held via separate titles by the unit trust
5. Income/profits from the developed land/titles are distributed to the unit holders (SMSF). The SMSF uses these distributions to repay the bank loan.
The unit trust structure allows the SMSF to undertake the development via the trust, avoiding
1) Exceptions to the early withdrawal penalty from retirement accounts include distributions for qualified education expenses, home purchases up to $10,000, and health insurance premiums during unemployment.
2) Distributions due to death, disability, medical expenses, IRS levies, and qualified domestic relations orders are also exempt from the penalty.
3) The substantially equal periodic payments exception allows penalty-free withdrawals if amounts are taken at least annually based on an IRS-approved calculation method until age 59.5.
Many people consider executive compensation to be excessive, but is it really? The answer may lay in the eye of the beholder. A thought provoking discussion on the topic.
Northwestern Mutual's permanent life insurance policies offer financial security for policyholders' beneficiaries. The company takes a unique long-term investment approach, allocating assets across various classes like bonds, stocks, and real estate to generate higher returns with less risk than alternatives. This balanced portfolio has allowed Northwestern Mutual to achieve above-average returns of 8.24% annually from 1990-2009 while experiencing lower volatility than stock-only investments.
This document is a proxy statement from Becton, Dickinson and Company inviting shareholders to attend their 2006 Annual Meeting on January 31, 2006. It provides information on voting procedures, the election of directors, board committees, executive compensation, auditor selection, and shareholder proposals. Shareholders are asked to vote on electing directors, ratifying auditor selection, and two shareholder proposals relating to an environmental report and cumulative voting.
This document discusses HD water, which is produced using Sweden technology. It claims HD water kills 99.9% of germs, has scientifically proven health benefits, and consists of water clusters of 6 molecules that are easily absorbed by cells. Several testimonials praise HD water's effects of increasing energy, improving skin health, aiding digestion, and reducing colds. The document promotes drinking HD water from Halsa antibacterial bottles for health benefits.
This document discusses compensation and its various components. It begins by defining compensation as the extrinsic rewards employees receive in exchange for their work, such as wages, salaries, bonuses, and benefits. It then covers different types of direct compensation like pay and incentives, as well as indirect compensation like benefits and services. The document also discusses several theories of compensation including reinforcement theory, expectancy theory, equity theory, and agency theory. Finally, it outlines the major components of compensation, including basic wages/salaries, dearness allowance, commissions, profit sharing, fringe benefits, reimbursements, and sickness/pregnancy benefits.
Internship Report at Texeurope (BD) Ltd. by AzadMd. Azad Hosen
The document provides an overview of Texeurop (BD) Ltd., an export-oriented textile company in Bangladesh. It details the company's facilities, production processes, products, customers, and organizational structure. Texeurop produces knitted fabrics and garments through knitting, dyeing, and sewing operations. It has over 500 employees organized across departments like knitting, dyeing, garments, and maintenance. Major customers include JC Penney, Walmart, and H&M.
Eureka Forbes Ltd. (EFL) has a well-organized sales force structure with focused leadership from EuroChamps. Each EuroChamp leads a group of 4 sales representatives. EuroChamps have a strict daily routine including activity reports, collecting payments, and product demonstrations. EFL provides new recruits with training programs like "My First Week at EFL" and manuals translated to local languages. EuroChamps receive close supervision with daily and weekly performance reviews. Compensation is linked to sales targets and completion of stages in the selling process rather than just sales volume.
Compensation refers to the total monetary and non-monetary pay provided to employees in exchange for their work. It includes elements like salary, bonuses, benefits, and commissions. The objectives of compensation planning are to attract, retain, and motivate top talent while ensuring equity and controlling costs. Compensation systems aim to recruit and keep qualified employees, improve morale, reward performance, achieve internal and external fairness, reduce turnover, and modify union practices. Key components of compensation include job descriptions, analysis and evaluation, pay structures, surveys, and employment laws.
Singer Bangladesh Limited uses four methods for employee performance appraisals: MBO, critical incident method, checklist method, and graphic rating scale method. However, using all four methods can be time consuming and costly. The recommendation is for Singer Bangladesh Limited to primarily use the graphic rating scale method (BARS) as it is easy to use, equitable, individualized, action-oriented, clear, provides immediate feedback, judges performance consistently without bias. BARS takes less time compared to using all four methods and provides accurate performance evaluation results.
Cost benefit analysis (CBA) determines the costs and benefits of a proposed project or policy. It has its origins in the 19th century and was established in US law in 1936. CBA is used to assess whether a project is economically feasible, which of multiple options provides the best return, and the optimal timing. It involves identifying costs like financial outlays and environmental impacts, and benefits like increased productivity or time savings. Alternatives are compared by weighing total benefits against total costs. CBA can be used to analyze options for reducing traffic congestion in Dubai by considering costs and benefits of policies, infrastructure projects, and public transport improvements.
The Workmen's Compensation Act aims to provide relief to workmen and their dependents in cases of accidents arising from employment. It covers all workers, including casual laborers, and establishments not covered by the ESI Act. Employers must compensate workers for death, permanent or temporary disablement, or occupational diseases resulting from employment accidents. The amount of compensation depends on the type and extent of injury and the worker's monthly wages. Employers must report accidents resulting in death or serious injury within 7 days and pay compensation promptly, or face penalties.
Compensation management involves designing total compensation packages to attract, motivate and retain employees. It includes direct monetary compensation like salary and incentives, as well as indirect compensation like benefits. Compensation objectives are to recruit and retain talent, boost morale and performance, and ensure legal and internal pay equity. Various factors like an employee's role, skills, market pay and organizational budget affect compensation. Common components of compensation include salary, bonuses, statutory benefits, and stock ownership plans.
Project report on Performance Appraisal of BSNLVipul Sachan
This document provides an overview of Bharat Sanchar Nigam Limited (BSNL), the largest telecommunications company in India. Some key points:
- BSNL was formed in 2000 and provides both fixed line and mobile phone services across India except Delhi and Mumbai.
- It has over 64 million customers and offers services like landlines, mobile, broadband, and intelligent networks.
- BSNL aims to add over 100 million more customers by 2010 but faces challenges from intense competition and criticism over poor customer service.
- Improving customer service and retaining fixed line customers will be important for BSNL's future success in the growing Indian telecommunications market.
The document summarizes the performance measurement and appraisal processes of Coca-Cola Company. It discusses how Coca-Cola establishes performance parameters, evaluates employee performance qualitatively and quantitatively, and uses a Key Result Area approach. It outlines the stages of Coca-Cola's performance measurement including assessing results, setting goals, reviewing performance, and recognizing top performers. Dimensions like business results and competencies are assessed. The steps in Coca-Cola's annual performance appraisal process are also summarized.
The term sheet is the most important document to negotiate with your investors.
However, the excitement that comes from the arrival of the term sheet often serves as a distraction from the finer details — details that can cost you dearly in the future.
For more on these terms, read more on our blog: https://timiacapital.com/blog/14-vc-terms-that-can-ruin-your-startup/
The document provides an overview of a session on teaming arrangements and surviving the challenges of teaming. It discusses the different types of teams and reasons for teaming. It emphasizes the importance of communication, trust, accountability and transparency for successful teaming. It also discusses strategies for small businesses to expand capabilities through teaming and potential pitfalls. The document stresses the importance of due diligence when selecting team members and establishing clear expectations through non-disclosure agreements and negotiated teaming agreements.
This document provides an overview of employee stock ownership plans (ESOPs) including what they are, their benefits, financing options, and common questions. An ESOP is a qualified retirement plan that invests primarily in employer stock. It allows business owners to sell part or all of a company to employees as a succession planning or employee reward strategy. Financing an ESOP can involve commercial loans, mezzanine loans, or seller financing. Strong ESOP candidates have stable earnings, diverse customers, and experienced management beyond the selling shareholders.
HIDA - Expo & Business Exchange: Working With the Federal GovernmentJSchaus & Associates
The document provides an overview of working with the US federal government. It discusses that the federal government is the world's largest purchaser of goods and services, spending billions annually. It notes there are specific rules like the FAR that must be followed. There are long sales cycles and potential for multi-year contracts. It also discusses sources of opportunities like RFIs, RFQs, and RFPs. Winning contracts requires understanding the rules, having core competencies, knowing the players, and building relationships. Leveraging diverse suppliers can provide strategic advantages for both parties through increased opportunities, return on investment, and market share.
The document provides an overview of entrepreneurship and business models. It discusses challenges entrepreneurs face at different stages of starting a business. It also covers key aspects of developing a business model canvas including customer segments, value propositions, channels, customer relationships, revenue streams, key resources, activities, partners, and costs. The document emphasizes the importance of understanding customers and developing a holistic business model approach to achieve long term competitive advantage.
When you are starting up a high growth business or a product line, it is always tempting to try to boost sales by building a large channel partner network, on the premise that the bigger the channel, the more zillions of your products and services they can sell. In our experience, however, many businesses attempting this model struggle to provide a sufficiently strong business proposition for multiple channel partners to carry their products and services. Furthermore, they very often end up creating channel conflict by building direct sales motions in their efforts to improve results.
This document describes the Morgan Stanley Advisory non-discretionary advisory account program. It allows clients to benefit from investment guidance and advice from a Morgan Stanley financial advisor while retaining discretion over account transactions. Key features include developing an investment strategy based on goals and risk tolerance, selecting from investment options like equities and funds, and periodic reviews to maintain the strategy. The financial advisor will work with clients through an assessment and portfolio building process to develop a customized solution.
The document outlines 10 steps to prepare a debt buyer for sale: 1) assess strategic alternatives for selling, 2) determine whether to hire a broker, 3) develop a process, 4) develop a marketing strategy and position the company's story, 5) estimate the company's value, 6) clean up data and highlight underwriting skills, 7) ensure compliance, 8) set up a virtual data room highlighting analytics, 9) involve employees to showcase talent, 10) maintain business focus as results are key.
Most channel networks rarely achieve its full potential as many myths get in the way in deploying a logical and structured channel management approach.
From ITC Agent Conference 2016...
This session is designed for all agency principals, regardless of where they are in their professional life, as "optimizing agency value" is not just a selling thing. In this breakout, you will learn ways to improve your overall business, while increasing value and becoming better prepared for market challenges facing our industry today.
Investment banks can provide a tremendous amount of value to your business. This might be most clear when it comes to assisting with a sale process or preparing for an IPO, but advice and guidance often begins well before a transaction.
You don’t need to be actively pursuing an exit to begin speaking with banks. Building relationships early on can provide perspective on who would be the best partner down the road, and are often great resources before engaging as well.
Read more at https://openviewpartners.com/blog/
Alliance Management From Both Sides of the M&A BoomHarry Atkins
M&A between large, publicly traded companies in the biopharma industry appears to many to have run its course, as the largest seem to have been paired, but M&A involving smaller companies is likely to continue in 2016 and may affect many Alliance Managers. Alliance Management executives have the opportunity to play a significant role on either side, whether an acquirer or being acquired.
This presentation, given to an audience of Alliance Management professionals in May 2016, addressed the issues that arise when a small biotech or pharma company receives an offer to be acquired or merged into another company, and how Alliance Management at that company can step up and make its mark in the response. How should Alliance Management respond? What information will be required? Conversely, on the side as the larger acquirer, what does Alliance Management need to know and what questions should be asked to reduce risk and extract the expected value from the merger? And as a key take-away, how can Alliance Management play an important role in the post merger integration?
Change Your ABM Game with Top Tips from the ExpertsMarketo
ABM is one of the hottest topics in B2B Marketing. Still, achieving success is no slam dunk. Watch special guest Matt Senatore, Service Director for ABM at SiriusDecisions, and Dave Rigotti, Marketo's Head of ABM, for their webinar, Change Your ABM Game with Top Tips from the Experts, where they dove into the current best practices and practical tips for success, no matter where you are on your account-based marketing journey.
1. The document provides an overview of a webinar from CEB Financial Services on buyer profiles of financial services technology shoppers. It includes roadmaps, frameworks, and profiles of different roles involved in buying decisions like line of business, strategy, customer experience, finance, and IT.
2. The profiles describe the missions, skills, priorities, and development goals of each role to help technology providers understand how to effectively engage with each type of decision maker.
3. The document emphasizes understanding stakeholders' needs, budgets, and priorities in order to present solutions that demonstrate strong ROI and benefits for growth, costs, and regulatory compliance.
How Organizations Can Focus Sales for Maximum ImpactOpenView
The best PLG businesses have a dirty secret: They all have sales teams. In fact, they’re doubling down on these teams.
But that doesn’t mean their unit economics are going to get any less attractive, or that they’ll build their sales team at the same pace that their lead volume increases.
How are the best companies doing this? Focus. We used to want to build a big funnel to give our sales team plenty of leads—but many of the experts Sam Richard spoke with from InVision, Wistia, Hubspot and more told me that they’re “splitting the funnel,” or narrowing it, to keep their teams laser-focused on the leads that make sense for their business.
Sam just finished a project with an OpenView portfolio company that wanted help identifying ways to keep their sales team focused on the best accounts coming through their free tool. During the course of the work, Sam consulted with experts and pretended to be a lead in order to shape some findings that she would now like to share with the community.
We invite you to check out Sam's findings, best practices and suggestions to rethink how you’re applying sales resources at your own organization. We hope this helps provide some guidance, and we’d love to know how your organization does this or what companies you admire who do this well. Reach out on Twitter or LinkedIn.
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10
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Conference Board Webcast, Top Tips for Securing Shareholder Approval of Share Requests
1. Top Tips for Securing Shareholder
Approval of Share Requests
The Conference Board
March 9, 2010
EXEQUITY
Independent Board and
Management Advisors
To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties
without the approval of Exequity LLP and The Altman Group.
2. Introduction
Today’s Topics
■ Top 10 Tips for Securing Shareholder Approval of Share Requests
■ RiskMetrics Group’s 2010 Policy Updates and Compensation FAQs
■ How to Leverage Your Proxy Solicitor to Make You Look Like a Star
Conf Bd Webcast_20100309 1 Exequity
3. Top 10 Tips for
Securing Shareholder Approval of Share Requests
Conf Bd Webcast_20100309 2 Exequity
4. #1: Know Your Shareholders
■ What are ownership levels of your shareholders?
■ How many are retail vs. institutional shareholders?
■ How many of your institutional shareholders are influenced by RiskMetrics Group (RMG) proxy
vote recommendations?
■ How many of your institutional shareholders have their own internal proxy voting guidelines,
i.e., Fidelity, Vanguard Group, State Street, etc.?
■ Which relationships are better than others?
Conf Bd Webcast_20100309 3 Exequity
5. #2: Know What Your Shareholders Want
For those shareholders that have their own proxy voting guidelines, what are they looking for?
■ Voting Power Dilution
Fully-Diluted Dilution
Basic/Simple Dilution
■ Burn Rate
■ Minimum Vesting Restrictions
■ Option Repricing Provisions
■ Stock Option Reload Provisions
■ Evergreen Provisions
Conf Bd Webcast_20100309 4 Exequity
6. #3: Know How Your Company Compares
■ Knowing how your company stacks up on a comparative basis can be quite helpful as you craft the
messaging around your stock plan proposal request
■ Knowing the Market Index (Dilution, Burn Rate, Total Shareholder Returns, etc.) for your
company’s Industry Group will enhance your analysis and serve as a guide
■ Knowing how your company compares will allow you to anticipate sticking points and enable you
to point out key differentiators on some common yardsticks used for comparison
Conf Bd Webcast_20100309 5 Exequity
7. #4: Know if RMG Support Is Needed
■ Are a sufficient number of your shareholders (holding a meaningful number of shares) influenced
by the RMG proxy vote recommendation?
If so, consider finding out what RMG’s vote recommendation will likely be
■ Knowing RMG’s likely vote recommendation is helpful for solicitation efforts, especially if you will
not get a positive vote recommendation from RMG
Conf Bd Webcast_20100309 6 Exequity
8. #4: Know if RMG Support Is Needed
RMG’s 7 Critical Tests
■ Shareholder Value Transfer (SVT)—Is your company’s SVT below your company-specific
allowable cap?
■ Burn Rate—Is your company’s burn rate below your company’s GICS industry group median plus
one standard deviation? If not, will you make a burn rate commitment in a public filing?
■ Pay for Performance—Are your company’s 1- and 3-year Total Shareholder Returns (TSR) better
than its GICS industry group median? If not, did your CEO’s compensation drop more than 10% in
the latest year? If not, what is the relationship between your CEO’s pay and the company’s
performance over the past 5 years?
■ Poor Pay Practices—Are any of the identified poor pay practices in the new/amended plan
document, e.g., liberal definition of change in control, current payments of dividend equivalents on
performance-based awards, excise tax gross-up on a change in control?
■ Liberal Definition of Change in Control—Can a change in control occur without an actual
change-in-control event, i.e., merger, etc.?
■ Repricing—Does your plan prohibit repricing without shareholder approval?
■ Egregious Compensation—Has your company made any compensation decisions that RMG
would say are “egregious”?
Conf Bd Webcast_20100309 7 Exequity
9. #4: Know if RMG Support Is Needed
RMG Support May Not Be Determinative
Equity Plan Proposal Voting Results
2007 2008 2009
952
879 868
830
740 721 705
610 599
260
219 200
16
11 11
Total # Proposals # With Known Voting RMG Against Vote Proposals that Pass Proposals that Fail
Results Recommendations
*Data from ISS’ Voting Analytics for Russell 3000 companies covering proposals to Approve / Amend Omnibus Plan and Approve / Amend
Stock Option Plan
Conf Bd Webcast_20100309 8 Exequity
10. #5: How Do “Other” Proxy Advisory Firm
Recommendations Fit In?
■ You need to figure out how the recommendations from “other” proxy advisory firms (Glass Lewis,
ProxyGovernance, Egan Jones, etc.) fit into things
■ Are any key shareholders influenced by these “other” proxy advisory firms?
■ If so, you need to figure out how they will react to the plan and, if not favorable, be ready to discuss
the plan and reasons why it should be supported with your key shareholders that are influenced by
these other proxy advisory firms
Example: A positive vote recommendation from Glass Lewis can blunt a negative
recommendation from RMG
Conf Bd Webcast_20100309 9 Exequity
11. #6: Comply With the Largest Number of Shareholders’
Guidelines Possible
■ Draft your stock plan proposal so it complies with the largest number of shareholders’ guidelines
possible to give the best chance of the plan securing shareholder approval
■ Figure out the shareholders whose votes you’ll need in order for the proposal to pass
■ Review those shareholder proxy voting guidelines and ensure your plan proposal complies
■ If a needed shareholder has a policy that you can’t or don’t see the need to comply with, consider
discussing this directly with the shareholder to see if anything can be done
Conf Bd Webcast_20100309 10 Exequity
12. #7: Develop a Strategy Plan for Talking to Your
Shareholders
■ Determine who makes the vote decision—the equity side or compliance side
■ Determine the best relationship you have to use in approaching each institution
■ Call upon your proxy solicitor to find out if they know of any developments concerning your key
shareholders that could impact their vote on the stock plan proposal
Conf Bd Webcast_20100309 11 Exequity
13. #8: Craft Your Shareholder Message
■ You need to craft a message to your shareholders as to why they should support the plan
“Because management is proposing it” isn’t enough today
■ Tie back to your understanding of your shareholders
■ Be sure to craft a message that hits your shareholders’ “hot buttons”
■ Look at how you’ve managed burn rate and dilution, and note any downward trends
■ Look at the number of outstanding awards that are “in the money” and have been outstanding for
longer than usual, i.e., 6+ years
Conf Bd Webcast_20100309 12 Exequity
14. #9: Determine if the Retail Vote Is Important
■ First step is to determine if enough shares are held in retail accounts to warrant an extra effort to
get out the retail vote
■ If you determine that getting the retail vote is important, then discuss various strategies that can be
used to increase the retail vote, including:
Calling campaigns
Reminder mailings
Personal letters from CEO/Chairman explaining why their vote is important and will count
Conf Bd Webcast_20100309 13 Exequity
15. #10: Expect the “Unexpected”
“No battle plan ever survives contact with the enemy”
■ That saying is generally applied to wars, but can also be applied to shepherding stock plan
proposals through the shareholder approval process
■ After the proxy is filed, things may change—at your company, with your shareholders, with their
proxy advisory firms, or with the media or others
■ Sometimes the changes work to your benefit, e.g., company results that beat expectations
■ Sometimes the changes work against you, e.g., a proxy advisory firm changing how it interprets its
policies during the proxy season which causes your plan to “fail”
■ So, be ready to respond as things develop and the vote comes in
■ Remember, it isn’t over until the last vote is counted, no matter how certain you or your company is
in the outcome
Conf Bd Webcast_20100309 14 Exequity
17. Changes for Shareholder Value Transfer (SVT) and Burn
Rate Policies
■ Stock price
Will use 200-day average stock price for shareholder meetings on or after February 1, 2010
During 2009, used 90-day average stock price
■ Volatility
Will use 200-day volatility for shareholder meetings on or after February 1, 2010
During 2009, used 400-day volatility
■ Updated GICS industry group burn rate table for 2010
Conf Bd Webcast_20100309 16 Exequity
18. Implications of Changes for SVT and Burn Rate Policies
■ Impact is inversely related to a company’s market cap
■ The larger the relative market cap, the more positive the impact likely will be
■ Across the board, burn rate caps dropped, some by more than half of what they were in 2009
■ We looked at 40 random companies—10 each from large, mid, small, and micro cap groups
Large caps: Exxon Mobil, Microsoft, Procter & Gamble, Apple, Johnson & Johnson,
International Business Machines, JPMorgan Chase, Chevron, AT&T, General Electric
Mid caps: TJX Companies, Avon Products, Precision Castparts, Lorillard, H.J. Heinz,
Sempra Energy, T. Rowe Price Group, Spectra Energy, Marsh & McLennan, Murphy Oil
Small caps: Human Genome Sciences, Tupperware Brands, Solera Holdings,
Bally Technologies, E*Trade Financial, MFA Financial, J. Crew Group, 3COM,
Highwoods Properties, Revlon
Micro caps: Schweitzer-Mauduit International, Veeco Instruments, First Financial Bancorp,
Vivus, ArvinMeritor, Dana Holding, Prospect Capital, U.S. Airways, Radian Group,
Georgia Gulf
Large cap company stock option valuations drop by about 16% under policy
changes (measured as a percent of stock price), compared to only about a 3% drop
for micro caps
Conf Bd Webcast_20100309 17 Exequity
19. Volatility Under the 2010 Methodology Compared to 2009
Methodology
Overall 2009 Methodology 2010 Methodology Diff. (+/-) Diff. (%)
Lowest 26.86% 18.29% -102.68% -47.48%
Average 81.73% 70.12% -11.61% -20.36%
Median 63.79% 51.91% -12.31% -24.09%
Highest 216.25% 255.13% 50.87% 28.37%
Large Cap
Lowest 26.86% 18.29% -20.69% -43.42%
Average 47.06% 33.59% -13.47% -30.09%
Median 45.42% 26.46% -13.38% -30.99%
Highest 89.74% 73.46% -6.27% -12.73%
Mid Cap
Lowest 29.81% 19.26% -21.16% -39.89%
Average 49.24% 34.41% -14.83% -31.06%
Median 46.17% 31.75% -14.13% -31.48%
Highest 76.12% 60.97% -10.55% -19.91%
Small Cap
Lowest 54.12% 34.04% -102.68% -47.48%
Average 103.41% 90.09% -13.32% -14.87%
Median 76.81% 64.61% -10.08% -14.94%
Highest 216.25% 230.19% 50.87% 28.37%
Micro Cap
Lowest 65.09% 58.28% -40.97% -28.81%
Average 127.22% 122.39% -4.83% -5.42%
Median 118.32% 104.11% -1.58% -2.22%
Highest 214.58% 255.13% 40.55% 18.90%
Conf Bd Webcast_20100309 18 Exequity
21. RMG Burn Rate Maximums by GICS—2009 vs. 2010
Burn Rate Maximums
8.00%
7.00%
6.00%
Maximum Burn Rate
5.00%
4.00%
3.00%
2009
2.00% 2010
1.00%
0.00%
GICS Group
Conf Bd Webcast_20100309 20 Exequity
22. Executive Pay Evaluation Policy
■ Consolidates 3 existing policies:
Pay-for-Performance
Problematic (Poor) Pay Practices
Board Responsiveness and Communication on Compensation Issues
■ RMG will re-order its Voting Manual into 4 policy sections:
Executive Pay Evaluations
Equity-Based and Other Incentive Plans
Director Compensation
Shareholder Proposals
Conf Bd Webcast_20100309 21 Exequity
23. Pay-for-Performance Policy Changes
■ RMG will consider the alignment of CEO total direct compensation (TDC) and TSR for a longer
period of at least 5 years
■ Policy used for determining RMG vote recommendations on:
Management Say on Pay (MSOP) proposals
Elections of directors
Equity plan proposals
■ The policy’s screening questions:
Are a company’s 1- and 3-year TSRs both below the company’s 4-digit GICS industry group
medians?
Has the CEO served at least 2 consecutive fiscal years at the time of the annual meeting at
which the proposal will be voted on?
If “yes” to both of the above questions, RMG will:
► Analyze whether the CEO’s TDC is aligned with TSR, both recent and long-term (at least
5 years) [most recent year-over-year increase/decrease in pay remains a key
consideration]
► Review a company’s CD&A to better understand the pay elements and whether they create
or reinforce shareholder alignment
► Consider the mix of performance-based compensation relative to TDC
Conf Bd Webcast_20100309 22 Exequity
24. Problematic Pay Practices
■ Formerly referred to as “poor” pay practices
■ Now, two groups:
“Major”—can lead to negative vote recommendations if one exists
“Minor”—can lead to negative vote recommendations if more than one exists
■ 2010 Policy Updates set out the “Major” Problematic Pay Practices
■ 2010 Compensation FAQs set out the “Minor” Problematic Pay Practices
■ RMG addressed some activity in relation to underwater stock options for the first time:
Voluntary surrenders of underwater stock options by executive officers
Cash buyouts of underwater stock options without shareholder approval
■ RMG will utilize MSOP proposals as the initial vehicle to address problematic pay practices. RMG
may recommend votes:
Against MSOP proposals
Against/Withhold from compensation committee members or, in rare cases where full board is
deemed responsible for the practice, all directors, or when no MSOP item is on the ballot, or
when the board has failed to respond to concerns raised in prior MSOP evaluations
Against an equity-based incentive plan proposal if excessive non-performance-based equity
awards are the major contributor to a pay-for-performance misalignment
Conf Bd Webcast_20100309 23 Exequity
25. Problematic Pay Practices
“Major” “Minor”
■ Multi-year guarantees for salary increases, non-performance- ■ Excessive severance and/or change-in-control provisions
based bonuses, and equity compensation ■ Payments upon an executive’s termination in connection with
■ Including additional years of service that result in significant performance failure
additional benefits, without sufficient justification, or including ■ Liberal change-in-control definition in individual contracts or
long-term equity awards in the pension calculation equity plans which could result in payments to executives
■ Perquisites for former and/or retired executives, and without an actual change in control occurring
extraordinary relocation benefits (including home buyouts) for ■ Overly generous perquisites, which may include, but are not
current executives limited to, the following:
■ Change-in-control payments exceeding 3 x times base salary Personal use of corporate aircraft
and target bonus
Personal security systems maintenance and/or
■ Change-in-control payments without job loss or substantial installation
diminution of duties (“single triggers”)
Car allowances
■ New or materially amended agreements that provide for
“modified single triggers” Executive life insurance
■ New or materially amended agreements that provide for an ■ Internal pay disparity-excessive differential between CEO total
excise tax gross-up (including “modified gross-ups”) pay and that of next highest-paid named executive officer
■ Tax reimbursements related to executive perquisites or other ■ Voluntary surrender of underwater stock options by executive
payments such as personal use of corporate aircraft, officers
executive life insurance, bonus, etc. ■ May be viewed as an indirect repricing/exchange program
■ Dividends or dividend equivalents paid on unvested especially if those cancelled options are returned to the equity
performance shares or units plan, as they can be regranted to executive officers at a lower
exercise price, and/or executives subsequently receive
■ Executives using company stock in hedging activities, such as unscheduled grants in the future
“cashless” collars, forward sales, equity swaps, or other
similar arrangements ■ Other pay practices deemed problematic but not covered in
any of the above categories
■ Repricing or replacing of underwater stock options/stock
appreciation rights without prior shareholder approval
(including cash buyouts and voluntary surrender/subsequent
regrant of underwater options)
Conf Bd Webcast_20100309 24 Exequity
26. 2010 Compensation FAQs—Executive Compensation
Evaluation
■ Not a new policy
■ Will first resort to recommending against MSOP proposals unless egregious practices are
identified or a company previously received a negative recommendation on an MSOP resolution
related to an issue that is still ongoing
■ Will evaluate problematic pay practices on a case-by-case basis
■ If the initial screening questions under the pay-for-performance analysis require further analysis,
RMG will consider:
Whether the CEO’s pay increased or decreased, and the magnitude of the change
The reason for the change in pay with respect to the pay mix
The long-term alignment of the CEO’s TDC with the company’s TSR with particular focus on
the most recent 3 years
■ Increases in CEOs’ TDCs resulting from a change in pension plan assumption generally will not
result in an unfavorable vote recommendation
■ Companies can make a prospective pay-for-performance commitment, tailored to the specific
issues raised in RMG's analysis, and RMG will evaluate such commitments on a case-by-case
basis to determine if an exception to the application of the negative vote recommendations will be
made
Conf Bd Webcast_20100309 25 Exequity
27. 2010 Compensation FAQs—Stock Option Carve-Out
Exception
■ The Stock Option Carve-Out Exception permits a company to have RMG exclude stock options
that have been outstanding for more than 6 years and are in-the-money from the SVT analysis.
This was as the policy was understood last year. This policy was introduced as part of the 2009
Policy Updates.
■ RMG has thrown several roadblocks up for companies desiring to use this exception, including:
Companies must have sustained positive stock price performance
► Generally means 5-year positive TSR, as well as positive year-over-year performance for
the past 5 fiscal years
► RMG permits negative TSR for first 2 years, so long as final 3 years’ TSRs are strongly
positive; but, vested stock options that were underwater during a substantial portion of the
5-year period are not eligible for the carve-out
Companies must have high overhang cost attributable to such in-the-money stock options
► Means that outstanding stock options and stock awards should be in the range of
75% to 100% of total overhang
Concentration ratio should not be greater than 50%
► Concentration ratio is the total number of equity grants to the top 5 executives divided by
total equity grants to all employees and directors
Conf Bd Webcast_20100309 26 Exequity
28. 2010 Compensation FAQs
Option Repricing
■ Only deeply underwater stock options should be eligible for exchange or other action
Rule of thumb: threshold exercise price should be the higher of the 52-week high or 50% above
the current stock price
Burn Rate Commitment
■ If a company fails the RMG Burn Rate Policy, it can commit in a public filing on a prospective basis
to maintain a gross 3-year average burn rate equal to the higher of 2% of the company’s common
shares outstanding (CSO) or the mean of its GICS peer group
Note: We were informed that the FAQs contain a typo and companies can continue to commit
to the higher of 2% of CSO or the mean plus one standard deviation of its GICS peer group
Since the 2010 Compensation FAQs were issued, RMG Research has permitted companies to
utilize several other burn rate commitments for 2010, including:
► Committing to the average between the 2009 and the 2010 RiskMetrics burn rate caps
► Committing to the average between the 2010 and the 2011 RiskMetrics burn rate caps
► Committing to the 2010 cap for one year, the 2011 cap for one year, and the 2012 cap for
the last year
Conf Bd Webcast_20100309 27 Exequity
29. 2010 Compensation FAQs
Pay-for-Performance Timing of Equity Grants
■ Companies that grant equity awards at the beginning of the fiscal year based on an analysis of the
company’s or individual’s performance during the prior fiscal year may have an issue under RMG's
pay-for-performance analysis unless they provide sufficient information to enable RMG to
sufficiently understand and incorporate such grants into its analysis
Should provide all necessary information in the proxy
Compensation Risk Disclosure
■ RMG does not have a policy regarding nondisclosure of compensation risk; but, it advises
companies, at a minimum, to talk about their process for compensation risk assessment and any
mitigating factors (such as clawbacks and bonus banks) that exist
■ RMG views this disclosure as “an opportunity for communication, not simply compliance” and it
expects that “shareholders will be looking for a reasonably substantive discussion of the board’s
process to determine whether the company’s incentive pay programs might motivate inappropriate
risk taking, and what they are doing to mitigate that”
Compensation Consultant Conflicts
■ RMG indicated that it will analyze the information concerning compensation consultant fee
disclosures and will develop any new policies regarding its findings in conjunction with its clients
Directors Enhanced Disclosures
■ RMG will analyze the data collected under the new director disclosures and would not implement
any new policy in regard to these disclosures that would apply for the 2010 proxy season
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30. How to Leverage Your Proxy Solicitor to
Make You Look Like a Star
Conf Bd Webcast_20100309 29 Exequity
31. Leverage Your Proxy Solicitor
■ A proxy solicitor should be considered an advisor
■ A solicitor should be brought in early in the process
■ #1: KNOW YOUR SHAREHOLDERS
Institutional influence analysis
Vote projections
Review and analysis of plan
Vulnerability of directors
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32. Know Your Shareholders
■ Not always an easy task
■ Insiders and directors
■ Retail shareholders (Mom and Pop)
Not concerned with dilution, burn rate, SVT, etc.
Typically supportive of management, biggest issue is getting them to vote
■ Institutional shareholders
How are they influenced? RMG, Glass Lewis, custom guidelines
Who makes the vote decision? Compliance, equity side, or hybrid
How “open” are they?
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34. Review and Analysis of the Plan
■ A proxy solicitor can run the RMG Issue Compass model (if necessary)
■ As the plan takes shape, a solicitor should analyze the data to determine how institutions like
Fidelity, Vanguard, and State Street are likely to view the plan
■ In the current shareholder-driven governance environment, a solicitor should help craft the plan to
ensure it receives the highest shareholder support possible
■ Realize there is no “perfect world” in institutional voting patterns
Some institutional shareholders have no defined policy guidelines
Some institutional shareholders do not like to communicate with issuers
Look at peer company plans and historical voting patterns
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35. Peer Company Comparisons (Data and Voting)
(GICS 4030 – Insurance) My Company Liverpool Inc. Arsenal Corp. Everton FC, Inc.
Year 2010 2010 2009 2009
Total Shares O/S 100,000,000 120,000,000 80,000,000 150,000,000
Total Shares Under Plans 10,000,000 35,0000,000 5,000,000 12,000,000
RMG SVT Cost/Cap 5.00%/5.00% 7.00%/5.00% 4.00%/5.00% 5.00%/5.00%
RMG Recommendation FOR AGAINST FOR FOR
Voting Power Dilution 9.09% 22.58% 5.88% 7.41%
3-Year Average Burn Rate 1.85% 4.05% 0.76% 1.75%
Fidelity Vote AGAINST AGAINST AGAINST FOR
Vanguard Vote FOR AGAINST FOR FOR
State Street Vote FOR AGAINST FOR FOR
Conf Bd Webcast_20100309 34 Exequity
36. Sample Vote Projection
Sample Vote Projection Analysis Projection
Shares Advisory Firm % of O/S % of O/S % of O/S
Shareholder Segment %
6/30/09 Influence Voting For Against
INDIVIDUAL INVESTORS
Officers & Directors 3,500,000 3.5% 3.50% 3.50%
Individual (Registered) * 2,500,000 2.5% 1.25% 1.00% 0.25%
Individual (Brokerage) * 27,000,000 27.0% 12.83% 10.26% 2.57%
TOP INSTITUTIONAL INVESTORS
Vanguard Group 11,898,149 11.9% Internal 10.47% 10.47%
Fidelity Management & Research Co. 11,500,012 11.5% Internal 10.12% 10.12%
Barclays Global Investors 6,046,667 6.0% Internal 5.32% 5.32%
Franklin Resources, Inc. 5,099,897 5.1% GL 4.49% 4.49%
Dimensional Fund Advisors 4,741,982 4.7% RMG 4.17% 4.17%
State Street Global Advisors (US) 3,963,293 4.0% Internal 3.49% 3.49%
OTHER INSTITUTIONS 23,750,000 23.8% 20.19% 9.08% 11.10%
Subtotal: 100,000,000 100.0% 75.82% 39.64% 36.19%
Total Shares Outstanding: 100,000,000
Footnotes:
* Incorporates a direct solicitation campaign to individual holders through calling campaigns & reminder mailings
Based on the assumption that advisory firms RiskMetrics Group (RMG) and Glass Lewis (GL) will recommend Against.
Conf Bd Webcast_20100309 35 Exequity
37. Vulnerability of Directors
■ Increased scrutiny of directors
Majority voting
Loss of the broker vote
Activism
■ Compensation committee members are particularly in the spotlight
RMG and Glass Lewis pay-for-performance models
RMG’s problematic/poor pay practices
■ Companies and their advisors should review corporate governance and compensation practices
Conf Bd Webcast_20100309 36 Exequity
40. Conclusion
■ Taking a stock plan proposal to shareholders for approval is not an easy process
■ It takes hard work, planning, and diligence in its execution
■ But, if you have a plan, work it, and are ready to react when changes arise, you will probably come
through the process successfully
■ Good luck with your stock plan proposals!
Questions?
Conf Bd Webcast_20100309 39 Exequity
41. Speakers’ Contact Information
Ed Hauder, Exequity LLP
edward.hauder@exqty.com (847) 996-3990
Ed’s Equity Compensation Plan Blog: www.edwardhauder.com
Exequity’s Web site: www.exqty.com
Reid Pearson, The Altman Group
rpearson@altmangroup.com (678) 919-7189
The Altman Group’s Web site: www.altmangroup.com
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42. Appendix: Bonus Tips for
Securing Shareholder Approval of Share Requests
Conf Bd Webcast_20100309 41 Exequity
43. Bonus Tip #1: Know How Your Current Equity Plans and
Compensation Decisions Fare
■ Understand your shareholders’ proxy voting guidelines
■ Some actions can cause you to lose the ability to get institutional shareholders to support a stock
plan proposal
Example: Including language that permits the repricing of stock options and/or other awards
without shareholder approval
■ Other actions you can address by committing to take specified future actions and the institutional
shareholders will then support your proposal
Example: For RMG, having a burn rate that exceeds the RMG maximum, but committing to
maintain your burn rate at the industry median plus one standard deviation for the next 3 years
Conf Bd Webcast_20100309 42 Exequity
44. Bonus Tip #2: Discussions With a Few Select Large
Shareholders
■ Discuss policy not soliciting votes—just getting feedback
■ Before you even start drafting a plan, take some time to talk with a few of your key shareholders
■ You want to find out:
What they currently think about your company
What their policies are towards stock plan proposals, and if those are likely to change before
the next proxy season
What new concerns they have about stock plans and their use
Conf Bd Webcast_20100309 43 Exequity
45. Bonus Tip #3: Make Sure Your Proposal Is Reasonable
■ In the terms included in the plan, the dilution from proposed shares, etc.
■ Remember the old saying:
“Pigs get fat, but hogs get slaughtered”
■ What is “reasonable” is, much like beauty, in the eyes of the beholder
■ So, know what your shareholders think is reasonable in regards to stock plan terms and provisions
and try to stick within those boundaries
■ Of course, if you have a good, strategic reason to go outside the bounds of what your shareholders
consider reasonable, realize that you will most likely need to ensure shareholders fully understand
why this is necessary
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46. Bonus Tip #4: If You Seek RMG’s Support, Make Sure the
Proxy Lays Everything Out
■ If you seek RMG’s support and ran its model, make sure that the proxy proposal lays out all the
information on a silver platter that RMG needs to complete its analysis (and that it matches what
you used in your modeling)
■ By ensuring the proxy proposal sets forth all the information RMG needs for its analysis in a way
that is easy for RMG analysts to gather the information, the more likely that the RMG vote
recommendation will match your estimate
■ Double-checking the numbers used in your RMG modeling against the proxy is a good way to
confirm your RMG modeling is still valid and will likely be replicated by RMG analysts
Conf Bd Webcast_20100309 45 Exequity
47. Bonus Tip #5: Make Sure You Have Everyone You Need
on the Plan Team
Internal Team External Team
■ HR ■ Outside Counsel
■ legal ■ Compensation Consultant
■ Finance ■ Proxy Solicitor
■ Investor Relations
■ Corporate Secretary
■ Stock Plan Administrator
■ Senior Executives
■ Compensation Committee
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48. Bonus Tip #6: Realize That Once Your Proxy Is Filed,
You’ll Still Have a Lot to Do
■ The natural reaction is to relax once the proxy is filed, but don’t do that
■ You will have to monitor what proxy advisory firms recommend regarding the plan
■ You may need to schedule conversations with key shareholders to discuss the plan proposal with
them and solicit their support
■ You will need to be ready to respond to any unforeseen developments, e.g., a change in
institutional shareholders’ policies that would cause them to vote against the plan
Conf Bd Webcast_20100309 47 Exequity
49. Bonus Tip #7: It’s Not Over Until All the Votes Are Counted
■ Just because you assume a shareholder will not support your plan proposal doesn’t mean you
shouldn’t reach out and engage them about it
■ Never assume that a shareholder will vote in favor of your plan without discussing the particular
proposal with them first
■ Even if a shareholder votes against your plan proposal, you still might be able to get them to
change their mind and their vote!
■ If a shareholder votes for your plan proposal, realize that they can change their vote until voting is
closed
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