Forbes contributor Robin
Ferracone recently spent time talking with Glass Lewis Chief Policy Officer Robert McCormick. The wide ranging discussion covered several topics, including the recent proxy season, perceptions of proxy advisors, positive and negative trends in governance practices at companies, and how Glass Lewis approaches its analysis.
During the conversation Bob McCormick explained some of the things he feels companies should focus on when thinking about corporate governance.
“In terms of what companies are doing wrong: First, underestimating the knowledge and sophistication of institutional investors… Second, misinterpreting the shareholder engagement process… Third, paying big bonuses on operating metrics when shareholders have lost money. In terms of what companies are doing right: First, constructive engagement with shareholders… Second, better disclosure… Third, building better mutual understanding between investors and issuers.”
Robin Ferracone commented on the importance of disclosure when it comes to pay for performance.
“There are some big takeaways from our discussion. Contrary to popular belief, proxy advisors and investors are supportive of customized approaches to compensation – they are not necessarily tethered to one size fits all, nor are they wedded to the use of TSR. However, as issuers customize measures and program design to the demands of the industry and the company’s business strategy, the burden also is on the company to clearly communicate the rationale through transparent disclosures and active engagement, and also to ensure that pay and performance are aligned.”
Read the full discussion here.
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Ferracone recently spent time talking with Glass Lewis Chief Policy Officer Robert McCormick. The wide ranging discussion covered several topics, including the recent proxy season, perceptions of proxy advisors, positive and negative trends in governance practices at companies, and how Glass Lewis approaches its analysis.
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