Majority voting and auditor independence will continue as focal issues for the Carpenter Funds in the 2016 proxy season, with the Funds resuming shareholder proposal submissions on the majority vote standard issue. Additionally, we have communicated with an additional 74 S&P 500 Index companies requesting enhanced auditor independence disclosure in the companies’ proxy statements. The auditor independence issue is being advanced through non-shareholder proposal engagements. The Funds’ Executive Compensation Core Principles & Practices document used to guide the analysis of the executive compensation plans at the corporations in the Funds’ investment portfolios has been further updated. The compensation plan analysis assists in the Funds’ Say-on-Pay voting and guides our engagements with companies on the executive pay issue. A focus of our executive compensation engagements is on disclosure deficiencies regarding the executive compensation plan’s connection to a company’s long-term strategic business plan.
The 2016 proxy season is the thirteenth proxy season in which Carpenter Funds have advocated for the adoption of the majority vote standard. Since 2004, Carpenter Funds have submitted 552 majority vote shareholder proposals to US corporations, with the focus on large cap companies. The 2016 Majority Vote Proposal Target List includes a number of S&P 500 companies, such as FirstEnergy Corporation and PulteGroup, Inc. that have received a majority vote proposal in previous proxy seasons. To date, 451 or 90.4% of the S&P 500 Index companies have adopted a majority vote standard. Over 40% of the companies in the Russell 3000 Index have adopted a majority vote standard in director elections.
The Carpenter’s pending rulemaking request to the SEC seeking a Rule 14a-4(b) (2) reform to eliminate the “withhold” vote option in director elections was supplemented with a letter to the Director Keith Higgins of the Division of Corporation Finance. The communication highlighted the continued inaccurate and misleading proxy statement and proxy card disclosure associated with the withhold vote by many companies that retain a plurality vote standard.
The Funds revised their Executive Compensation Core Principles and Practices document that guides the review of the executive pay plans in the Funds’ investment portfolios. The Core Principles and Practices include four overarching executive compensation principles that outline sound compensation policies along with twenty-five pay practices essential to sound plan design.
While the Core Principles and Practices present compensation principles and practices that should be reflected in executive pay plans, the guidelines encourage distinctive plan design. The Exec Comp Core Principles and Practices Form is used to support the Funds’ proxy voting and identify corporate engagement opportunities on executive compensation issues.
Building on last proxy season’s success in securing corporate commitments to expand auditor independence disclosure, the Funds have sent an Auditor Independence Disclosure Letter to 74 large-cap companies in advance of the 2016 proxy season.
Building on last proxy season’s success in securing corporate commitments to expand auditor independence disclosure, the Funds have sent an Auditor Independence Disclosure Letter to 74 large-cap companies in advance of the 2016 proxy season.
PRIVACY POLICY | ©0 - 2024 United Brotherhood of Carpenters and Joiners of America
Website Created by MOSAIC
