Form 8-K Disclosures on Frequency of Say-on-Pay Votes
Item 5.07 to Form 8-K was revised in connection with the adoption of the final say-on-pay rules. Issuers must now amend their Form 8-Ks that disclose voting results to “disclose the company’s decision in light of such vote as to how frequently the company will include a shareholder vote on the compensation of executives in its proxy materials until the next required vote on the frequency of shareholder votes on the compensation of executives.” The amendment must be made “no later than one hundred fifty calendar days after the end of the annual or other meeting of shareholders at which shareholders voted on the frequency of shareholder votes on the compensation of executives as required by section 14A(a)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78n-1), but in no event later than sixty calendar days prior to the deadline for submission of shareholder proposals under §240.14a-8.”
Although issuers are not required to disclose their decision on how often the advisory vote on compensation will be held for a period of time, some issuers are including the disclosure in the initial reports filed with respect to the results of the vote. Obviously that cuts off the need to file an amendment, but only works where a quick decision can be made.
For instance, one issuer stated “In accordance with the voting results for this item, the Company’s Board of Directors determined that an advisory vote to approve the compensation of the named executive officers of the Company will be conducted every two years, until the next stockholder advisory vote on the frequency of the advisory vote to approve the compensation of the named executive officers of the Company.”
Another issuer stated “In accordance with the results of this vote, the Board of Directors determined to implement an annual advisory vote on executive compensation, commencing with the company’s 2012 annual meeting of shareholders.”
We like the relative precision of Irish company, Accenture PLC’s disclosure: “In light of the voting results with respect to the frequency of shareholder votes on executive compensation, Accenture’s Board of Directors has decided that Accenture will hold an annual advisory vote on the compensation of named executive officers until the next required vote on the frequency of shareholder votes on the compensation of executives. Accenture is required to hold votes on frequency every six years.”
While not required to do so, other issuers are stating they will consider the results in the future. An example is “The Compensation Committee of the Board of Directors expects to review and consider the results of these two non-binding advisory votes in conducting the affairs of the Compensation Committee over the coming year.”
Another more precise example from Zoll Medical is “The Board will evaluate the results of such non-binding advisory vote regarding the frequency of future non-binding, advisory votes on executive compensation at a future meeting and make a determination as to whether the Company will submit future non-binding advisory votes on executive compensation for consideration by shareholders every one, two or three years. The Company will amend this Current Report on Form 8-K to provide information regarding such determination.”
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