With 2008 just about in the books, analysts at RiskMetrics have cast their gaze towards the new year and the upcoming proxy season. A new report identifies a series of major trends that the governance agency predicts will emerge as the key ballot issues in upcoming proxy votes, including executive compensation, governance practices, and stock options plans.
The report, “The 2009 Proxy Season: RiskMetrics Group’s Voting Policy Updates and an Examination of Upcoming Trends,” identifies five major categories of issues that will shape the upcoming proxy season. These include: shareholder focus on smaller companies; increased shareholder opposition to various corporate governance practices, including the right to call special meetings; stock options; TARP response; and responding to the change in SEC leadership.
In addition to identifying potential trends in the proxy environment, RiskMetrics has issued a number of amendments to its voting recommendations policy.
Among the amendments:
- Will now consider on a case-by-base basis the reasoning behind a director’s absenteeism. RiskMetrics formerly would recommend a “withhold” vote in the case of board attendance of less than 75 percent.
- Auditors’ opinion on a company’s financial statements will now factor into RiskMetrics’s approval/disapproval.
- Companies are required to explain their rationale for a poison pill.
- A variety of additions to its definition of “poor pay practices.”