ExxonMobil had a fairly innovative idea for its say on pay frequency proposal. Its proxy statement provided “Consistent with the Board’s commitment to excellence in governance and responsiveness to shareholders, the Board will, however, follow the frequency that receives the plurality of votes cast by shareholders on this non-binding resolution. Furthermore, if the plurality of votes cast by shareholders is for triennial frequency, the Board will commit to hold the next frequency vote in three years, rather than the statutory requirement to hold this vote at least every six years.”
We wondered how the idea would fare and watched the progress of the proxy statement. ExxonMobil soon encountered headwinds in the form of a negative recommendation from ISS on say-on-pay, opposition to its say-on-pay vote by activist investors such as ASFCME and RAM Trust, and negative comments from ISS’s blog to boot, with posts mysteriously appearing and disappearing.
ExxonMobil ultimately received majority support on its say-on-pay proposal. However the other headwinds seem to have prevented it from garnering plurality support for its three year frequency proposal, as the annual option received 54.5% of the votes cast and the triennial option received 42.7% of the votes cast.
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