Through February 4, 2011, 30 issuers have reported voting results for non-TARP say-on-pay matters. Of these, 20 boards recommended a triennial frequency and three recommended a biennial frequency.

Frequency Vote

Biennial

Of the three boards recommending a biennial frequency, only one issuer, Hormel, received shareholder support. As a Minnesota-based law firm we have the greatest respect for Hormel, but this vote is of little predictive value as approximately 51% of the shares are owned by Hormel Foundation or insiders. Of the remaining two issuers, perhaps Rochester Medical had a decent chance of having a biennial frequency approved with only 40% institutional ownership and 19% being controlled by insiders or others. However, broker non-votes of 46% prevented that from occurring.

Triennial

To date six issuers with a market of over $10 billion had boards that recommended a triennial frequency. None have succeeded in obtaining shareholder support.

To date four issuers with a market cap of over $1 billion to $10 billion had boards that recommended a triennial frequency. Only one, Sally Beauty, with 51% institutional ownership and 5% broker non-votes, has succeeded in obtaining shareholder support.

To date two issuers with a market cap of over $200 million to $1 billion had boards that recommended a triennial frequency. Only one, Laclede, with institutional ownership of 45% and broker non-votes of 19% succeeded in obtaining shareholder support.

To date eight issuers with a market cap of $200 million or less had boards that recommended a triennial frequency. Each issuer has received shareholder support for a triennial frequency. It is still difficult to predict success in this area because either many issuers have significant insider or other controlling parties of more than 15% or market caps of less than $20 million.

No Votes on Say-on-Pay

A total of 13 issuers with a market cap of over $1 billion have reported say-on-pay results. Of these, only seven issuers, or 54%, received votes against executive compensation of approximately 5% or less. Here we eliminated Hormel because of a controlling shareholder. No votes are calculated by dividing the votes against executive compensation by the total of votes for and against executive compensation and abstentions.

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