James McRitchie reports that:
Towers Watson launched an online survey tool to help companies better understand their shareholders’ views and perceptions on their executive compensation programs.
Dodd-Frank requires publicly traded companies to conduct periodic shareholder votes on their executive pay programs, including how often to conduct say-on-pay votes. In preparation for the say-on-pay era, many companies are trying to engage their key shareholders in a dialogue about executive compensation and related issues. According to Eric Larré, a Towers Watson consulting director who spearheaded the survey’s development:
For most U.S. companies, giving shareholders a say on pay will be a new experience when the 2011 proxy season arrives. And most companies are still trying to determine how to address the shareholder engagement process. This survey offers shareholders an easy way to express specific views that Congress and the SEC determined they were entitled to communicate via the proxy process.
The Towers Watson online survey tool allows shareholders to complete a questionnaire and provide their views on a wide range of executive compensation programs and issues including pay philosophy, performance measurement, pay levels, governance and shareholder preferences regarding the frequency of future say-on-pay votes. The questionnaire consists of both multiple-choice and open-ended questions. Companies receive a detailed report summarizing shareholders’ responses, including an analysis of differing views of shareholders and what percentage of all company shareholders the respondents represent.
Obviously, on line surveys are hopelessly unscientific and replete with problems of all sorts. Even so,one can imagine companies using this to (a) take a pre-check of shareholder sentiment before the say on pay vote and (b) to have data on what shareholders want when activists come calling. Suppose a union pension fund comes to management and says we don't X, Y, and Z about your compensation policies, so we're going to vote no. Management may be able to point to support for retain investors to justify the union demands.
