Issue link: https://digital.shearman.com/i/1019978
Shearman & Sterling LLP 98 | Compensation-Related Shareholder Proposals TYPES OF COMPENSATION-RELATED SHAREHOLDER PROPOSALS Pay Disparity and Diversity Reports Request that the company prepare and disclose reports on gender diversity and the gender pay gap in its workforce. One proposal requested a report comparing the compensation of senior executives to the lowest paid employees. Limitations on Change in Control Equity Vesting Request that the company adopt a policy that would prohibit accelerated vesting of equity awards upon a termination or change in control, allowing pro rata vesting for time served. Government Service Golden Parachutes Request that the company prepare a report to shareholders regarding the vesting of equity-based awards for senior executives due to voluntary resignation to enter governmental service. This proposal was aimed only at financial services companies. Clawback Policies Request that the company adopt a policy requiring annual disclosure of any recoupment or forfeiture of executive officer compensation and the circumstances resulting in the recoupment or forfeiture. Certain proposals also request disclosure of the decision not to pursue recoupment. Three of these proposals also request the adoption of an enhanced policy that would permit recoupment if there has been misconduct resulting in a violation of law or company policy that causes significant financial or reputational harm to the company and a senior executive either committed the misconduct or failed in his or her responsibility to manage or monitor conduct or risks. Other There are various other compensation- related shareholder proposals, including reports on the impact of incentive compensation on drug pricing and requiring additional steps to ensure compensation committee independence. Incentive Compensation Includes: (1) deducting the impact of stock buy-backs from incentive compensation, (2) requiring shareholder approval of payments to the named executive officers, (3) requiring an annual report on sustainability metrics on incentive compensation and (4) requiring the elimination of the use of non-GAAP certain performance metrics.