Issue link: https://digital.shearman.com/i/1468251
30 Common Compensation-Related Shareholder Proposals • Limitation on Severance Amounts: Requests that the board seek shareholder approval of future severance agreements with senior executives that provide for benefits exceeding 2.99 times the sum of the executives' base salary plus bonus. • Expensing Stock Options: Requests that the board establish a policy of expensing the value of all stock options issued by the company in accordance with FAS 123. • Prohibition of Executive Option Grants: Requests that the board adopt a policy prohibiting future stock option grants to executives. • Executive Compensation: Various proposals requesting, among other things: (i) the establishment of a cap on total CEO compensation; (ii) shareholder approval of executive compensation plans; and (iii) requiring executive compensation reviews and disclosure of the results to shareholders. • Pay Disparity: Requests that the board either (i) prepare and make available to shareholders a report compiling total compensation for the company's top executives and its lowest paid workers; or (ii) establish a cap on the total compensation paid to the CEO in a given year equal to 50 times the average compensation paid to employees who are not exempt from coverage under the FLSA in the prior year. • Indexing Stock Options: Requests that the board adopt a policy requiring a significant portion of future stock option grants to senior executives to be performance-based (i.e., indexed or linked to a peer group performance index). • Voluntary Reduction in CEO Compensation: Requests that the board meet with the CEO to review ways in which the CEO can voluntarily reduce his compensation to more reasonable and justifiable levels. • Director Compensation: Requests that (i) director compensation be limited to $200,000 annually; (ii) shareholder approval to be obtained to increase director compensation; and (iii) equity compensation to directors be expressed as a dollar value instead of as a specific number of shares. The following compensation-related matters were most frequently proposed by shareholders of the Fortune 100 companies in their 2003 proxy statements: