Improving stock prices and further distance from the scandals which begat Dodd-Frank made for a relatively calm proxy season in 2012, and a continued expectation of calm in 2013, though there remains significant concern about economic and regulatory expectations given the results of the U.S. national election, which was held during the time this year's survey was being conducted.
Nearly four in 10 companies represented by the directors responding to our survey reported stock price growth of more than 5% in the past year. The number of directors reporting that their proposed slate of directors was not re-elected in its entirety dropped from 11% in 2011 to 3% in 2012. Company-offered proxy proposals that didn't pass also dropped from a little over 11% to 5%.
The number of respondents reporting the election of a director(s) or adoption of a shareholder proposal not recommended by the company for approval declined from 11.5% to 3%. And for the more than half of respondents whose companies held a say on pay vote last year, none were rejected.
That's not to say that directors are resting on the say on pay issue. “We continue to monitor pay for performance alignment,” noted one director. “We want to assure best practices in corporate governance.” Another respondent said, “We continue to review the design of our compensation programs to ensure they're in alignment with our shareholder interests.”
Many directors emphasized their boards' continuing commitment to more proactive shareholder outreach on pay issues. “We have regular meetings with shareholder representatives to discuss the matter and other areas of concern for shareholders,” said a respondent.
For 2013, there is substantial concern among respondents about the effects of the U.S. election, with many voicing a concern about a global recession, additional regulatory and tax burdens, and the potential impact of the ‘fiscal cliff' facing the executive and legislative branches. Even so, more than a third of respondents predicted U.S. GDP growth north of 2%, with only 7% predicting a flat or negative GDP. And, notwithstanding post-election wobbles in the markets, more than 53% of respondents expected their share prices to grow by more than 5% in the year ahead.
But as Casey Stengel is reputed to have said, “Never make predictions, especially about the future.”
Complete results are listed below: