Labrador's newly released "2022 Proxy Trends & Analysis" reveals the results of its review of the S&P 250 proxy statements (companies listed in Appendix A) filed between September 1, 2021 and July 1, 2022, with suggested investor-friendly designs, formats, and disclosure enhancements, and an abundance of noteworthy benchmarking data.
Key takeaways include:
Leadership letters
- A majority of proxies (57%) included a substantive letter from the board chair or CEO (or combined CEO/Chair) with information such as governance or compensation highlights.
- Few proxies (20 companies) included a letter from the entire board of directors.
- 16% included a letter from the Lead Independent Director or other non-Chair, non-CEO leadership.
- Few proxies (31 companies) included a letter from the Compensation Committee explaining compensation program highlights or recent changes.
Proxy summaries
- 77% included a proxy summary. The vast majority of those (at least 80%) included a tabular summary of the proposals and board recommendations and governance and compensation highlights, and more than half of those included graphics highlighting company performance.
- 37% included a CD&A table of contents.
- 62% included a governance practices-specific "what we do/don't do" table or similar summary.
- 88% included a compensation practices-specific "what we do/don't do" table.
Director nominees
- 87% included photos of the directors.
- 76% included a graphic highlighting board tenure; 80% included a graphic highlighting gender and/or ethnic diversity; and 41% included a graphic highlighting age diversity.
- 64% included an individualized skills matrix; 40% included an aggregated skills matrix.
ESG risk oversight
- 97% of companies addressed the allocation of ESG oversight: 74% whole board | 82% specific board committee | 30% management.
- 67% of companies disclosed specific ESG frameworks: 72% SASB | 82% TCFD | 45% GRI | 30% UN SDGs | 9% World Economic Forum.
- 83% included HCM disclosure, most commonly in the ESG section of the proxy. Of those, 55% include HCM as a board area of expertise; 51% reported discussing HCM with shareholders; and 77% defined HCM as a company risk or board responsibility.
- 46% mentioned political spending in the Governance section of the proxy.
- 84% addressed the company’s position on workforce diversity.
Board effectiveness
- 33% used graphics to illustrate the board and committee evaluation process; 20% used graphics to illustrate the nomination process.
- 59% addressed their director onboarding and/or continuing education programs.
See our recent report: “Guide to Effective Proxies: Samples Galore!” and numerous additional resources on our Annual Meeting/Proxy Statement page.
This post first appeared in the weekly Society Alert!