Login | Help

1

A guide for making the most of this year’s proxy season

proxy

Use these tips to start planning a package round the proxy statements of the publicly traded companies you cover.

This is a good time of year to be a business journalist, with months to go before the summer doldrums strike and plenty of financial fodder afoot.  The fiscal year has begun to take shape, from the spring housing-sales season and critical construction period to a plethora of trade conferences and expos that provide behind-the-scenes insight into industry trends.  We’re still months from the summer doldrums and half a year from the fourth-quarter holiday focus.

And one of the most interesting second-quarter pastimes is the perusal of proxy statements, those annual filings required by the Securities and Exchange Commission in which corporations detail such fruitful nuggets as CEO pay and share-price performance.  Now is a good moment to start planning a package built around the proxy statements of the publicly traded companies you cover. (To help in timing, search the past filings of companies of interest via the SEC’s Edgar database to see when their proxies hit the street last year; most corporations keep their routines about the same from year to year. Here’s a good Wiki.how tipsheet on how to search for the form, which formally is known as def 14a.)

With income inequality one of the hot topics of 2013, and one that is increasingly being used to frame analysis of public policy, political issues and corporate citizenship, you’ll definitely want to contemplate some sort of pay package to utilize the compensation information that proxies offer.  You can rank area CEOs by base salary and/or total compensation, and juxtapose this info with share price performance, revenue/earnings figures and other metrics for the year.  Just make it clear to readers that this information is being provided for the management of publicly traded companies only; as I’ve suggested before you might want to include a sidebar explaining why locally known big names in charge of private firms aren’t on the list.

Ideally you would illustrate the gap between the top-highest-earners required to be included in the proxy and corporate rank-and-file.  Most companies probably won’t divulge average wages for their low- and mid-level workers; you can use properly attributed anecdotes or check with unions, guilds and industry groups or professional societies to see if more quantitative data exists.   You also could use occupational data compiled by the Bureau of Labor Statistics; of course it won’t be apples to apples but with the appropriate caveats might produce some useful insight.  For example, if your area is home to a publicly-traded restaurant chain, adding BLS stats about the media wage of, say, a restaurant cook ($10.52 per hour) might provide some context.

You’ll also want to look at “other compensation” which can be a trove of information about perks for executives ranging from extra life insurance and medical checkups to a company-paid apartment, driver or season sports tickets.  Insider dealings are reported in “related party transactions,” if, for example, the company were leasing a warehouse from the relative of a manager or employing the marketing firm owned by a CFO’s spouse.  Sometime interesting alliances pop up there.

Director compensation also is interesting — are they taking their pay in shares as a sign of faith in the company?  Reviewing this data also is a good reminder that cultivating directors may be part of solid corporate beat reporting.

Shareholder activism.  Again, from environmental concerns to senior-manager pay, investors get a chance to nudge firms during proxy and annual meeting season.  Here’s a just-out report from Ernst & Young LLP, “Proxy Season 2013 Preview,” about how firms can manage what it says is a high rate of shareholder proposals.   The Stanford University Corporate Governance and Leadership Wire also provides a good glimpse into hot topics (and potential sources of analysis).  And ProxyMonitor.org keeps track of shareholder proposals in real time and offers a searchable database.

In Beats, Economy, Featured, Investing | Banking, Manufacturing | Large companies, Story ideas.

Comments (1)

Trackback URL | Comments RSS Feed

  1. Heidi Welsh says:

    Another good source of information about social and environmental proxy resolutions is the just-released Proxy Preview 2013, with analysis of these proposals and a compilation of activist and expert opinion on the various campaigns. See http://www.proxypreview.org for the full report and webinar playback.

Leave a Comment

1) Register to join the community & comment or 2) Quick comment
Username: Username:
Email: Email:
Password:
Verify Password:
or 3) Login if you already have an account
Comment: