Proxy Access Impact Seen as Similar to `Say-on-Pay'

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By Andrea Vittorio

June 20 — The push to give shareholders more of a say in corporate board elections may end up having an effect similar to “say-on-pay” provisions granting shareholders influence over executive compensation.

Energy companies are among those in which shareholders are asking for proxy access. Among other purposes, that access could be used to ensure that corporate board members have greater familiarity with climate change issues.

Proxy access, which typically allows investors that own 3 percent stakes for at least three years to name nominees to the board, is “fairly young,” Gregory Lau, a managing director at board and executive recruiting firm RSR Partners, said June 20.

But Lau said it could ultimately help improve the dialogue between investors and companies on issues such as director diversity and turnover rates, much like say-on-pay did for executive compensation.

“I think boards are on notice,” he said at a Skytop Strategies summit focused on environmental, social and governance issues in business and investment. “I think boards have listened to it.”

More Engagement?

New York City's pension funds launched an unprecedented campaign for proxy access last year. Since then, more than 200 companies have enacted proxy access bylaws, including Exxon Mobil and its oil industry peers Chevron Corp., ConocoPhillips, Occidental Petroleum, Anadarko Petroleum and EOG Resources.

“I think it's going to prompt greater engagement,” Scott Zdrazil, who directs strategy and corporate engagement at the Office of the New York City Comptroller, said at the event.

“The market adopted say-on-pay a few years ago,” he said, “and I think the biggest result was that it significantly enhanced the discussion between investors and issuers around pay practices.”

Now, “we want to talk about the board,” Zdrazil said. “We want to talk about corporate strategy. We want to talk about how this board is the right board for that corporate strategy.”

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Larry Pearl at

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