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Say on Pay 2013 Begins With Three Failures

It is that time of year again for shareholder say on pay votes.  Already we are seeing companies struggling and three failures. Below we have our analysis of these failures. All proxy season we will be updating you with our analyses of the failures, and the lessons which should be learned from them.

Nuance Communications

Beware of an award for signing a new agreement.  The Company's CEO received a $35mm (750,000 shares) grant to sign a new employment agreement.  The grant vests over three years in connection with the employment period.

1 Yr TSR -10%

3 Yr TSR +45%


Digitial Generation

A great CD&A doesn’t cure disconnected pay and performance with ISS.  The Company's CD&A was well written with a summary, bullets, charts, and a realizable pay chart that shows take home pay is reasonable, yet the CEO nearly doubled reportable total compensation to $4.8mm, yet TSR was:

1 Yr TSR -10%

3 Yr TSR -60% 


Navistar International

Beware of Carl Icahn.  They failed say on pay with only 17% of the vote, but this company is only held by 3 investors, Carl Icahn is one of them. Enough Said.  The two investors that voted against may have had concerns over the outgoing CEO’s severance payments of $8mm, or the sign on award of the new CEO for just over $5mm.


Written by: Chris Crawford & Jon Covington

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