November 30, 2018
Authored by: Lisa Van Fleet and Denise Erwin
On October 24th, Glass Lewis published its updated proxy voting guidelines for 2019. Some key compensation-related changes for reporting companies to keep in mind are highlighted below:
Excise Tax Gross-ups
When any new excise tax gross-ups are provided for in executive employment agreements, Glass Lewis may recommend against members of the compensation committee, particularly where a company previously committed not to provide gross-ups in the future. Glass Lewis is particularly opposed to gross-ups related to excise taxes on excess parachute payments. New gross-up provisions with respect to these excise taxes may lead to negative recommendations for a company’s say-on-pay proposal.
Contractual Payments and Arrangements
The new guidelines clarify the terms that may contribute to a negative voting recommendation on say-on-pay proposals. When evaluating sign-on and severance arrangements, Glass Lewis will consider the size and design of any payments as well as U.S. market practice. Glass Lewis will consider the executive’s