Is it Better to Propose a New Omnibus Plan or to Amend an Existing Omnibus Plan?

I am often asked whether it is better to ask shareholders to approve an amendment of an existing omnibus plan or a completely new omnibus plan. Generally, there is not too much difference since you can make the amendments ensure that the existing omnibus plan complies with current corporate governance best practices.  But, in point of fact, there is a slight difference when I look at the voting for proposals to amend an existing plan versus to approve a new plan.

Mind you, the difference is not all that much.  But for companies that are looking to do everything possible to ensure a favorable vote outcome, then serious thought should be given to adopting a new omnibus plan since such proposals receive higher levels of voting support.  That said, the median level of vote support for proposals to amend an existing omnibus plan are slightly higher than the median support for proposals to approve a new omnibus plan.  But this is offset by the fact that proposals to approve new omnibus plans have more votes coming in at or above the 90% level.

The charts below look at the vote support at median and average and by support level for both of these proposals using data from the ISS Voting Analytics database for S&P 500 companies with such proposals in 2015, 2016 and in 2017 so far.

Source: ISS Voting Analytics database

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