Category Plan / Plan Amendment Approval Process

Fidelity Issues 2011 Proxy Voting Guidelines

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Fidelity just issued its 2011 Proxy Voting Guidelines.  As promised, they are a significant departure from past guidelines in the area of equity plan proposals. Where in years past Fidelity looked to dilution as the guiding principle along with assorted other concerns in determining its vote on equity plan proposals, it has now replaced that with 3-year average burn rates:

  • 1.5% for Large Caps—companies in the Russell 1000 Index
  • 2.5% for Small Caps—companies not in the Russell 1000 Index
  • 3.5% for Micro Caps—companies with a market cap under US$300 million

I have not yet had a time to read all the way through them or get answers to some of my questions, i.e., how does Fidelity define “burn rate.” But given how significant the change is regarding equity plan proposals, I wanted to get this information out ASAP.

Here is a link to the new proxy voting guidelines:


Upcoming Speaking Engagements – Week of January 17, 2011

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Ed Hauder will be speaking at the following events during the week of January 17, 2011:

Webcast: The Current Governance and Proxy Voting Landscape

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On October 7, 2010, Ed Hauder of Exequity will join Andrew Letts of State Street Global Advisors and Reid Pearson of Alliance Advisors, LLC for this Alliance Advisors’ webcast. The speakers will discuss the current governance and proxy voting landscape, including the Dodd-Frank Act, say on pay, equity plan proposals and proxy access.

For more information about this FREE webcast, including how to register, please visit:

Special Report: Equity Plan Proposal Failures: 2007-2009

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The Special Report: Equity Plan Proposal Failures: 2007-2009, Lessons to Consider When Requesting Shares, has been posted on the Special Reports page of this blog under “Reference Materials.”

(Note: you’ll need to have the password to access this page. The password is available to anyone who signs up for Ed’s weekly newsletter in the left-hand side-bar. The password will be automatically e-mailed to you upon sign-up)

In this Special Report, Ed Hauder of Exequity and Reid Pearson of The Altman Group examine the 38 equity plan proposals that failed out of approximately 2,200 total proposals put forward by Russell 3000 companies from 2007 through 2009. The authors detail several lessons for companies to consider when requesting shares, the most significant of which are to ensure that both dilution and burn rate are not excessive.

The Special Report also looks at the success rates of RiskMetrics/ISS’ against vote recommendations for equity plan proposals and finds that they vary, sometimes significantly, based on the industry group. Similarly, the percent of equity plan proposals that failed varies based on industry group. Companies that are considering requesting shareholders to approve additional shares for their equity compensation plans will have a better idea of the challenges they face after reading this Special Report. 


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