Pay Decision Disclosures

Communicating pay decisions to shareholders may not stem the tide of poor Say on Pay support that companies faced over the last two years. Nonetheless, effective disclosures outline the rationale and purpose behind pay decisions made by the board. Companies that suffer in one year’s Say on Pay vote can achieve favorable results again if they maintain a good track record of disclosure and shareholder engagement.

Alongside our Say on Pay report that focused on special awards, MyLogIQ utilized our CompanyIQ® SEC EDGAR search tool to identify proxy disclosures of companies that granted such awards since 2019. What follows are two examples of disclosures from companies that fared well in two out of the last three years Say on Pay votes but suffered in a third year, though not necessarily in that order, in part because of a special grant. We also look at a disclosure example of a unique pay program that typically garners poor support.

After Two Favorable Years of Say on Pay Results, Sysco’s 2021 Disclosure Focused on a Special
Award Granted Following Unforeseen Effects of the Covid-19 Pandemic

Disclosure Example 1 – Sysco received favorable Say on Pay results in previous years and 59% after making
adjustments to a previous new-hire grant in response to the Covid-19 pandemic.

SYSCO CORP, DEF 14A, 10/6/2021, P. 55

Say on Pay Results:

  • 2021 - 58.8%
  • 2020 - 88.4%
  • 2019 - 95.8%
After a Significant Dip in its 2020 Say on Pay Results, AMD’s 2021 Disclosure Explains Rationale
for Previously Granted One-Time Awards

Disclosure Example 2 – AMD receives favorable Say on Pay support in 2019 and 2021 but not in 2020 after a
special grant. Disclosure indicates minimal program changes to annual grants going forward.

ADVANCED MICRO DEVICES INC, DEF 14A, 3/31/2021, PP. 36, 38

Say on Pay Results:

  • 2021 - 94.7%
  • 2020 - 66.9%
  • 2019 - 96.8%

Netflix’s Most Recent Proxy Disclosure Acknowledges Shareholder Concerns with Pay Program

Disclosure Example 3 – Netflix received less than 70% shareholder support for its Say on Pay proposal in
each of the last three years. Special awards or adjustments were not a factor, and the company disclosed its
positions after engagement with investors.

NETFLIX INC, DEF 14A, 4/23/2021, P. 41

Say on Pay Results:

  • 2021 - 50.6%
  • 2020 - 61.5%
  • 2019 - 49.8%