CSIM believes that the board is typically best positioned to determine its leadership structure. Therefore, CSIM will typically not support proposals requiring the separation of these roles unless certain circumstances are in place.
Factors that may result in a vote supporting a shareholder proposal requiring the separation of the Chair and CEO roles:
The board does not have a lead independent director
The board is not two-thirds independent
The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings
The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting
The company had material financial statement restatements
The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval
Ongoing executive compensation concerns
Ongoing financial underperformance
Lack of robust lead independent director
Independent Chair
CSIM believes that the board is typically best positioned to determine its leadership structure. Therefore, CSIM will typically not support proposals requiring an independent chair unless CSIM has concerns regarding the board’s accountability or responsiveness to shareholders.
Factors that may result in a vote supporting a shareholder proposal requiring an independent chair:
The board does not have a lead independent director
The board is not two-thirds independent
The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings
The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting
The company had material financial statement restatements
The company’s board adopted a Shareholder Rights Plan during the past year and did not submit it to shareholders for approval
Ongoing executive compensation concerns
Ongoing financial underperformance
C.
COMPENSATION
Advisory Vote on Executive Compensation and Frequency
CSIM generally supports advisory votes on executive compensation (which are proposed by management and are known as “Say-On-Pay”) when the compensation scheme appears aligned with shareholder economic interests and lacks problematic features.
Factors that may result in a vote against a company’s Say-On-Pay proposal:
Executive compensation is out of line with industry peers considering the company’s performance over time
Executive compensation plan includes significant guaranteed bonuses or has a low amount of compensation at risk
Executive compensation plan offers excessive one-time payments, perquisites, tax-gross up provisions, or golden parachutes
Compensation amounts are increased, or goals are lowered without providing a valid explanation
Executive compensation plan lacks adequate disclosure or rationale for decisions related to goals and amounts
CSIM typically supports annual advisory votes on executive compensation.
Equity Compensation Plans
CSIM generally supports stock-based compensation plans when they do not overly dilute shareholders by providing participants with excessive awards and lack problematic features.