I know many public filers have been waiting to see what others are going to be recommending for say-on-pay frequency in this proxy season. I took a look at some early PRE DEF 14A documents and DEF 14As and found the following excerpts which may be helpful in drafting your own proxies and determining the optimal frequency. I will keep providing excerpts and updated stats as we get closer to the proxy season, but as of this writing, I had found 17 examples. Five recommend annual votes, one recommends biennial, one makes no recommendation and the overwhelming majority recommends a triennial vote.
I will start with the one biennial vote since it is unusual and takes some language and theory from both the triennial and annual advocates, and perhaps from Goldilocks, who also was seeking the elusive "just right."
Hormel Foods
The Board of Directors believes a biennial frequency (i.e., every two years) is the optimal frequency for the say-on-pay vote. A say-on-pay vote every two years strikes the right balance between having the vote too frequently with an annual vote and being less responsive to stockholders with a vote every third year. A vote every two years provides stockholders and advisory firms the opportunity to evaluate the Company’s compensation program on a more thorough, longer-term basis than an annual vote.
The Board believes an annual say-on-pay vote would not allow for changes to the Company’s compensation program to be in place long enough to evaluate whether the changes were effective. For example, if the say-on-pay vote in January 2011 led to changes to the compensation program being made in November 2011, at the beginning of the next fiscal year, those changes would be in place only a few months before the next annual say-on-pay vote would take place in January 2012. For a related example, even if changes were made to the compensation program shortly after a say-on-pay vote in January 2011, those changes would be in place only for the last half of fiscal 2011 and the first few months of fiscal 2012 before the next annual say-on-pay vote would take place in January 2012.
Conversely, waiting for a say-on-pay vote once every three years may allow an unpopular pay practice to continue too long without timely feedback. A say-on-pay vote every two years is also sensitive to stockholders who have interests in many companies and may not be able to devote sufficient time to an annual review of pay practices for all of their holdings.
The only other instance we have found of biennial votes was at Winn Dixie who is not currently subject to a vote on frequency of their say on pay vote. Below they note that the biennial frequency will be reviewed at the 2011 annual meeting.
The Board of Directors is providing shareholders with the opportunity to cast an advisory vote on the compensation of our named executive officers. This proposal, commonly known as a “say on pay” proposal, gives you, as a shareholder, the opportunity to endorse or not endorse our fiscal 2010 executive compensation programs and policies and the compensation paid to the named executive officers. Our Governance Principles currently provide that this advisory “say on pay” vote will be provided to our shareholders on a biennial basis, although we note that the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) will require a say on pay vote at our 2011 annual meeting, as well as an advisory vote with respect to whether future say on pay votes will be held every one, two or three years. We expect that our Board of Directors will review our Governance Principles in view of the say on pay vote required under the Dodd-Frank Act and also after our shareholders express their preferences for having say on pay votes every one, two, or three years.
The following companies who have filed PRE DEF 14As and DEF 14As in the last few weeks are recommending triennial votes noting long term equity evaluation cycles and the need for time to understand feedback and make changes as their most common rationale.
Woodward Governor
We are aware of the significant interest in executive compensation matters by investors and the general public, and value and encourage constructive dialogue on executive compensation and other important governance topics with our stockholders, to whom we are ultimately accountable. As discussed above, our executive compensation philosophy is focused on aligning Company objectives with long-term stockholder value, and accordingly, our executive compensation approach does not vary significantly from year to year. We believe that providing our stockholders with an advisory vote on executive compensation every three years aligns with this long term philosophy (e.g., our three-year cycles for LTIP awards), achieves our stockholder outreach objectives, and provides an appropriate means by which to receive input on our executive compensation policies and practices.
Johnson Controls
We appreciate the past approval of our incentive pay programs by our shareholders, which have historically occurred every five years. This has served both our company and our shareholders well, ensuring a direct alignment between executive compensation and financial performance results. Setting a three year period for holding this shareholder vote will enhance shareholder communication by providing a clear, simple means for the Company to obtain information on investor sentiment about our executive compensation philosophy. An advisory vote every three years will be the most effective timeframe for the Company to respond to shareholders’ feedback and provide the Company with sufficient time to engage with shareholders to understand and respond to the vote results. The Company also believes a triennial vote would align more closely with the multi-year performance measurement cycle the Company uses to reward long-term performance. Our executive compensation programs are based on our long-term business strategy, which is more appropriately reflected with a three year timeframe.
Monsanto
Our executive compensation program is designed to support long-term value creation, and a triennial vote will allow shareowners to better judge our executive compensation program in relation to our long-term performance. As described in the Compensation Discussion and Analysis section above, one of the core principles of our executive compensation program is to ensure management’s interests are aligned with our shareowners’ interests to support long-term value creation. Accordingly, we grant awards with multi-year performance and service periods to encourage our proxy officers to focus on long-term performance, and recommend a triennial vote which would allow our executive compensation programs to be evaluated over a similar time-frame and in relation to our long-term performance.
A triennial vote will provide us with the time to thoughtfully respond to shareowners’ sentiments and implement any necessary changes. We carefully review changes to our program to maintain the consistency and credibility of the program which is important in motivating and retaining our employees. We therefore believe that a triennial vote is an appropriate frequency to provide our people and compensation committee sufficient time to thoughtfully consider shareowners’ input and to implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any decisions related to such changes.
We will continue to engage with our shareowners regarding our executive compensation program during the period between shareowner votes. Engagement with our shareowners is a key component of our corporate governance. We seek and are open to input from our shareowners regarding board and governance matters, as well as our executive compensation program, and believe we have been appropriately responsive to our shareowners. We believe this outreach to shareowners, and our shareowners’ ability to contact us at any time to express specific views on executive compensation, hold us accountable to shareowners and reduce the need for and value of more frequent advisory votes on executive compensation.
Costco does not take a lot of space explaining their triennial recommendation:
The Board believes that a frequency of “every three years” for the advisory vote on executive compensation is the optimal interval for conducting and responding to a “say on pay” vote. Shareholders who have concerns about executive compensation during the interval between “say on pay” votes are welcome to bring their specific concerns to the attention of the Board. Please refer to “Shareholder Communications to the Board” in this Proxy Statement for information about communicating with the Board.
Emerson Electric
The Board has determined that an advisory vote on executive compensation every three years is the best approach for the Company based on a number of considerations, including the following:
• Our compensation program is designed to induce performance over a multi-year period. For example, as discussed in the Compensation Discussion and Analysis, performance share awards represent a significant part (45-55%) of the total compensation and 70-80% of the long-term compensation for named executive officers. Unlike many companies, Emerson awards performance shares every three years rather than annually, and the payout is based on a four-year performance period. Similarly, stock options are generally awarded every three years. A vote held every three years would be more consistent with, and provide better input on, our long-term compensation, which constitutes the majority of the compensation of our named executive officers;
• A three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any desired changes to our executive compensation policies and procedures; and
• A three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation strategies and the related business outcomes of the Company.
AmerisourceBergen Corporation
Our Board has reviewed the evolution of say-on-pay and say-when-on-pay proposals and has carefully studied the alternatives to determine the approach that will best serve AmerisourceBergen and our stockholders. Our Board has determined that an advisory vote on executive compensation held every three years would be the best approach for AmerisourceBergen based on a number of considerations, including, among other things, the following:
• Our compensation program ties a substantial portion of the compensation provided to our named executive officers to our long-term corporate performance and stockholder returns. We believe that a triennial vote will give our stockholders the opportunity to more fully assess the success or failure of our long-term compensation strategies and the related business outcomes with the hindsight of three years of corporate performance; and
• A three-year vote cycle allows sufficient time for our Board to review and respond to stockholders’ views on executive compensation and to implement changes, if necessary, to our executive compensation program.
Covidien Public Limited Company
After careful consideration, the Board recommends that future shareholder “say-on-pay” advisory votes on executive compensation be conducted every three years. We believe that this frequency is appropriate for several reasons. Voting every three years, rather than every year or every other year, would align more closely with the multi-year performance measurement cycle Covidien uses to reward long-term performance. We encourage our shareholders also to evaluate our executive compensation programs over a multi-year horizon and to review our named executives’ compensation over the past three fiscal years as reported in the Summary Compensation Table. We believe that a triennial vote also would provide the Company with sufficient time to engage with shareholders to understand and respond to the “say-on-pay” vote results.
While not yet subject to the frequency vote, Microsoft also notes their triennial cycle which will be reviewed in 2011.
Governance and Say-on-Pay
In September 2009, our Board of Directors strengthened its commitment to strong corporate governance by adopting a Say-on-Pay policy that enables our shareholders to provide direct feedback to us on our executive compensation policies and practices. Shareholders have the opportunity to cast a non-binding, advisory vote every three years on the compensation programs for our executive officers. The first vote took place at our November 2009 annual shareholders’ meeting where nearly 99% of the votes cast supported our executive compensation practices.
The decision to adopt a triennial vote grew out of an open and constructive dialogue with our shareholders. Our Board of Directors determined that a three-year cycle was appropriate for Say-on-Pay votes at Microsoft after receiving input from several of our largest institutional shareholders, governance advocates, and other companies. With the enactment of a mandatory advisory vote on executive compensation as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we expect to ask our shareholders to approve the frequency for our Say-on-Pay votes at our 2011 annual meeting of shareholders.
Ashland
The Board of Directors has determined that an advisory shareholder vote on executive compensation every three years is the best approach for Ashland and its shareholders for a number of reasons, including the following:
• Ashland’s LTIP program is based on a three-year performance period. The LTIP has two performance measures, Return on Investment (ROI) and Total Shareholder Return (TSR), each of which are based on Ashland’s performance relative to its Performance Peer Group over a three-year period;
• A three-year cycle will provide investors with sufficient time to evaluate the effectiveness of Ashland’s short-term and long-term incentive programs, compensation strategies and Company performance; and
• A three-year cycle provides the Board of Directors and the P&C Committee with sufficient time to thoughtfully evaluate and respond to shareholder input and effectively implement any desired changes to Ashland’s executive compensation program.
Sally Beauty
The Board of Directors recommends that the advisory vote on executive compensation be held every three years. A triennial approach provides regular input by stockholders, while allowing time to evaluate the effects of the Corporation's pay program on performance over a longer period. Stockholders are not being asked to approve or disapprove of the Board's recommendation, but rather to indicate their own choice as among the frequency options.
Accenture
We believe a three-year frequency is most consistent with Accenture’s approach to compensation. Our reasons include:
• We seek a consistent compensation approach from year to year across our entire 30 member executive leadership team. Because we believe that an effective compensation program should incentivize performance over a multi-year horizon, we do not make frequent changes to our programs.
• We believe the best way for shareholders to evaluate Accenture’s performance is over a multi-year period because our compensation program is designed to incent and reward performance over a multi-year period. For example, our Key Executive Performance Share Program, the most significant element of our named executive officers’ compensation opportunity, is based on a three-year performance period. For these reasons, we believe that a three-year time horizon is appropriate in order to provide shareholders with a more comprehensive view of whether our named executive officer compensation programs are achieving their objectives.
The below are the few entities that we have found so far recommending an annual vote (in line with ISS 2011 guidance.)
Wegener Corporation
In formulating its recommendation, our board of directors considered that an annual advisory vote on executive compensation will allow our stockholders to provide us with direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this agenda item.
New Jersey Resources
We believe that a non-binding shareholder vote on executive compensation should occur every year. We believe that a one-year frequency provides the highest level of accountability and communication by enabling the non-binding shareholder vote to approve the compensation of our named executive officers to correspond with the most recent executive compensation information presented in our proxy statement for our annual meetings of shareholders.
We believe that providing the vote only every two or three years may prevent shareholders from communicating in a meaningful and coherent manner. For example, we may not know whether the shareholder vote approves or disapproves of compensation for the reporting period or the compensation for previous reporting periods or both. As a result, it could be difficult to discern the implications of the shareholder vote.
Beazer Homes USA
Our Board of Directors recognizes the importance of receiving regular input from our stockholders on important issues such as our compensation programs. Our Board of Directors also believes that a well-structured compensation program should include plans that drive creation of stockholder value over the long-term and do not simply focus on short-term gains. While we believe that many of our stockholders think that the effectiveness of such plans cannot be adequately evaluated on an annual basis, especially in a cyclical industry such as ours, the Board of Directors believes that at present it should receive advisory input from our stockholders each year. Accordingly, as indicated below, the Board of Directors recommends that you vote in favor of an annual advisory vote on our compensation programs.
Visa
After careful consideration of this Proposal, our board of directors has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for Visa, and therefore our board of directors recommends that you vote for a one-year interval for the advisory vote on executive compensation.
In formulating its recommendation, our board of directors considered that an annual advisory vote on executive compensation will allow our stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for Visa, and we look forward to hearing from our stockholders on this Proposal.
Torvec
Our board of directors values and encourages constructive dialogue on executive compensation and other important governance topics with our shareholders, to whom it is ultimately accountable. In connection with the 2010 Annual Meeting of Shareholders, the board of directors concluded that providing shareholders with an advisory resolution on executive compensation every year will enhance shareholder communication by providing another avenue to obtain information on investor sentiment about our executive compensation philosophy, policies, and procedures. We have adopted an advisory resolution every year (an “annual” resolution), which we believe will be the most effective means for conducting and responding to a say-on-pay resolution.
Interestingly, Tyco Electronics is the only company we have found so far where the board has opted not to make a recommendation and “has decided to consider the views of the company's shareholders before making a determination."
Look for more updates and statistics on this topic and perhaps some changes to our CD&A reports incorporating this data as we move forward into another exciting proxy season.
The Board of Directors is providing shareholders with the opportunity to cast an advisory vote on the compensation of our named executive officers. This proposal, commonly known as a “say on pay” proposal, gives you, as a shareholder, the opportunity to endorse or not endorse our fiscal 2010 executive compensation programs and policies and the compensation paid to the named executive officers. Our Governance Principles currently provide that this advisory “say on pay” vote will be provided to our shareholders on a biennial basis, although we note that the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) will require a say on pay vote at our 2011 annual meeting, as well as an advisory vote with respect to whether future say on pay votes will be held every one, two or three years. We expect that our Board of Directors will review our Governance Principles in view of the say on pay vote required under the Dodd-Frank Act and also after our shareholders express their preferences for having say on pay votes every one, two, or three years.
The following companies who have filed PRE DEF 14As and DEF 14As in the last few weeks are recommending triennial votes noting long term equity evaluation cycles and the need for time to understand feedback and make changes as their most common rationale.
Woodward Governor
We are aware of the significant interest in executive compensation matters by investors and the general public, and value and encourage constructive dialogue on executive compensation and other important governance topics with our stockholders, to whom we are ultimately accountable. As discussed above, our executive compensation philosophy is focused on aligning Company objectives with long-term stockholder value, and accordingly, our executive compensation approach does not vary significantly from year to year. We believe that providing our stockholders with an advisory vote on executive compensation every three years aligns with this long term philosophy (e.g., our three-year cycles for LTIP awards), achieves our stockholder outreach objectives, and provides an appropriate means by which to receive input on our executive compensation policies and practices.
Johnson Controls
We appreciate the past approval of our incentive pay programs by our shareholders, which have historically occurred every five years. This has served both our company and our shareholders well, ensuring a direct alignment between executive compensation and financial performance results. Setting a three year period for holding this shareholder vote will enhance shareholder communication by providing a clear, simple means for the Company to obtain information on investor sentiment about our executive compensation philosophy. An advisory vote every three years will be the most effective timeframe for the Company to respond to shareholders’ feedback and provide the Company with sufficient time to engage with shareholders to understand and respond to the vote results. The Company also believes a triennial vote would align more closely with the multi-year performance measurement cycle the Company uses to reward long-term performance. Our executive compensation programs are based on our long-term business strategy, which is more appropriately reflected with a three year timeframe.
Monsanto
Our executive compensation program is designed to support long-term value creation, and a triennial vote will allow shareowners to better judge our executive compensation program in relation to our long-term performance. As described in the Compensation Discussion and Analysis section above, one of the core principles of our executive compensation program is to ensure management’s interests are aligned with our shareowners’ interests to support long-term value creation. Accordingly, we grant awards with multi-year performance and service periods to encourage our proxy officers to focus on long-term performance, and recommend a triennial vote which would allow our executive compensation programs to be evaluated over a similar time-frame and in relation to our long-term performance.
A triennial vote will provide us with the time to thoughtfully respond to shareowners’ sentiments and implement any necessary changes. We carefully review changes to our program to maintain the consistency and credibility of the program which is important in motivating and retaining our employees. We therefore believe that a triennial vote is an appropriate frequency to provide our people and compensation committee sufficient time to thoughtfully consider shareowners’ input and to implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any decisions related to such changes.
We will continue to engage with our shareowners regarding our executive compensation program during the period between shareowner votes. Engagement with our shareowners is a key component of our corporate governance. We seek and are open to input from our shareowners regarding board and governance matters, as well as our executive compensation program, and believe we have been appropriately responsive to our shareowners. We believe this outreach to shareowners, and our shareowners’ ability to contact us at any time to express specific views on executive compensation, hold us accountable to shareowners and reduce the need for and value of more frequent advisory votes on executive compensation.
Costco does not take a lot of space explaining their triennial recommendation:
The Board believes that a frequency of “every three years” for the advisory vote on executive compensation is the optimal interval for conducting and responding to a “say on pay” vote. Shareholders who have concerns about executive compensation during the interval between “say on pay” votes are welcome to bring their specific concerns to the attention of the Board. Please refer to “Shareholder Communications to the Board” in this Proxy Statement for information about communicating with the Board.
Emerson Electric
The Board has determined that an advisory vote on executive compensation every three years is the best approach for the Company based on a number of considerations, including the following:
• Our compensation program is designed to induce performance over a multi-year period. For example, as discussed in the Compensation Discussion and Analysis, performance share awards represent a significant part (45-55%) of the total compensation and 70-80% of the long-term compensation for named executive officers. Unlike many companies, Emerson awards performance shares every three years rather than annually, and the payout is based on a four-year performance period. Similarly, stock options are generally awarded every three years. A vote held every three years would be more consistent with, and provide better input on, our long-term compensation, which constitutes the majority of the compensation of our named executive officers;
• A three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any desired changes to our executive compensation policies and procedures; and
• A three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation strategies and the related business outcomes of the Company.
AmerisourceBergen Corporation
Our Board has reviewed the evolution of say-on-pay and say-when-on-pay proposals and has carefully studied the alternatives to determine the approach that will best serve AmerisourceBergen and our stockholders. Our Board has determined that an advisory vote on executive compensation held every three years would be the best approach for AmerisourceBergen based on a number of considerations, including, among other things, the following:
• Our compensation program ties a substantial portion of the compensation provided to our named executive officers to our long-term corporate performance and stockholder returns. We believe that a triennial vote will give our stockholders the opportunity to more fully assess the success or failure of our long-term compensation strategies and the related business outcomes with the hindsight of three years of corporate performance; and
• A three-year vote cycle allows sufficient time for our Board to review and respond to stockholders’ views on executive compensation and to implement changes, if necessary, to our executive compensation program.
Covidien Public Limited Company
After careful consideration, the Board recommends that future shareholder “say-on-pay” advisory votes on executive compensation be conducted every three years. We believe that this frequency is appropriate for several reasons. Voting every three years, rather than every year or every other year, would align more closely with the multi-year performance measurement cycle Covidien uses to reward long-term performance. We encourage our shareholders also to evaluate our executive compensation programs over a multi-year horizon and to review our named executives’ compensation over the past three fiscal years as reported in the Summary Compensation Table. We believe that a triennial vote also would provide the Company with sufficient time to engage with shareholders to understand and respond to the “say-on-pay” vote results.
While not yet subject to the frequency vote, Microsoft also notes their triennial cycle which will be reviewed in 2011.
Governance and Say-on-Pay
In September 2009, our Board of Directors strengthened its commitment to strong corporate governance by adopting a Say-on-Pay policy that enables our shareholders to provide direct feedback to us on our executive compensation policies and practices. Shareholders have the opportunity to cast a non-binding, advisory vote every three years on the compensation programs for our executive officers. The first vote took place at our November 2009 annual shareholders’ meeting where nearly 99% of the votes cast supported our executive compensation practices.
The decision to adopt a triennial vote grew out of an open and constructive dialogue with our shareholders. Our Board of Directors determined that a three-year cycle was appropriate for Say-on-Pay votes at Microsoft after receiving input from several of our largest institutional shareholders, governance advocates, and other companies. With the enactment of a mandatory advisory vote on executive compensation as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we expect to ask our shareholders to approve the frequency for our Say-on-Pay votes at our 2011 annual meeting of shareholders.
Ashland
The Board of Directors has determined that an advisory shareholder vote on executive compensation every three years is the best approach for Ashland and its shareholders for a number of reasons, including the following:
• Ashland’s LTIP program is based on a three-year performance period. The LTIP has two performance measures, Return on Investment (ROI) and Total Shareholder Return (TSR), each of which are based on Ashland’s performance relative to its Performance Peer Group over a three-year period;
• A three-year cycle will provide investors with sufficient time to evaluate the effectiveness of Ashland’s short-term and long-term incentive programs, compensation strategies and Company performance; and
• A three-year cycle provides the Board of Directors and the P&C Committee with sufficient time to thoughtfully evaluate and respond to shareholder input and effectively implement any desired changes to Ashland’s executive compensation program.
Sally Beauty
The Board of Directors recommends that the advisory vote on executive compensation be held every three years. A triennial approach provides regular input by stockholders, while allowing time to evaluate the effects of the Corporation's pay program on performance over a longer period. Stockholders are not being asked to approve or disapprove of the Board's recommendation, but rather to indicate their own choice as among the frequency options.
Accenture
We believe a three-year frequency is most consistent with Accenture’s approach to compensation. Our reasons include:
• We seek a consistent compensation approach from year to year across our entire 30 member executive leadership team. Because we believe that an effective compensation program should incentivize performance over a multi-year horizon, we do not make frequent changes to our programs.
• We believe the best way for shareholders to evaluate Accenture’s performance is over a multi-year period because our compensation program is designed to incent and reward performance over a multi-year period. For example, our Key Executive Performance Share Program, the most significant element of our named executive officers’ compensation opportunity, is based on a three-year performance period. For these reasons, we believe that a three-year time horizon is appropriate in order to provide shareholders with a more comprehensive view of whether our named executive officer compensation programs are achieving their objectives.
The below are the few entities that we have found so far recommending an annual vote (in line with ISS 2011 guidance.)
Wegener Corporation
In formulating its recommendation, our board of directors considered that an annual advisory vote on executive compensation will allow our stockholders to provide us with direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this agenda item.
New Jersey Resources
We believe that a non-binding shareholder vote on executive compensation should occur every year. We believe that a one-year frequency provides the highest level of accountability and communication by enabling the non-binding shareholder vote to approve the compensation of our named executive officers to correspond with the most recent executive compensation information presented in our proxy statement for our annual meetings of shareholders.
We believe that providing the vote only every two or three years may prevent shareholders from communicating in a meaningful and coherent manner. For example, we may not know whether the shareholder vote approves or disapproves of compensation for the reporting period or the compensation for previous reporting periods or both. As a result, it could be difficult to discern the implications of the shareholder vote.
Beazer Homes USA
Our Board of Directors recognizes the importance of receiving regular input from our stockholders on important issues such as our compensation programs. Our Board of Directors also believes that a well-structured compensation program should include plans that drive creation of stockholder value over the long-term and do not simply focus on short-term gains. While we believe that many of our stockholders think that the effectiveness of such plans cannot be adequately evaluated on an annual basis, especially in a cyclical industry such as ours, the Board of Directors believes that at present it should receive advisory input from our stockholders each year. Accordingly, as indicated below, the Board of Directors recommends that you vote in favor of an annual advisory vote on our compensation programs.
Visa
After careful consideration of this Proposal, our board of directors has determined that an advisory vote on executive compensation that occurs every year is the most appropriate alternative for Visa, and therefore our board of directors recommends that you vote for a one-year interval for the advisory vote on executive compensation.
In formulating its recommendation, our board of directors considered that an annual advisory vote on executive compensation will allow our stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Additionally, an annual advisory vote on executive compensation is consistent with our policy of seeking input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our stockholders may have different views as to what is the best approach for Visa, and we look forward to hearing from our stockholders on this Proposal.
Torvec
Our board of directors values and encourages constructive dialogue on executive compensation and other important governance topics with our shareholders, to whom it is ultimately accountable. In connection with the 2010 Annual Meeting of Shareholders, the board of directors concluded that providing shareholders with an advisory resolution on executive compensation every year will enhance shareholder communication by providing another avenue to obtain information on investor sentiment about our executive compensation philosophy, policies, and procedures. We have adopted an advisory resolution every year (an “annual” resolution), which we believe will be the most effective means for conducting and responding to a say-on-pay resolution.
Interestingly, Tyco Electronics is the only company we have found so far where the board has opted not to make a recommendation and “has decided to consider the views of the company's shareholders before making a determination."
Look for more updates and statistics on this topic and perhaps some changes to our CD&A reports incorporating this data as we move forward into another exciting proxy season.
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