Fenwick Releases Report Detailing 2015 Proxy Season Results in Silicon Valley

MOUNTAIN VIEW, Calif., Jan. 28, 2016 /PRNewswire/ -- Fenwick & West today released its Results of the 2015 Proxy Season in Silicon Valley report. This report provides insight into significant developments related to stockholder voting at annual meetings in the 2015 proxy season, among the technology and life sciences companies included in the Silicon Valley 150 Index (SV 150), as well as the public companies in other industries included in the Bay Area 25 Index (BA 25).

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These developments include a variety of statistics regarding director elections, "say-on-pay," and a variety of other compensation, governance and policy matters. This report is a companion supplement to the Fenwick survey, Corporate Governance Practices and Trends: A Comparison of Large Public Companies and Silicon Valley Companies, released in December 2015.

In the 2015 proxy season, most of the SV 150 and BA 25 companies held annual meetings that included voting for the election of directors, ratifying the selection of auditors of the company's financial statements and voting on executive officer compensation ("say-on-pay"). Increasingly annual meetings also include voting on other matters, such as proposals in compensation, governance, policy and other general business issues.

This report provides results for these commonly voted matters at annual meetings, as well as voting breakdowns and results in other topics:

Director Elections

    --  The average size of the board slate up for election among the SV 150 was
        5.7 directors (median = 6), compared to 8.8 directors among the BA 25
        (median = 10). The most common number of directors being elected was 3
        directors in the SV 150, with the number ranging from 1 to 15 (compared
        to a range of 3 to 16 directors among the BA 25, with 11 most common).
    --  In the vast majority of cases, the elections of directors were
        uncontested. There were 142 uncontested elections of directors in the SV
        150 (and 24 in the BA 25), and only two SV 150 companies that had
        contested elections in the 2015 proxy season. None of the BA 25
        companies had a contested election.
    --  In the SV 150, the median of the average percentage of votes for (as
        opposed to votes against or withheld) each company's nominees was 97.7%,
        ranging from 72.8% on average up to 100% voted for the board-sponsored
        nominees (compared to a median of 99.0% and range of 97.9% to 99.9% in
        the BA 25). Approximately 13.5% of the SV 150 companies that had
        uncontested elections had an average of 20% or more of the vote against
        or withheld against their board-nominated candidates (compared to none
        in the BA 25).

Say-on-Pay

    --  Since 2011, public companies have generally been required to hold a
        "say-on-pay" vote - a periodic non-binding vote on whether stockholders
        approve the compensation paid to the company's named executive officers,
        as disclosed in the proxy statement.
    --  Of the 116 companies in the SV 150 that held say-on-pay votes at their
        annual meetings in the 2015 proxy season (in the BA 25), five companies
        in the SV 150 lost the vote (compared to none of the 21 companies in the
        BA 25 holding say-on-pay votes).
    --  Say-on-pay opposition reached 15% or more of votes cast (ignoring
        abstentions and broker non-votes) at 23% of SV 150 companies (compared
        to 10% of BA 25 companies). Within the SV 150, opposition reached 30% or
        more at 10 companies (of which eight had opposition of 40% or more,
        including the aforementioned five companies that lost the vote).

Other Proposals Voted On

    --  Generally, stockholders at larger companies were asked to vote on more
        matters than at smaller companies. The increased number of proposals at
        larger companies was due to the fact that no stockholder-sponsored
        proposals were voted on by stockholders outside of the top 50 companies
        in the SV 150 companies, as well as the fact that larger companies are
        significantly more likely to hold say-on-pay votes annually.

Company Proposals

    --  In both SV 150 and BA 25 companies, company-sponsored proposals are
        spread across compensation (primarily say-on-pay and equity plan
        proposals), governance (primarily director elections) and other general
        business (primarily auditor approval), and are also significantly more
        likely to be passed than those sponsored by stockholders.
    --  Excluding the director elections, say-on-pay (and say-on-frequency) and
        auditor approval voting, stockholders at SV 150 companies voted on 95
        company-sponsored proposals in the 2015 proxy season, primarily in
        compensation-related subjects, as well as some governance matters
        (compared to 21 such proposals at BA 25 companies, which were more
        evenly split between compensation-related and governance matters).

Shareholder Proposals

    --  Stockholder-sponsored proposals were more frequently focused on policy
        issues or governance matters and also significantly less likely to be
        passed than those sponsored by companies, in both SV 150 and BA 25
        companies.
    --  Excluding competing director slates, SV 150 company stockholders were
        asked to vote on 41 stockholder-sponsored proposals at annual meetings
        during the 2015 proxy season (compared to 21 such proposals voted on by
        stockholders of BA 25 companies). Within the SV 150, more than
        two-thirds of stockholder-sponsored proposals were voted upon at the top
        15 companies.
    --  The most common topics for stockholder-sponsored proposals in the SV 150
        were proxy access and environmental/sustainability, while the most
        common topic in the BA 25 was the requirement of companies to have an
        independent chair of the board.

Complete results of this report with related discussion are posted on Fenwick & West's website at www.fenwick.com/proxyseason.

About Fenwick & West
Fenwick & West provides comprehensive legal services to ground-breaking technology and life sciences companies - at every stage of their lifecycle - and the investors that partner with them. We craft innovative, cost-effective and practical solutions on issues ranging from venture capital, public offerings, joint ventures, M&A and strategic relationships, to intellectual property, litigation and dispute resolution, taxation, antitrust, and employment and labor law. For more than four decades, Fenwick has helped some of the world's most recognized companies become and remain market leaders. For information about a career at Fenwick visit us at fenwick.com/careers.

Contact: Bruce Chan, 650-428-4838, [e-mail]

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