Building a holistic approach to corporate governance can literally span hundreds of distinct policies. We regularly conduct governance audits on behalf of our clients to ensure their programs remain aligned with best practices and the requirements of proxy advisors and investors.
Balancing Best Practice with Your Business Needs
Getting corporate governance right requires far more than a "check-the-box" mentality. Leveraging our extensive research resources and governance expertise, we help our clients implement, reassess and modify governance policies that make sense for their business and stage of development. Key areas of emphasis include:
- Board of Director composition and roles;
- Committee charters and independence polices;
- Stock ownership guidelines and holding requirements;
- Claw-back policy design;
- Anti-hedging and anti-pledging policies;
- Peer group selection practices; and
- Severance and change-in-control policies.
Review Your Compensation Committee Charter
Every public company needs to review their Compensation Committee charter on an annual basis to remain in compliance with listing requirements and to ensure alignment with market best practices. We work with client to provide two levels of review and support in this area:
- Basic Review – Our team will thoroughly review your existing Compensation Committee charter to look for potential issues and ongoing compliance with listing requirements. Our findings will then be presented as an executive summary for business leaders and Board of Director members.
- Expanded Review – For clients interested in understanding peer practices, we offer an expanded review. We’ll examine peer company charters on both a quantitative (e.g., the prevalence of key practices) and qualitative (e.g., interesting excerpts) basis to develop recommendations for taking a leading governance position in the market.
Review Your Executive & Director Compensation Disclosures
The rules governing executive and director compensation disclosures are numerous and complex, and not always set firmly in black and white. Additionally, as companies make ongoing changes to their compensation plans and grant certain types of incentive awards, they need to determine if these periodic updates require special disclosures. Failure to comply with compensation disclosure rules, no matter how minor, can expose companies to legal action from shareholders. We work with clients to migrate the risk of lawsuits by conducting technical reviews of executive and director compensation disclosures, including:
- Auditing executive and director compensation tables and footnotes, including the Summary Compensation Table, The Grants of Plan Based Awards Table and the Director Compensation Table;
- Reviewing narrative disclosures surrounding key executive and director compensation tables; and
- Supporting the creation of CD&A statements; for more information, please click here.
Reassess Your Change in Control Provisions and Calculations
In addition to the services described above, we perform a variety of services related to severance and change in control agreements and calculations. We help our clients with:
- Reviewing existing agreements to identify potential investor and proxy advisor concerns;
- Developing detailed tally sheets across all manner of severance and change in control scenarios;
- Modeling payout scenarios to assess the impact of proposed agreement and/or plan design changes; and
- Conducting 280G golden parachute calculations to determine excise tax and gross-up payment liabilities.