Pay Versus Performance Rules, Board Diversity,
and ESG Lead Focus Areas
CHICAGO, Sept. 27,
2023 /PRNewswire/ -- DFIN, a leading risk and
compliance company, today released its annual Guide to Effective
Proxies. The 11th edition of the comprehensive and widely used
guide aims to help companies evolve their proxy statements into
more effective communications tools for modern-day investors while
complying with U.S. Securities and Exchange Commission (SEC)
regulations.
This year's guide features proxy statements from DFIN clients
who have raised the bar with their disclosures and created new and
heightened investor expectations in the proxy arena. The guide
offers insights and best practices for companies looking to better
showcase their Board diversity, the new pay versus performance
rule, ESG initiatives, and more.
To demonstrate how to navigate and utilize the guide, DFIN will
host a webcast on October 4, 2023, at
1:00 p.m. ET. Register for the
webcast.
"Each year, DFIN assists more than one-third of all U.S.
companies with their proxy statements, resulting in enhanced
disclosures that showcase companies in their best light and appeal
to a wide range of stakeholders," said Craig Clay, President of Global Capital Markets
at DFIN. "We are proud that our annual guides have become a trusted
resource for all our stakeholders, and we look forward to
continuing to support our existing and future clients."
Notable disclosure trends highlighted in the guide include:
- Pay versus Performance (PvP): Companies have been
telling their Pay for Performance (PfP) story in their Compensation
Discussion and Analysis statements for years. New regulations
regarding PvP call for quantitative disclosure on executive pay
relative to certain financial metrics in order to best illustrate
trends. This guide shows how organizations differentiated PvP
while finding new ways to tell their PfP story and better
illustrate the relationship between executive compensation paid and
financial performance.
- Universal Proxy rules: The recent requirement of
Universal Proxies in contested board elections increases the need
to explain each director's unique contributions, not just overall
board strength. This guide highlights companies that respond
proactively, many of which revamped their traditional approach to
the director bio.
- Board diversity and qualifications: Investors consider
director age, tenure, and diversity when evaluating a board's
quality and competency. Each year, more companies use expertly
designed charts, graphs, and photographs to highlight board
diversity metrics and accompany relevant facts delivered in
traditional narrative. Such efforts increase transparency and
humanize boards for investors.
- ESG and corporate climate impact: Investors broadly
believe global warming creates human, environmental, and economic
costs. Ahead of pending SEC climate-related disclosure mandates,
investors are demanding portfolio companies disclose this
information so they may accurately evaluate risk. Within the guide,
companies share various ways they discuss their impact on the
environment, related risks and opportunities, transition plans and
commitments, metrics, and targets.
"DFIN reviewed over 1,000 proxies when creating this year's
guide and compiled best-in-class, practical examples intended to
help companies comply with new and forthcoming regulations and
impress increasingly demanding investors," said Ron Schneider, Director of Corporate Governance
Services at DFIN. "Whether it is metrics surrounding ESG, PvP,
Board oversight, or risk management, our guide features innovative
and shareholder-friendly approaches to proxy disclosures that will
help companies stay compliant and stand out."
About DFIN
DFIN is a leading global risk and
compliance solutions company. We provide domain expertise,
enterprise software, and data analytics for every stage of our
clients' business and investment lifecycles. Markets fluctuate,
regulations evolve, technology advances, and through it all, DFIN
delivers confidence with the right solutions in moments that
matter. Learn about DFIN's end-to-end risk and compliance solutions
online at DFINsolutions.com, or you can also follow us on Twitter
@DFINSolutions or LinkedIn.
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SOURCE Donnelley Financial LLC