How to Obtain Shareholder Approval of an Equity Compensation Plan

As part of your proxy statement filed with the SEC, you will disclose information about an equity compensation plan if it’s on your ballot for shareholder approval at the annual shareholders meeting. Broc Romanek first covers when shareholder approval is required to be obtained – and then what must be disclosed in the proxy.

Then, at the 07:58 mark, our guest – Alliance Advisors’ Reid Pearson – gives us some practical solicitation guidance about what strategies you might consider to obtain as successful a result as you can at the annual shareholders meeting, including:

1. What types of narrative disclosures do you see to explain why the plan should be approved?
2. What are the reasons beyond an increase in the amount of shares, the projections & any potential dilution? What is the best “marketing” strategy when it comes to your disclosures?
3. What do you do if you don’t know the exact amounts that could be issued in the new or modified plan, do you provide an estimate?
4. Why do companies always append the actual plan to the end of the proxy?
5. How does ISS evaluate these plan proposals?
6. How does Glass Lewis evaluate these plan proposals?
7. What about the major institutional investors – are they looking for anything that the proxy advisors aren’t?
8. What areas are companies most likely to trip up on?

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