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How to Draft a Compelling Proxy: Center Webinar Highlights Tips and Tricks

A recent Center webinar shared tips from award-winning proxy drafters on creating a captivating statement.

Why it matters: Learn from the experts how to produce a proxy statement that engages your target audience and stands out from the rest.

Be an early bird: Ms. Wu discussed the importance of starting early when new disclosures like the SEC’s Pay for Performance rules are introduced. Chevron formed a cross functional team to conduct thorough due diligence to understand what the rule entailed and engaged multiple outside experts to hear different perspectives on how to consider “grey areas.” This helps when staff disagree on the right approach. 

“Two bites at the apple:” Mr. Canarim described how Leidos governance professionals collaborated with their executive team and compensation committee in a two-part engagement process:

  1. Spend time articulating the technical requirements of the mockup to the committee. This will enhance their understanding of the proposed approach and the subtleties of the rules. 

  2. Actively involve the committee in reviewing the actual proxy draft, equipping the directors to provide insightful advice and ask meaningful questions.

Noting that new proxy disclosures are “really a change management process,” Ms. Dunshee highlighted the importance of staying on top of changes as SEC guidance evolves, often in a matter of months.

Continuous improvement: Panelists discussed the evolution of world-class proxies from a compliance exercise to a storytelling tool. Examples of recent enhancements include:

  • Partnered with proxy design firms like Labrador and PJT Camberview to ensure the “look and feel” is visually interesting and aligned with top-quality peers.

  • Added a Q&A with a quote from each board director to bring the skills and qualifications section to life.

  • Reviewed proxies outside their peer group and from companies who are heavily scrutinized for insights on how tricky topics are presented.

Shareholder engagement is key: Ms. Dunshee discussed how carefully listening to investor feedback and questions about the proxy can help shape what changes need to be made – especially when investors disagree.

  • If an investor asks for major changes that aren’t aligned with the view of other investors, see if there is a minor but effective change that might better emphasize the work the company is doing. 

  • From a legal perspective, remember the company is still liable for misstatements when it comes to voluntary disclosures (such as on the website or sustainability report).

ICYMI: Labrador released their 2024 Proxy Statement trends and the Center recently shared Shearman & Sterling’s must-have proxy guide for 2024.

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Authors: Megan Wolf

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