Perception

Study
Communications Advisory
February 2010
Revisiting the Proxy:
Do Your Shareholders Back Your Company’s Compensation
Program and Corporate Governance Policies?
In December 2009, the SEC approved rules to enhance corporate disclosure regarding
For more
risk, compensation and corporate governance matters in proxy and information
information about
statements provided to shareholders, so that investors will be better able to evaluate the
how Dresner can
leadership and corporate governance policies of public companies. The new rules, effective
help companies
February 28, 2010, require disclosures in proxy and information statements about:
communicate with
• The relationship of a company’s compensation policies and practices to risk management. investors, please
• The background and qualifications of directors and nominees. contact us:
• Legal actions involving a company’s executive officers, directors and nominees.
• The consideration of diversity in the process by which candidates for director are considered for
nomination.
Steve Carr
• Board leadership structure and the board’s role in risk oversight.
Managing Director
• Stock and option awards to company executives and directors.
312.780.7211
• Potential conflicts of interests of compensation consultants.
scarr@dresnerco.com

How should you get started in meeting the SEC’s new rules in your Kristine Walczak
company’s upcoming proxy? Senior Vice President
312.780.7205
It is important to first collect a preliminary report card from shareholders regarding kwalczak@dresnerco.
perceptions around your company’s compensation program, board composition and com
corporate governance policies. A focused Perception Study will gauge shareholder
sentiment and start a dialogue with them on performance, expectations and governance. Philip Kranz
The mere act of asking their opinion sends a proactive message that you care, something Vice President
312.780.7240
you can remind them of at proxy time.
pkranz@dresnerco.
Explicitly ask shareholders to consider your company’s pay philosophy and strategy as well com
as board composition, issues that often draw the attention of shareholder activists:
• Have you sufficiently explained the pay metrics you’ve chosen and the behaviors they are aiming www.dresnerco.biz
to reward?
• Do your company’s executive compensation packages encourage risk taking?
• Do investors believe your company’s compensation analysis peer group is appropriate?
Dresner Corporate
• Are investors concerned about the quality of your company’s board members?
Services is
a strategic
An ounce of prevention is worth a pound of cure.
communications
A focused Perception Study will reveal current shareholder sentiment about your firm specializing
company’s corporate governance policies and compensation programs, as well as what in investor and
type of behavior shareholders believe your company’s current compensation plan is public relations.
encouraging. You will also be able to identify the expectations of shareholders and We focus on
understand what they do and do not like about your company’s existing pay philosophy, delivering tangible,
programs and disclosure, as well as other corporate governance policies. measurable results
leading to a
This critical information should then be presented to your company’s board of directors superior return on
to facilitate proper disclosures in the proxy and information statements. Your company’s investment for our
proxy statement should convince investors that your company’s compensation philosophy, clients.
board composition and corporate governance practices support its business model and are
aligned with a commitment to increasing shareholder value. Use these documents to help
investors understand your company’s long-term performance, goals and thinking.
What Can Dresner Do?

In this era of ‘Say-On-Pay’ and heightened investor activism, it is important for public
companies to have a proactive strategy for addressing concerns about executive
compensation, board composition and corporate governance practices. A focused
Perception Study conducted by Dresner is an important first step to uncovering
perceived disclosure shortcomings, as well as providing insight to investor expectations
surrounding best practices in governance, compensation and transparency.

Additionally, a Dresner-conducted Perception Study regarding these timely issues will:

• Demonstrate that your company is committed to ensuring its compensation program
practices and disclosure policies are progressive and shareholder friendly
• Establish that your company’s senior management team and board members are
proactively engaging and listening to their shareholders
• Set your company apart from its peers and simultaneously gain and sustain analyst
interest
• Intercept investor criticism and lessen the likelihood of surprises at proxy time
• Positively impact shareholder retention

Knowing the issues that are important to investors is the first step in any successful
investor relations program. But Dresner takes the Perception Study to the next
level, evaluating recent buying and selling trends, cost basis and broader portfolio
characteristics to provide your company’s management team and board of directors with
an in-depth analysis of the issues that are forming investors’ opinions and driving your
company’s valuation. The detailed findings of the Perception Study provide conclusions
that Dresner uses to form a blueprint for your company’s upcoming proxy statement,
as well as your company’s investor relations program going forward, including
recommendations for communications development, marketing plans and strategic
decision making.

Remember, transparency builds trust and is the foundation of excellent investor

relations.

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