Best proxy statement: Prudential

Making something that’s difficult to understand more accessible for others is a very difficult job – and making a proxy statement easy to read ranks among the toughest examples of this. The additional regulatory disclosures that have become required in the last few years have complicated matters further, placing added pressure on companies to address the challenge of including even more information without turning an already complex document into a totally perplexing one.

Prudential Financial has long been considered among the leaders in preparing proxy statements, but this year the company took its expertise to another level. Starting with a commitment to using plain language throughout the document to ensure clarity, Prudential used a number of design features to organize the information into a surprisingly inviting read. Excellent use of charts, graphics and soft colors made the document less intimidating, and bold labeling of key information made it easier to navigate than most proxy statements. An up-front snapshot summary, detailed profiles of director qualifications and an extensive listing of governance policies – including sustainability factors – were also among the innovations that led to Prudential winning Corporate Secretary’s award for best proxy statement this year.

Prudential Financial chief governance officer, vice president and corporate secretary Peggy Foran says the proxy statement is part of the company’s overall commitment to shareholder communications. Prudential’s aim is to produce a document that meets regulatory requirements while communicating with investors in a way that facilitates their voting decisions. ‘We all worked together to find the best way to get the message out and to create a document that tells our story and can be easily read,’ Foran says.

In fact, the company’s commitment to shareholder communication extends beyond its own shareholders. Prudential willingly shares its proxy expertise and innovations with other issuers prior to proxy season – a policy that helps improve governance standards throughout the industry.

Prudential has also proven to be an early adopter of best practices regarding company disclosures. For example, part of the company’s compensation discussion and analysis spells out the board’s compensation philosophy and how elements of Prudential’s compensation policy are designed to align executive compensation with long-term shareholder interests – something proxy advisory firms ISS and Glass Lewis will emphasize in the coming 2012 proxy season.

Prudential even goes so far as to include painstaking detail concerning each named executive officer’s compensation, including bullets explaining factors that the compensation committee has considered in determining the effectiveness and impact of the executive’s contribution to the company.