KBR’s proxy statement immediately grabs the reader’s attention with a bold cover, showing an astronaut walking across a seemingly alien landscape while two F-16 fighter jets fly above. A satellite orbits overhead, and an energy plant sits in the background. It’s a vision that Adam Kramer, assistant corporate secretary and director of legal at KBR, labored over extensively. ‘We probably [went] through 20 different drafts of the cover,’ he tells Corporate Secretary. ‘My graphic design person really [wanted] to kill me by the time [it was] done.’
Kramer says he knew going into 2017 that the proxy statement was of particular importance. In 2015, KBR’s new CEO, Stuart Bradie, unveiled an updated company strategy, moving it into the government services space so that it was less reliant on the volatile energy sector. But the company had lower-than-expected earnings in 2016, and was announcing rising executive compensation and falling earnings per share. ‘We knew that getting a ‘yes’ vote on our executive compensation would be the biggest issue this year,’ Kramer says.
Investors wanted a redesigned proxy statement that was easier to read and better communicated the link between the company’s strategy and executive compensation plan. ‘I’ve found from talking to investors that they’re not going to spend a lot of time on these proxies,’ Kramer says. ‘They only read the proxy and compensation discussion & analysis (CD&A) summaries.’
The 2017 proxy summary provides a bullet-pointed list of KBR’s highlights from 2016, and grounds them in a long-term strategic plan that looks past the below-expected financial results. The summary is interspersed with striking images that help tell the story of two recent acquisitions: pictures of a fighter jet and a satellite highlight the company’s greater focus on government services. Similarly, the CD&A was enhanced with bullet point lists, graphs and charts to bring the statistics to life. The hard work paid off when the company received 91 percent say-on-pay approval.
In addition to investor feedback, Kramer also looked to other proxy statements for inspiration. Although KBR doesn’t have the budget of a large-cap company for its proxy, Kramer identified best practices that he and his team could replicate. He added an introductory page to the section on the board, for example, to highlight changes over the last three years. These included the election of five new directors, the appointment of an independent board chair and rotation of half of the committee memberships.
‘I spent a lot of time trying to show how our board composition has changed,’ Kramer says. ‘We had to do it from scratch, but it was worth it because it’s something our investors were happy to see.’
This article originally appeared in the Winter issue of Corporate Secretary.
Ben Ashwell
Ben Ashwell is the editor at IR Magazine and Corporate Secretary, covering investor relations, governance, risk and compliance. Prior to this, he was the founder and editor of Executive Talent, the global quarterly magazine from the Association of...
