Best proxy statement
GE
The judges noted that this category was among the most hotly contested, with the best horse proving hard to discern. At the ribbon, however, there was a clear winner. ‘GE’s outstanding compensation disclosure dominates this proxy statement,’ the judges declared. It comes as little surprise, therefore, that the other category where GE took home a gold in 2009 was most effective compensation disclosure.
Taking a page from its corporate communication style, which makes excellent use of logic and plain English, the GE team under corporate and securities counsel Chris Pereira stood back and asked how it could streamline the proxy. ‘What is it users look for?’ was the starting question. The team reckoned the answer was how much was paid out and why, information that in many companies’ proxies comes listed at the end, following pages and pages of other information most readers don’t care about.
‘We reordered things this year,’ Pereira says. ‘Everybody in the company knows what the top five issues were in 2008 for the board compensation committee to wrestle with. To put them in a summary on half a page greatly increased the readability.’
Another high priority was brevity, Pereira adds. ‘People don’t want to read all the stuff that traditionally appears in a proxy, so we saw this as an opportunity to squeeze the air out,’ he explains.
For example, the compensation discussion and analysis was kept to 10 pages. The same approach was taken with the entire proxy document. Overall document use and design were important, but both content and context took primary positions in the team’s considerations. ‘We asked ourselves, Are we firmly anchored in the current economic and political environment?’ Pereira says. ‘We have to talk about those issues and how we touch on them.’
This sort of thing doesn’t just pop out of a container in February – it takes a long time to plan and put together. The project, which addresses both the annual report and the proxy, starts in September as teams of people assemble to discuss the approach and a timeline. Senior management and key staffers from treasury, internal audit and legal, among others, blend the project into their daily lives. ‘You have to communicate early and comprehensively to be sure you are headed in the right direction,’ says Pereira.
The panel of judges saw that, too. ‘Investors, analysts, the media and the public will all find what they need in this comprehensive and well-written document,’ they concluded.
