Top U.S. public companies continue to change governance practices in favor of more shareholder involvement, fewer structural takeover defenses and greater director independence, according to Sherman & Sterlings annual analysis of the 100 largest U.S. public companies proxy statements.
The survey found that 56 of the companies require directors to be elected by a majority of votes, and 43 of those companies require that incumbent directors resign when not re-elected, rather than staying on under holdover provisions. The number of top public companies with poison pill takeover defense strategies was 17, down from 33 in 2004. The number of companies with classified boards dropped to 33 from 54 in 2004.
Company boards on which at least 75% directors are independent numbered 87 in this years survey, up from 81 in 2004; at 40 of the companies this year, the CEO was the only non-independent board member.
The number of companies splitting the role of CEO and chairman was 22 this year, down from 24 last year but higher than the 14 reported in 2004.
Many companies failed to provide analysis of their compensation policies and provided inadequate disclosure of performance targets under incentive programs, according to the survey. The top 100 public companies are determined by the Fortune 500 list.