Highlights from the 
world of Proxy Papers you can’t afford to miss: WPP, Netflix, Daewoo Shipbuilding, and Caterpillar.
WPP plc
LSE – June 8
When concerns about the sheer scale of UK executive pay appear, the mention of Sir Martin Sorrell’s name is never far behind. WPP’s CEO has long been chastised as the epitome of remuneration that has risen to unacceptable levels, and the 2016 AGM is unlikely to quell those protestations; due to the final vested award under a legacy incentive plan, as well as rather generous regular incentive schemes, Sir Martin’s realised pay for the 2015 fiscal year topped £70 million. While the figures are certainly exceptional, the Company’s performance has also been exceptional under his leadership. It remains to be seen whether WPP’s investors will accept the CEO’s assertion that he is worth every penny, or if he will receive a similar rebuke to Oliver Twist when he dared ask “Please, sir, I want some more”….
Netflix, Inc.
Nasdaq – June 9
Netflix’s evolution from mail-order DVD rental service to producer of acclaimed original content has been closely observed by investors and consumers alike, and the company has returned substantial value to shareholders over the past five years. But this progression contrasts sharply with the company’s stagnant corporate governance; few companies in the S&P500 have been less responsive to shareholders. In each of the past five years, non-binding shareholder proposals seeking an array of corporate governance reforms were approved by a substantial majority of votes cast and were subsequently denied by the board. Shareholder concerns continue to intensify, evidenced by less than majority support for director nominees and public “Withhold votes” campaigns. This year, shareholders will again consider whether the board is adequately protecting their interests when they vote on three director nominees and non-binding shareholder proposals seeking proxy access and a declassified board, among other reforms.
Daewoo Shipbuilding & Marine Engineering Co., Ltd.
Korea Exchange – June 13
Daewoo Shipbuilding & Marine Engineering Co. Ltd. has hit a proverbial iceberg in the water after reporting operating losses of KRW 5.5 trillion for 2015, with nearly half of the losses attributable to the restating of its financial statements for fiscal years 2013 and 2014 after the uncovering of “miscalculations” of its losses for those years. Although the restating of the financial statements may not completely sink the Company, it is being forced to bail out rising waters by undertaking a series of “self-rescue plans” under the direction of its major creditor, Korean Development Bank (“KDB”). The rescue plan includes: large-scale worker layoffs, wage reductions, selling of non-core assets, and possibly spinning-off of its defense subsidiary. While KDB appointed JUNG Sung Leep as captain to navigate the Company through its troubled waters, shareholders must now decide whether to head for the lifeboats. At the forthcoming EGM, they will be asked to vote on the appointment of: a new executive director, JO Wook Sung, who has experience in working with Mr. JUNG to right the sinking company, STX Offshore & Shipbuilding Co., Ltd. which is now under court receivership; and two independent directors whose experience includes being a former liquidator of Daewoo Motors and an administrator of another company that went into court receivership.
Caterpillar Inc.
NYSE – June 8
Following tepid support (65%) for its executive compensation program at last year’s meeting, Caterpillar has substantially revised its long-term incentive scheme by shifting away from cash awards. While executives will now be eligible to receive performance-based equity awards, the performance metrics for awards have been narrowed and performance periods have been shortened substantially, leaving some shareholders to question whether the long-term interests of executives will be sufficiently aligned with their own. Ultimately, shareholders will decide at this year’s meeting if the changes go far enough in addressing their concerns.