Best proxy statement (small cap)
Carshae Dahl, Atlas Air
Atlas Air Worldwide Holdings’ 2021 proxy statement is notable for, among other things, its thoughtful approach to discussing the company’s shareholder engagement, the feedback it generated and what was done in response. As one of our judges commented: you can tell the proxy statement matters to the firm.
It was released in the context of a negative say-on-pay vote at Atlas Air’s 2020 AGM, which was a marked decline from the 2019 and 2018 meetings at which 92.1 percent and 94.3 percent, respectively, of the votes cast were in favor of the say-on-pay proposal. The negative result led to an extensive shareholder engagement initiative.
During that outreach, topics discussed with investors included the 2020 say-on-pay results, the anticipated positive impact on pay-for-performance resulting from a significantly reduced CEO pay package and strong share price performance, the impact of Atlas Air’s 2020 leadership transition and related succession planning, its response to the Covid-19 pandemic and board and committee composition and refreshment. The feedback from shareholders during the engagement meetings was discussed by the firm's compensation committee and taken into account as it implemented and administered the 2020 compensation program and governance practices and developed the 2021 compensation and incentive programs.
The proxy statement was then developed by executive compensation and corporate governance experts in the company’s legal department working closely with the finance, accounting, investor relations and senior management teams as well as with the compensation committee and the full board.
I believe you don’t get credit for the things you do if no one knows about them
‘In particular, following the say-on-pay voting results at the 2020 annual meeting, it was very important that we fully described the company’s robust in-season and off-season shareholder outreach efforts, provided details regarding the feedback received from shareholders during outreach, and indicated the steps that were taken in response to such feedback in an effort to allay any shareholder concerns about our executive compensation programs and practices,’ the company says in its awards submission.
‘That section was very important to us. We’re very proud of our engagement program,’ says Carshae Dahl, senior executive compensation and benefits counsel with Atlas Air. ‘I believe you don’t get credit for the things you do if no one knows about them.’
Among other things, the proxy statement included new reader-friendly snapshots of the Atlas Air compensation programs as well as graphical explanations and narrative disclosure on how those programs are designed to help implement the company’s business strategies and provide competitive opportunities principally based on achieving performance goals.
The engagement and disclosure in the proxy clearly worked, with Atlas Air’s 2021 say-on-pay proposal receiving the highest level of support in the company’s history.
ESG oversight clarity The 2020 proxy statement also focused on Atlas Air’s ESG strategy and initiatives, with an emphasis on enhancing environmental and sustainability disclosures following the release of the company’s ESG report and hiring of a new individual to lead its CSR, sustainability and broader stakeholder efforts and strengthen its actions relating to ESG commitments.
As part of this, the proxy statement features graphics on board oversight of ESG rather than just explaining general corporate ESG initiatives.
Dahl explains that while ESG is top of mind for many companies, the governance element is important. Atlas Air has formalized the board’s role in overseeing environmental and social issues, and the company wanted to make sure this structure was clear in the proxy statement, she says.
Dahl adds that the graphics were felt to be a good way of achieving this: ‘They were meant to be the visual equivalent of a soundbite. The board commented on the clarity and transparency and was very supportive.’
