Long-Term Goals Are Most Commonly Cited Risk Mitigator

April, the cruelest month of proxy season, is approaching its end, and in the wake of the numerous filings this month, interesting information is beginning to emerge, such as Equilar’s new report on risk disclosure. The SEC introduced new guidelines for discussion of risk this year, and there was a lot of buzz about how companies would (or wouldn’t) handle the new regulations. The good news is that there seems to be a lot of consensus: of the 100 large ($14.5+ billion in revenues) public companies Equilar surveyed, 72% noted long-term performance goals as a risk-management policy, while 59% cited ownership guidelines and 50% touted clawbacks. Don’t feel badly for those poor NEOs, though: 56% also cited balancing short-term performance goals with long-term ones as important. Not such an important risk-management tool: reducing or eliminating perquisites, which only one of the 100 companies cited.

The landscape isn’t free from disagreement, however. Pension plans were a notable opinion-divider, with some companies touting their employee-retention powers, while others emphasized cutting them to avoid short-term goal focus. It’ll be interesting to see how things normalize (or don’t) next year, when everyone has their peers’ disclosures as a baseline.