August 2012
The Allstate Corporation's 2011 annual meeting vote was in. The good news: All the directors were re-elected. The not-so-good news: the margin of approval was low – as low as the 50th percentile for some directors. In addition, a majority of votes were cast in favor of several advisory proposals but against Allstate's recommendations. Management and the board believed that the unfavorable votes were influenced by company performance concerns and negative voting recommendations from ISS, based on the board's decision not to adopt several shareholder advisory proposals that had received favorable votes in previous years.
During 2011 and 2012, Allstate made a number of governance and communication changes to change investor perceptions and achieve a more favorable proxy vote in future years. Allstate's chairman and CEO, as well as company officials from Investor Relations, Law and/or Human Resources, discussed corporate governance during in-person meetings with proxy advisory firms and investors representing about 30 percent of outstanding shares. Meetings and calls with institutional investors' proxy voting staffs solicited feedback on best practices in general and company practices in particular. Allstate also provided greater insight on its business strategy, unveiled more specific long- term performance goals, and hosted its first Investor Day in more than a decade.
Governance changes included appointment of a lead director and compensation program changes to further align executive compensation with Allstate's performance, shareholder expectations and market practices. These changes were communicated more effectively in a redesigned 2012 proxy statement, including a first-time letter to shareholders from the board and a page summarizing governance enhancements over the years to respond to evolving best practices. Responding to favorable shareholder advisory proposal votes in previous years, the board recommended adoption of the shareholder right to act by written consent between annual meetings.
The result: positive investor feedback, favorable ISS voting recommendations, and an average vote of 95.68 percent in favor of reelecting Allstate's directors at the 2012 annual meeting.