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Say-on-pay vs golden parachute vote

By Flock Research · Filings research desk

On say-on-pay vs golden parachute vote, both come from the same SEC rule and both are advisory, but they answer different questions at different moments. Say-on-pay is the recurring vote on how the named executive officers are paid. The golden parachute vote is a deal-specific vote on what those executives receive because control is changing hands. This guide compares say-on-pay vs golden parachute vote across trigger, timing, and the disclosure each one points at. It is not investment advice.

Definition

Say-on-pay versus the golden parachute vote

are two advisory shareholder votes under SEC Rule 14a-21. Say-on-pay, under 14a-21(a), is the recurring vote on named-executive compensation. The golden parachute vote, under 14a-21(c), is a one-off vote on change-of-control compensation at a meeting approving a merger or asset sale. Source: SEC.

What triggers each vote?

Say-on-pay is triggered by the ordinary calendar. It attaches to a proxy solicitation for a meeting at which directors will be elected and for which Item 402 executive compensation disclosure is required. It recurs: no later than the meeting held in the third calendar year after the previous say-on-pay vote, though most companies run it annually.

The golden parachute vote is triggered by a transaction. Rule 14a-21(c) applies where shareholders are asked to approve an acquisition, merger, consolidation, or a proposed sale or other disposition of all or substantially all the assets. It is not a recurring item, and a company that never does such a deal never holds one.

How do they compare?

What to checkSay-on-payGolden parachute vote
Rule17 CFR 240.14a-21(a)17 CFR 240.14a-21(c)
TriggerMeeting electing directors with Item 402 disclosureMeeting approving a merger or sale of substantially all assets
FrequencyRecurring, at least every third calendar yearOne-off, per transaction
Disclosure it points atItem 402 of Regulation S-KItem 402(t) of Regulation S-K
Where it appearsAnnual meeting proxy, DEF 14ATransaction or merger proxy
Binding?No, advisoryNo, advisory
Can be skippedNo, once dueYes, if already covered by a 14a-21(a) vote

Both advisory

Neither the say-on-pay vote nor the golden parachute vote binds the company or its board under Section 14A of the Exchange Act

Source: SEC

The disclosure behind each vote

This is the practical difference for anyone reading filings. Say-on-pay points at the full Item 402 package: the Compensation Discussion and Analysis, the summary compensation table, and the narrative, covering pay across recent years. The golden parachute vote points at Item 402(t), a much narrower table quantifying, per named executive officer, the cash, accelerated equity, pension and deferred compensation enhancements, perquisites, tax reimbursements, and total payable because of the deal.

One is a running record of how a company pays its executives. The other is a single quantified estimate of what the transaction is worth to them personally.

Reading both in sequence

For an ongoing holding, say-on-pay approval percentages, filed after each annual meeting on a Form 8-K, are the recurring series worth watching, and the document is read as described in how to read a proxy statement. When a deal appears, the Item 402(t) table in the transaction proxy is the new disclosure, alongside the Form S-4 where shares are the consideration. How institutions voted on either resolution shows up later in their Form N-PX proxy-voting records.

Neither vote is the more important one in the abstract: they are keyed to different disclosures and different moments. Flock reads these public filings and keeps each one dated and linked to its source, so you can move from a summary to the underlying record in one step. What any of it means for your money is your call to make.

Frequently asked questions

What is the difference between say-on-pay and the golden parachute vote?

Say-on-pay under Rule 14a-21(a) is the recurring vote on named-executive compensation at a meeting where directors are elected. The golden parachute vote under Rule 14a-21(c) is a one-off vote on change-of-control compensation at a meeting where shareholders approve a merger or asset sale. Source: 17 CFR 240.14a-21.

Are both votes binding on the board?

Neither is binding. Both are advisory votes under Section 14A of the Exchange Act, so a negative result does not overrule the board, cancel compensation arrangements, or block a transaction. The disclosed result is the outcome that matters. Source: SEC.

Which proxy statement carries each vote?

Say-on-pay appears in the annual meeting proxy statement, filed as a DEF 14A, keyed to the Item 402 compensation disclosure. The golden parachute vote appears in the transaction or merger proxy, keyed to the Item 402(t) table. Both are public on SEC EDGAR. Source: SEC EDGAR.

Can a company skip the golden parachute vote?

Yes, in one case. Rule 14a-21(c) does not require the separate vote if the same agreements and understandings were already subject to a say-on-pay vote under Rule 14a-21(a). Emerging growth companies are outside both requirements. Source: 17 CFR 240.14a-21(c).

Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.

Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.

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