For example, they automatically vote against a company if they allow things such as option exchanges that are not approved by shareholders, very large severance agreements, or tax gross ups
on certain benefits or payments.
The Company introduced a new executive change of control severance program to address stockholder and advisory group concerns regarding excise tax gross ups
5 million in salary, stock awards, tax gross ups
, social club memberships and other perks.
Golden parachutes, especially 280 gross ups
and single triggers, should be eliminated as much as possible.
Specific areas requiring close attention in the due diligence process were the asset/liability measurement tests, income acceleration, hedge identification, tax indemnities and gross ups
, acceleration clauses, and rating triggers.