Shareholder activism has been a significant phenomenon amongst the largest U.S. public companies, with activists of a variety of stripes waging campaigns on a wide range of issues. As such activism has continued to grow, it has spread to Silicon Valley companies. In addition, state corporate law, the requirements of the rules and regulations of the U.S. Securities and Exchange Commission or stock exchanges, corporate governance practices and tax laws also lead companies to place a variety of proposals before stockholders for approval.

As a companion supplement to Fenwick's "Corporate Governance Practices and Trends: A Comparison of Large Public Companies and Silicon Valley Companies"1 survey, this report summarizes significant developments relating to stockholder voting at annual meetings in the 2020 proxy season among the technology and life sciences companies included in the Fenwick – Bloomberg Law Silicon Valley 150 List2 (SV 150). Our report also includes stockholder voting developments at the large public companies included in the Standard & Poor's 100 Index (S&P 100), as trends typical in the S&P 100 have often migrated to Silicon Valley. We highlight statistics underscoring developments in director elections, "say-on-pay," and a variety of other compensation, governance and policy matters.

Annual Meeting Proposals and Voting

In the 2020 proxy season,3 146 of the SV 150 companies and 98 of the S&P 100 companies held annual meetings.4 Generally, such annual meetings will, at a minimum, include voting with respect to election of directors and ratification of the selection of the auditors of the company's financial statements. Fairly frequently, it will also include an advisory vote with respect to named executive officer compensation ("say-on-pay").

Increasingly, annual meetings will also include voting on one or more of a variety of proposals that may have been put forth by the company's board of directors or by a stockholder that has met the requirements of the company's bylaws and applicable federal securities regulations. In addition to being broken down by proponent, the proposals can generally be categorized by major subject area: compensation, governance, policy issues and other general business. Within each of these major subject areas, there are topics that occur with some frequency either historically or as a new trend.5 In addition to providing results for the matters commonly voted on at annual meetings (director elections, auditor approval and "say-on-pay"), this report provides breakdowns and results of voting in these other major subject categories and topics within them.

About the Data: Group Makeup of the Fenwick – Bloomberg Law Silicon Valley 150 List

In 2020, there were approximately 245 public technology and life sciences companies in "Silicon Valley,"6 of which the Fenwick – Bloomberg Law SV 150 List captures those that are the largest by one measure — revenue.7 The 2020 constituent companies of the SV 150 range from Apple and Alphabet, with revenue of approximately $268B and $162B, respectively, to Ooma and Model N, with revenue of approximately $152M and $145M, respectively, in each case for the four quarters ended on or about December 31, 2019. Apple went public in 1980, Alphabet (as Google) in 2004, Ooma in 2003, and Model N In 1999, with the top 15 companies averaging 19 more years as a public company than the bottom 15 companies in the SV 150. Apple and Alphabet's peers clearly include companies in the S&P 100, of which they are also constituent members (11 companies were constituents of both indices for the survey in the 2020 proxy season8 ), where market capitalization averages approximately $374B.9 Ooma and Model N's peers are smaller technology and life sciences companies that have market capitalizations well under $1B, many of which went public relatively recently. In terms of number of employees, the SV 150 averages approximately 12,300 employees, ranging from SYNNEX, with 235,000 employees spread around the world in dozens of countries, to companies such as Aemetis, with 160 employees in the U.S. and India, as of the end of their respective fiscal years 2019 (Innoviva, ranked 131 in the SV 150, has the fewest full-time employees — six).

About the Data: Group Makeup of the Standard & Poor's 100 Index

The companies included in the S&P 100 are a cross-section of the very largest public companies in the U.S. Just as the SV 150 companies are not necessarily representative of Silicon Valley generally, so the S&P 100 companies are not necessarily representative of companies in the U.S.

generally.10 Far larger than a typical public company in the U.S. and far larger than U.S. corporations generally, the S&P 100 companies average approximately 144,000 employees and include Walmart with 2.2 million employees in more than two dozen countries at its most recent fiscal year end.

It is also important to understand the differences between the technology and life sciences companies included in the SV 150 and the large public companies included in the S&P 100. Compared to the S&P 100 (or the broader S&P 500), SV 150 companies are on average much smaller and younger, have much lower revenue and are concentrated in the technology and life sciences industries. About 20% of SV 150 companies have 10,000 employees or more, compared to 94% of S&P 100 companies (with 98% of the S&P 100 having 5,000 or more employees, compared to 33% of the SV 150). SV 150 companies also tend to have significantly greater ownership by the board and management than S&P 100 companies (whether measured by equity ownership or voting power).

The 2020 constituent companies of the S&P 100 range from the aforementioned Walmart, with revenue of approximately $521.1B, market capitalization of approximately $338.8B and approximately 2.2 million employees, to Simon Property Group with revenue of approximately $5.6B, market capitalization of approximately $45.3B and 4,500 employees. The average market capitalization of the S&P 100 was approximately $190B, ranging from Allstate at approximately $36.2B to Apple at approximately $1.3T, with a median of $125B. The median revenue of the S&P 100 for the four quarters ended on or about December 31, 2019, was approximately $39.6B. The industries included in the S&P 100 range from financial services to apparel, food products, air transport and more.

Footnotes

1 The 2020 edition of Corporate Governance Practices and Trends: A Comparison of Large Public Companies and Silicon Valley Companies, covering data through the 2020 proxy season, will be published in the fourth quarter. The 2019 edition is available at https://fenwick.com/CorporateGovernance.

2 The Fenwick – Bloomberg Law SV 150 List was created by Fenwick & West in partnership with Bloomberg Law to rank Silicon Valley's largest public companies by revenue. See the Methodology section starting on page 37.

3 See "Methodology—Proxy Season / Proxy Statements" below for a discussion of the definition of the proxy season for purposes of this report.

4 See footnote 60 and associated text for a discussion of the companies that did not hold annual meetings.

5 See the "Methodology—Taxonomy of Proposals" section for a discussion of the topics included in each subject area category.

6 The number fluctuates constantly as some companies complete initial public offerings and others are acquired. As of October 5, 2020, D&B Hoovers included 309 public companies headquartered in Silicon Valley (which was historically defined by The Mercury News [fka the San Jose Mercury News] as Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara counties, when they published the SV 150 List). Of the 309 public companies in Silicon Valley, we consider approximately 245 of them technology or life sciences companies based on their "D&B Hoovers Industry" descriptions as well as their initial sources of funding. The number of Silicon Valley public technology and life sciences companies is down from a high of 417 reached in 2000 during the dot-com era, although it has risen slowly in recent years. See "What the 'Tech Exodus' Could Mean for Silicon Valley," (Bloomberg, August 18, 2020), " From the Editor's Desk: Is Silicon Valley Still the Epicenter of the Startup Universe" (Crunchbase News, August 21, 2020) and " In Boom and Bust San Francisco, Pandemic Brings Grim New Reality," (Bloomberg, May 28, 2020).

7 Based on review of the "D&B Hoovers Industry" descriptions, there are approximately 65 public companies that are outside of the technology or life sciences industries but are located in the Silicon Valley region (defined as Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara counties) (see footnote 6). See also the "Methodology—Group Makeup" section below for a more detailed discussion of the makeup of the SV 150 and the geography of Silicon Valley for its purposes, including footnote 52.

8 The 11 companies that were members of both the SV 150 and the S&P 100 in the 2020 proxy season (with their SV 150 rank) are: Apple (1), Alphabet (2), Intel (3), Facebook (4), Cisco (6), Oracle (7), Gilead Sciences (12), Netflix (13), PayPal Holdings (14), Adobe (19) and NVIDIA (20).

9 The average market capitalization of the SV 150 at the time of announcement of the current index list (see footnote 52) was approximately $38.9B, ranging from Aemetis at approximately $19M to Apple at approximately $1.3T, with a median of $5.4B. The median revenue of the SV 150 for the four quarters ended on or about December 31, 2019, was approximately $986M. It is also worth noting that for the 2020 proxy season year, 39 of the SV 150 companies were also constituents of the most recent S&P 500.

10 Standard & Poor's defines the S&P 100 Index as "a sub-set of the S&P 500," which measures the performance of large cap companies in the U.S. The index comprises 100 major, blue chip companies across multiple industry groups. Individual stock options are listed for each index constituent. To be included, the companies should be among the larger and more stable companies in the S&P 500, and must have listed options. Sector balance is considered in the selection of companies for the S&P 100. This index is widely used for derivatives, and is the index underlying the OEX options. Standard & Poor's full methodology is available on its website.

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